How to Drive Down Home Prices
Do gas prices have something to do with housing prices?
If you want to buy a house for a bargain, look in areas that have high gas prices – the asking price might be a lot lower. That’s one fascinating hypothesis from a novel new study conducted by researchers at two universities.
Not only that, but “falling gas prices can shorten the time it takes a house to sell,” says the study, conducted by Florida Atlantic University and Longwood University in Virginia.
By analyzing data in central Virginia, researchers concluded…
For every $1 per gallon decrease in gasoline price, average time to sell a property decreases by 25 days. In addition, for every $1 per gallon decrease in gasoline prices the average selling price rises by 2.4 percent, which amounts to roughly $4,000 per sold property in the study.
So what’s the connection? Researchers think it’s two factors – one obvious, one amusing.
First, it’s simply a matter of consumer confidence and “more disposable income for potential buyers.” But it also might have something to do with motivating real estate agents, who spend a lot of time in their cars…
The effort put forth by the listing broker is likely to increase with cheaper gas prices, which means more showings on a particular property.
Whatever the reason, the research suggests this might be a good time to buy: Gas prices are down almost a dollar from where they were this time last year. If you’re considering buying or selling, don’t just look at gas prices. Look at Consolidated Credit’s extensive expert advice on the topic. Check out the Housing Counseling section.
Driving the Point Home
This map shows your state’s average gas price and its average home values. It’s not scientific, just for fun. Researchers studied one market and theorize that gas prices affect home sales in some obvious but also amusing ways. See the story for details.
Sources: Gas prices are from GasBuddy, July 7, 2015. Home values are from Zillow’s Zillow Home Value Index for All Homes, May 2015.