Gas Price Math – Looking Back at 2008

The other day, we compared the (transportation)costs of living in Crozet/Albemarle County with the (transportation)costs of living in the City of Charlottesville.

Researching that story caused me to look at some of the stuff I wrote a few years ago.

In 2008, when gas prices were crazy high, I wrote about how the costs of fuel/transportation had fundamentally shifted buyers’ demands. On American Genius then I wrote (no longer available):

“Using back-of-the-napkin math – if/when gas costs five bucks a gallon –

If driving to the store/work/etc costs an additional ten to fifteen dollars for those properties not close to urban centers, and the properties the are close to urban centers are able to save that gas money – isn’t it reasonable to conclude that that theoretical savings of three to five hundred dollars a month would then be applicable to one’s mortgage payment?”

That – $4/gallon – was a (short-lived) world shift. It’s important to think about gas prices with respect to home buying with a longer than 6 month perspective. Just because gas prices are low now doesn’t mean they will be in 6 months. Or 18 months.

Unless you live in the City or close-in urban ring, more likely than not, you’ll still need to drive the same amount.

One of the many roles a good Realtor does is ask questions – questions that buyers and sellers need to ask themselves that they may not have thought of. Much like a psychiatrist, posing questions and then letting the client work through the answers is a critical part of the homebuying/evaluative process.

Where do you want to live and What’s it going to be like living there? are two of the bigger questions.

Looking back at 2008, unfortunately, little has changed since the depth of the 2008 recession.

• Big vehicles are selling remarkably, record-settingly well
• Houses are getting bigger again.
• Less often now does “gas price” itself come up as a metric that buyers bring up; I tend to prod with that question though.

That said, all the calculus in the world won’t convince a buyer to live somewhere he or she doesn’t want to live.

Ultimately, you ought to love where you live.

The #1 question I ask my buyer clients to ask themselves:

“Not “are we qualified” but Will you be happy here in 17 months? Why 17 months? It’s beyond the chaos of settling in and before the next phase of life tends to set in – just long enough to really know your commute, your grocery stores, coffee shops, running and biking routes. This is a question that usually leads to good and hard conversations – conversations that I facilitate when necessary, but usually we start the conversation and my clients continue the conversation later – in the car, on the phone, text, over dinner … So if you’re in the midst of the buying process (we’ve already talked, right? ), ask yourself – “will I/we be happy here in 17 months?””