TRENDS: DC housing market slumps in suburbs, sustained in cities

The Washington Post has an excellent analysis of a large source of high gas prices today – our post-WWII transportation and housing policy decisions. From today’s Post:

Cheap oil, which helped push the American Dream away from the city center, isn’t so cheap anymore. As more and more families reconsider their dreams, land-use experts are beginning to ask whether $4-a-gallon gas is enough to change the way Americans have thought for half a century about where they live.

“We’ve passed that tipping point,” U.S. Transportation Secretary Mary Peters said.

Since the end of World War II, government policy has funded and encouraged the suburban lifestyle, subsidizing highways while starving mass transit and keeping gas taxes much lower than in some other countries.

Home prices in the far suburbs, such as Prince William and Loudoun counties, have collapsed; those in the District and inner suburbs have stayed the same or increased. A recent survey of real estate agents by Coldwell Banker found an increased interest in urban living because of the high cost of commuting.

Brookings says transportation costs are now second only to housing as a percentage of the household budget, with food a distant third.

We’ve seen similar real estate trends here in Baltimore as well.

The current gas crisis is the impact of decades-long dependence on highway projects at the expense of transit projects. With more Americans living farther apart and commuting more, America’s demand for oil started to grow after WWII and hasn’t stopped. Higher demand equals rising prices. Now that China and India are joining us in our love of the automobile, you can be sure that this isn’t a short term bump in gas prices, it’s a long term trend that’s here to stay.

There is no question that development around transit is now one of the few bright spots of the real estate market. With the advent of the zipcar and other alternative vehicle-access programs, living in an urban or near-urban environment without relying on a car is not only possible, it’s now looking more and more logical.

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