Impact of Gas Prices on the Chicagoland Real Estate Market

Who would have ever thought $4 per gallon of gas would be a thing of the past. We have been over $4 a gallon for regular gas long enough that most people have come to accept that it is more likely to become $5 per gallon before we see $4 again in Chicago. Even using 20 MPG that means it costs you $.20 per mile you drive just for gas costs. Worse we all know that 20MPG is more than most cars average while trying to fight rush hour and construction’s stop and go traffic.

Impact of High Gas Prices

The impact of the rising cost of gas has not only been felt at the pump but also in every aspect of our lives. The cost of simple items like milk and eggs have gone up. Our day to day expenses have all increased and are causing people to rethink the way we live.

A natural thought is to try and find a car that is more fuel efficient, but that really is just a band-aid to the larger problem many people find themselves in. The average Chicagoland resident spends 4.65 hours per week* and an average of 186 miles** in the car driving to and from work. Many Chicagoland residents are finding that transportation costs are fast becoming a reason to rethink where they live.

Urban Sprawl Communities Hardest Hit

A noticeable tend of buyers wanting to live close to work or public transportation has become clear. Areas close to train stations and/or jobs are selling much better than commuter communities. Much of the growth in the Chicagoland area over the past 10 years has been in areas that would be considered commuter cities; as people that live there must drive some distance to get to and from work. Proximity to work and transportation were never the primary factor people bought in these areas, it was all about new inexpensive housing. The allure of granite countertops, stainless steel appliances, and a brand new home brought buyers in droves to these commuter communities.

Urban sprawl in Chicago has come to a screeching halt and there are little signs of it starting back up any time soon. These commuter cities have been the hardest hit during the real estate market slowdown and look to be the last to rebound as the market is attempting to recover. With $4 plus gas people are less interested in homes that will require a 70 mile round trip to work each day.

Old Real Estate Adage Proves True Yet Again

Homes close to public transportation and close to jobs, those with great locations are selling even in todays “buyers market“. The homes that require getting into your car for everything that cause homeowners to spend well over $250 a month on gas are still not moving well. They might be new and shiny, but the old adage of there are 3 important factors to buying real estate are proving more true today than at any time in the last 10 years…Location, Location, Location!

Sources:
Hours per week driving: Census.gov
Miles per week: Hours x 40mph (no hard numbers found)

Related Stories from around the country:
High gas prices and online marketing…a correlation?
Gas Prices and the Housing Market (Austin Texas Blog)
JR would have sure been proud! (Columbus GA Blog)
Gas Prices and Downtown Condo Living (Austin Texas Blog)
How rising gas prices is effecting the real estate industry (Las Vegas Blog)