Gas prices latest worry for real estate market

The housing market was serious effected by the Rising gas prices. The prices were falling around 27% in Southern California in May from a year ago.
Some people would like to buy a better house which may needs to accept a burdensome commute. But this time, there are more and more new house buyers are factoring gasoline costs into their purchase decisions, said Dan Griffith, a Rancho Cucamonga-based real estate agent.
The sale price of the median home sank from $505,000 a year earlier to $370,000 in this may in six Southern California counties, according to DataQuick Information Systems.
Because of high gas costs, the value of these so-called suburbs may continue to droop after urban markets begin to recover, said Christopher Leinberger of the Brookings Institution, a Washington think tank.
Under the old model of past 50 years, you could drive far away from major working sites until you could afforded for a house because cheap energy costs made it possible, ," Leinberger said. "Now as energy prices go up, the housing prices out there on the fringe take a major hit."
Some new customers of these days are more care about accepting modest homes if it close to their working place or not than past, said by Lynette Williams, a real estate agent in Pasadena. They want to find a house which can economize on their expenses," Williams said. "Compared to two years ago, they are staying in closer proximity to their jobs. They're more focused on the neighborhood they want."
Some people even want to sell their car to get a smaller car with better fuel economy to commute for working. Some of them cannot buy themselves little things because they don’t have extra money to pay.
But home values must fall until what people can afford to pay, said by economist Christopher Thornberg of Beacon Economics. He also pointed out the prices just fell around half of price, and he predicted prices will be down 40% to 50% [from their peak] in Southern California when all is said and done."
This time is the buyer’s market; some buyers are being very aggressive. They think prices are dropping, and if they wait long enough, maybe the seller will reduce the price more.
I think the prices of gas are affecting not only real estate but also everything of the people's livelihood. Everyone has to face these problems, but this time is also a good time to choose a good house. I think the most important point is location. If you choose a right place which include good neighborhood, schools convenient communications, public security, and living functions. It will resist the inflations. I think to invest a correct house can help us not to sink into the crisis.

By Roger Vincent, Los Angeles Times Staff Writer June 17, 2008