Gas prices' effect on the housing market

Gas prices and housing sprawl
High gas prices are squeezing the housing market on the fringes of metro regions.

It can be scary to turn on CNBC or CNNMoney these days. Watch for just a minute or two, and you’re likely to hear that not only is the housing market in trouble, but we might not be able to see the bottom yet. If you manage to keep watching, you’re likely to hear about the latest price of a barrel of oil, headed upwards towards all-time highs around $120. These two financial markets, fuel and home prices, might seem unconnected to many, but if you look deeper, you can see some encouraging — or discouraging — connections, depending on where you live.

National Public Radio had a story this week chronicling the trends in metro Washington, D.C., home to some of the most booming exurban counties of the last 20 years. Regionally, prices are down 11 percent, even 20 percent or more in areas farther from the core of the region. But not everyone is hurting. Look closer at neighborhoods inside the Beltway, close to job centers, with good access to transit, or with the option of walking and biking nearby, and you’ll see a different trend:

It’s a different story for properties that are closer to the city’s center — in areas of Montgomery County that are on the edge of Washington. “When I have a listing in this neighborhood, there are often 40 to 60 people coming through the open houses,” said Pam Ryan-Brye, an agent with Long and Foster Real Estate. Inside the city, median home prices are actually up 3.5 percent from a year ago.

SGA’s David Goldberg was quoted on the similar trend in Atlanta:

“Atlanta was recognized as the fastest-spreading human settlement, probably in the history of the world,” Goldberg said. But while the suburbs spread, the city was losing population. Now the tables have turned. In the past two years, new construction in what had been forests and farmland has slowed by more than 70 percent, but construction in town has held steady.

Just today, a story in the Washington Post examined housing prices in the region and found that while overall sales are less frequent, prices are holding much steadier in the District compared to the outlying suburbs.

In the midst of skyrocketing gas prices, the best solution we have is to break down the barriers to allowing the market to meet the demand for more housing in compact, walkable, accessible neighborhoods — demand that is only likely to rise as the congestion and fuel costs of driving long distances become more prohibitive.