Gas Prices Alter Housing Values

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Perhaps the biggest challenge facing the Obama administration is implementing a new energy program. As gas prices rocketed skyward 6 months ago, calls for energy reform were rampant. As the economy slides further into a recession, focus has shifted towards the financial markets, manufacturing, and stabilizing housing prices.

Economist have long argued that even with hybrid vehicles, hydrogen batteries, and renewable energy resources, Americans will have to alter their driving habits and live closer to work. Many have called for stiff gasoline taxes, in order to keep the public’s focus on the impending energy crises and influence population migration.

UNDERSTAND THE ECONOMIC FORCES AT PLAY

There is a very real possibility that the decades of expansion and urban sprawl will shift back towards centers of production and commerce. Because of extremely slow changes in the supply side of Real Estate, home values and market rents in certain suburban areas may experience a prolonged decline while metropolitan areas will experience a resurgence.

Make sure you understand what the economic drivers of your market area are and investigate changes in demographics and population movement. Though it is extraordinarily difficult to project long term growth in any market, it is foolish to ignore the myriad of economic indicators and assume away changes in consumer behavior when making investment decisions.

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About Author

Anwell Tsai, a Realtor for Real Estate One, grew up in the Real Estate business. Anwell is extremely interested in analyzing property from a variety of viewpoints, utilizing different financial models. He explores various issues in Real Estate on his blog at ValuationHome.com. When he is not out looking at homes, Anwell, a conservatory trained violinist, loves expressing his creative side through the joys of music.

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