MikeBolen.com

Nationwide, home prices in neighborhoods with long commutes and no public transportation are falling faster than prices in communities closer to cities, according to a study by Joseph Cortright, an economist at Impresa Consulting. For example, his study found that prices in distant suburbs of Tampa fell 14 percent in the last 12 months, versus a 9 percent drop in areas nearer the city. “The decline in almost every case is worse in the suburbs and exurbs than it is in close-in neighborhoods because transportation costs are so much more of a factor,” says Cortright

In the years ahead, concerns over sprawl, traffic congestion and the likelihood of higher energy prices will accentuate the desirability of both suburban town centers and more convenient urban living environments such as Napa, Santa Rosa, San Rafael, San Francisco and the like. Extended periods of high fuel prices will end fringe suburban growth and kill demand for apartments with outsized commutes…suburban apartment developers beware.

Keep in mind our entire economy reflects the cost of energy: the cars we drive, the homes we occupy, the kinds of factories we have and the equipment in them, expect large changes in all of these things. The national average price of regular gasoline topped $4.00 a gallon for the first time, AAA, the largest U.S. motoring club, reported yesterday. “At $4 per gallon gas, $125 per barrel oil and $10 per million Btu natural gas, a lot of activity becomes uneconomical,” says Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania.

When you factor in high cost transportation, housing far from urban centers becomes much more expensive, and in many cases more expensive than housing in or near a downtown center. Bottom line sell apartment holdings in far flung suburbs and rural locations if it takes 10 minutes or more to reach vital services your apartment asset will decline in value over the next 5 years along with a rise in vacancy and a reduction in gross income.

BAM! BAM! BAM! I am pounding the table, buy apartments in close proximity to downtown or town center areas. There are many offerings on the table at very attractive prices across the bay area.

 Looking to buy? Here at the RE/MAX Napa Valley office RE/MAX Cornerstone I specialize in off market pocket listings. Over 65% of my sold deals are never advertised. Most are offered to sale only to buyers who have signed an exclusive buyer agency agreement. To gain access to the off market or foreclosure inventory or to learn how I work with buyers contact Mike Bolen at Mike@MikeBolen.com or 707-254-9999. I also work with over 20 investment buyers in an exclusive buyer agency agreement if you are looking to sell no one has more multifamily apartment buyers than Mike Bolen.