Location now has more weight in home selection
I have my first anecdotal evidence that gas prices will hurt values in far flung areas and help real estate values in closer areas of Austin. I just helped someone relocate from Wimberley to Austin. The reason for the move? Gas prices have made the commute costs unacceptable. For this individual, the tipping point was reached and the decision was easy.
Wimberley is about 40 miles SW of Austin and is a beautiful, serene place to live. My client had lived there for 7 years, on the Blanco River, in a beautiful setting, but decided to move back into Austin because of gas prices. “I’ll save $350 a month on gas” is what I was told. The tipping point.
Another example; last weekend, I drove my 12 year old daughter out to Elgin to be a “mother’s helper” for the day, keeping her 4 year old cousin occupied and entertained while his parents could actually get a few things done and have grown up conversations. I chatted with my sister in law for a while before I left. I asked “so, do you guys still enjoy being out here in Elgin”?
Her facial expression answered the question. She said (with wrinkled, contorted face), “well, … it’s (the drive) starting to wear us down”.
10 years ago, their (my brother and sister-in-laws) commute into Austin was 35 minutes to their respective jobs in west and north Austin, about 25 or 30 miles each. Now she leaves at 6:15AM just to beat the traffic and avoid the stress of predicting the travel time, and not wanting to be late for work. Otherwise, they have to budget at least an hour of drive time because the traffic comes to a stop between Manor and Austin.
The early departures began long before $4/gal gas prices. Now, throwing higher gas prices into the mix has them at least thinking about where they live. The 100% contentment with Elgin of the past decade has melted away and been replaced with the early stages of a thought process that asks the question “does it still make sense to live way out here?”
I think their tipping point may be much higher than most, and they’re willing to accept more pain. At $5/gal I think Sylvia and I would receive the call saying “we really think we want to go ahead and move closer in now”. Uprooting is easier for some than others.
The tipping point will be different for different people, but I see a lot of big SUVs and trucks driving in from Dripping Springs each morning on Hwy 290. Sylvia and I had a listing appointment way the heck out in Dripping, toward Johnson City the other day. Those folks also say “we need to get closer in” as the husband will now be working a new job in north Austin. Ouch. That drive hurts.
On the flip side of the location spectrum, let’s look at a neighborhood like Travis Height for a downtown worker. In answering the question “do I really want to pay $200 to $300 per square foot for a small, old house?”, $4/gal gas helps the house seem a little bigger and the condition a little better, relatively speaking. In other words, as gas prices rise, the more expensive closer in properties gain an greater imputed value attributable to lower commuting time and cost.
Let’s imagine a hypothetical couple who moved from California to Dripping Springs on 5 acres 3 years ago. They were on the fence about whether to live close in or far out, but the lure of the Hill Country, some big land and a few goats was too intoxicating to resist. After being ground down with daily commutes for two years, realizing the effort required to maintain big property and drive on underdeveloped roads, and with gas at $4/gal, the smaller older place in Travis Heights is starting to look pretty good. And there is a real, meaningful dollar amount that can be factored into the pros and cons equation.
Only problem is, now who’s going to buy the house way out in Dripping Springs?