Does the meltdown in U.S. housing prices have anything to tell us yet about the impact of peak oil?
According to the current real-estate column in the Georgia Straight: yup. Carilto Pablo quotes Oregon economist Joe Cortwright:
Properties located in cities and neighbourhoods that require residents to go on lengthy commutes and don’t provide many transportation alternatives have fallen in value more deeply than those in “more central, compact and accessible places”, Cortright wrote in Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs.
My comment in the column:
“It’s part of the larger question about how the future is going to play out in the world of more expensive gas, carbon taxes, where you’re going to put the investment, and whether if, as promised, increasing density actually delivers a reduction in transportation costs,” Price explained to the Straight.
An article in today’s business section of The Oregonian supports Cortright’s assertions and provides further hints of what’s to come:
“the Portland area saw its median home price drop 3.5 percent in April compared with April 2007 — the biggest such decline since at least 2001.
The housing market continues to be worse in Clark County (Vancouver, WA). The once-fast-growing county suffers from an oversupply of new homes. Clark County home prices fell 5.7 percent in April to $250,000, down from $265,000 last April. The inventory of unsold homes was 12 months.”
http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/121091010748010.xml&coll=7
yes thats right
blame the housing meltdown on peak oil. lets get some perspective. fuel is still the cheapest thing you spend on your vehicle. next time you renew your insurance with ICBC, or do repairs and maintenance, compare that costs with the costs of gas.
the housing meltdown has very little to do about peak oil and everything to do with speculation and bad borrowing practices. if their is a geographical correlation between city core and house prices, i would imagine a just few more variables such as time.
The article makes a good point. I live in a bedroom community in which most people drive more than 60 miles one way to work. Houses here are priced lower than those closer to where the jobs are. Many, with fuel efficient cars, are spending about $120 a week in fuel costs to get to work.
Djmk, you missed the point of the article. It’s one thing for there to be a collapse of a bubble. It’s quite another when there’s a measurable migration from the suburbs. The reason for the latter is affordability when the overall, increasing cost of vehicle ownership/operation is factored in. There is also the broad effect on the costs of goods and services with the increases in fuel price. The higher the price goes, the less affordable it becomes to have dispersed communities designed around fossil-fuelled transportation.
The situation in the Lower Mainland is not quite the same as the U.S. in a number of respects. The ‘burbs here are planning to become cities in their own right, developing into more compact forms. Therefore, there may not be as much a migration as in some places south of the border. Nevertheless, there has already been a noticeable growth in people moving Downtown as more condos are completed. They recognize there is more to quality of life than having a McMansion and an SUV.
I think I’m a little late on this, but no matter, I’ll weigh in.
There are a few counter-examples to this. Houston is one of them. That city was not significantly affected by the bubble on the way up or the way down (ie- prices didn’t rise much or collapse either), yet its citizens are heavily car-dependent.
I’m not saying that the price of oil has nothing to do with housing prices, but I am saying that (as with everything out there) the answer is far more complicated than just blaming a single cause.