May 06, 2005
Will gas prices drive down the cost of housing?
Ever wonder what real estate professionals say about the real estate bubble when their clients aren't around? After reminding agents that "Great real estate booms in our country can be followed by great
declines in property values," an industry expert writing today in RealtyTimes used the starkest language to describe a new factor in the growing list of downward pressures on housing prices:
"Investment experts on Wall Street are predicting that gasoline prices here in the USA will reach $4 to $5 a gallon within the next several years. And one of the oil industry's most respected investment bankers says that he sees the price of gas ballooning to $7 a gallon in the years ahead. There's simply so much more demand for petroleum from expanding economies in Asia..."
Have rising gas prices (as shown on this pump in Waltham near Route 128) already influenced where you are house hunting, or shifted your thinking about the real estate bubble? Do you think prices could really rise above $5 per gallon? At what price would commuting costs change where you would chose to live?
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Tracked on May 23, 2005 3:11:38 AM
I'm convinced so far that the real estate bubble is really an interest rate/loose money bubble. When the bubble bursts or deflates, other specific "causes" may be responsible in the narrow sense but not in a deeper one. I imagine in those, the cost of oil/gas could be one of them, though I suspect it wouldn't rank at the top. In Boston at least, the frothiest markets are public transportation accessible and fairly central.
Posted by: Chris Cagle | May 14, 2005 8:24:58 PM
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