Energy Price News Affects Drivers and Victoria Groves Homeowners
DiNoto Realty Group
909-921-2544 | http://www.DiNotoRealtyGroup.com
Energy Price
News Affects Drivers and
Victoria Groves Homeowners
Just about
the last thing homeowners expect is for the price of something we use every day
to drop precipitously. It isn’t just that we’ve grown skeptical about the way
official inflation numbers are formulated (although we have). It’s simply that
when it can cost more than a dollar for a Coke, we’ve drawn our own
conclusions. To quote The Wall Street Journal’s front page last Tuesday,
“Basic Costs Squeeze Families.”
So it’s
been slightly disorienting to experience what has been happening with energy
prices in. It’s not your imagination—as you drive past the neighborhood gas
station, the prices on the sign really have dropped nearly 30¢ a gallon
over the past month or so. As December began, prices from coast to coast were
at their lowest since December of 2010. And home heating oil prices were
following suit, leaving one to wonder if electricity and natural gas couldn’t be
far behind.
Rancho
Cucmonga homeowners should be among the most pleasantly surprised, for a number
of the reasons pointed out last week by Molly Boesel in an Insights blog
titled “An Unexpected Windfall.” Ms. Boesel is the Senior Economist at
CoreLogic, and like any card-carrying member of the economists’ trade, was able
to draw up a number of graphs and charts to bolster her point—which was that
lower energy prices might well stimulate housing demand. It’s not just that
more money remains in drivers’ and homeowners’ wallets as gasoline and
heating/cooling expenses sink. There is another less obvious factor.
That
factor is VMT (Vehicle Miles Traveled) per capita, and there seems to be
a strong relationship between it and homeownership rates. The logic is that as
prices for gasoline and diesel remain low, homebuyers are encouraged to move
further and further from urban cores (or wherever their jobs are located)—out
to where they can buy bigger and more expensive homes. If that sounds like a
bit of a leap, history suggests otherwise. VMT per capita rose steadily
alongside the increase in homeownership rates from 1994 to 2004; after which “the
trend then reversed from 2005 to 2014, with homeownership rates and VMT per
capita falling back to 1994 levels.”
So the possibility
exists that if the present energy price levels remain low (more precisely, if
future homebuyers believe that’s likely), it could “incent buyers to again”
move to larger and more expensive Rancho Cucamonga Home, heedless of how far
their personal commute becomes. It increases the number of potential Victoria
Groves homebuyers.
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We look forward to connecting with you soon!
DiNoto Realty Group
909-921-2544
Cal BRE# 01804308
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