Rising Gas Prices Drive Desire for Shorter Commutes and Home Offices

PARSIPPANY, N.J. (May 18, 2011) – The high cost of gasoline is not just emptying wallets; it is also impacting where consumers choose to buy a home. According to a new Coldwell Banker survey among its network of real estate professionals, 75 percent said that the recent spike in gas prices has influenced their clients’ decisions on where to live, and 93 percent said if gas prices continue to rise, more home buyers will choose to live somewhere that allows for a closer commute to their work.

The Desire to Be Close to Work, or Work from Home

Out of those who said gas prices affect where consumers want to live, being closer to work was the leading consideration. 

Drive time and racking up miles en-route to the office caused 89 percent to say buyers look for homes closer to work. Forty-five (45) percent are seeing buyers choose homes closer to shops and services as a result of increasing gas prices.*

Some buyers are skipping the commute altogether.

More than three quarters of the real estate professionals surveyed (77 percent) said more buyers today are interested in having a home office compared to five years ago, and 68 percent of those respondents said that they believe the high cost of gas contributes to this new work from home trend. 

Currently, there are more than 25,000 homes available on coldwellbanker.com that include “office” as part of the listing description.

“The decision to buy a home has always been tailored around the personal, multi-faceted lifestyle needs of each buyer,” said Jim Gillespie, CEO of Coldwell Banker Real Estate.  “Today, rising fuel costs and a person’s decision to commute or perhaps work remotely are additional factors of the decision home buyers must consider.”

An Increased Interest in Urban Living

One trend continuing to rise in popularity, partly because of the gas price phenomenon, is the interest in urban living.

Fifty-six (56) percent of the real estate professionals surveyed said that they are seeing more home buyers interested in urban living compared to five years ago.

Of the subset that recognized this trend, 93 percent strongly agreed or agreed that one reason is an increased interest in shorter commutes.

Eighty-one (81) percent of these respondents also strongly agreed or agreed that the desire to reduce spending on gas is a factor.

According to those who have seen an increased interest in urban living, other reasons behind this trend are:

Having everything at your fingertips (91 percent strongly agreed or agreed)

Being able to walk to places (76 percent strongly agreed or agreed)

Being near public transportation (52 percent strongly agreed or agreed)

Methodology: Coldwell Banker Real Estate conducted an online survey among 1,188 Coldwell Banker real estate professionals across the United States about the impact of gas prices on home buying decisions and trends surrounding urban living. The survey was fielded between April 28, 2011 and May 3, 2011.

About Coldwell Banker®

Since 1906, the Coldwell Banker® organization has been a premier provider of full-service residential and commercial real estate.  Coldwell Banker is the oldest national real estate brand in the United States and today has a network of nearly 92,000 sales associates and brokers working in approximately 3,300 offices in 50 countries and territories. The Coldwell Banker brand is known for creating innovative consumer services as recently seen by being the first national real estate brand to augment its web site www.coldwellbanker.com for smart phones, the first to create a iPhone application and the first to fully harness the power of video in real estate listings, news and information through its Coldwell Banker On LocationSM YouTube channel.  The Coldwell Banker system is a leader in specialty markets such as resort, new homes and luxury properties through its Coldwell Banker Previews International® marketing program. Coldwell Banker Real Estate LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act.  Each office is independently owned and operated. 

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What information do I need to know about home appraisals and home inspections?

 A.  In general, a home appraiser determines the value of a property and a home inspector determines the condition of a structure.  While appraisals are primarily for lenders, they also ensure that buyers don’t overpay for a property.  Home inspections are for buyers. 

A home appraisal includes details about the house, a description of the neighborhood and side-by-side comparisons of similar properties. It also contains an evaluation of the area’s real estate market, notations of major problems with the property that will affect its value and an estimate of the expected time it will take to sell the property.  You should have your lender order the appraisal, and you are entitled by law to get a copy of it.

A home inspection is an evaluation of a home’s condition that may identify improper building practices or the need for major repairs, as well as fire, safety and health hazards. You should always include an inspection contingency in your purchase offer.  The information will help you determine how much you’re willing to pay for a home, what repairs will be necessary and whether or not you want to walk away from the deal.

If you have any questions, or need capable and trustworthy representation, please call me at 352-1222.

Foreclosure: A Community Bank Perspective

Two weeks ago I attended a meeting headlined by management of local community banks. They spoke about their perspective of commercial property foreclosure. While not all of you own commercial property, the information can be readily applied to residential property, too. Keep in mind that all the following information concerns local institutions, like Ameris Bank, The Savannah Bank, Queensborough, etc… and not larger companies like Wells Fargo or Suntrust.

When someone goes into default on their commercial (or residential) property, local Savannah banks know they are dealing primarily with distressed people not distressed assets. Foreclosure is the last thing a bank wants. So at the first sign of trouble, talk to the bank and avoid surprises. The lien holder is immediately notified when property taxes or insurance premiums are unpaid or late. If you are in trouble, the bank already knows before you bring it to their attention. Pretending like nothing is wrong or avoiding a conversation with the lender about these missed payments makes lenders nervous. It looks like you don’t know about the problem, don’t care or both.

If you are given a notice of default it is not the end of the world; don’t take it personally. Respond quickly and avoid an adversarial stance. Also be open to communication and don’t assume it is too late to find a solution. A notice of default is what it is- it isn’t a moral judgment or personal condemnation.

If you have a “game plan” (a way to get back on track), banks can justify negotiating any part of your loan. A game plan is not immediately asking that the bank take a write down or take back the property. A game plan helps the lender make fact-based decisions about what they should do. Give them information about the current status of the property, tenants, recent comparable sales or rental data. If the property is for sale, provide data on traffic, showings, feedback, etc…

The most important thing is to make sure your plan shows a way the bank loses less than taking the property back. If the result of your game plan is that the bank takes a loss, that doesn’t mean your plan is awful. The bank may have already figured a potential loss into the equation when they gave you a loan in the first place.

But what if the bank has sued you? This means you’ve either ignored notices of default and/or they think you have the assets with which to pay your loan. Try to get back to the negotiating table. Small town lenders want to work with you. The last thing they want is to foreclose on your property. Because people on both sides of a negotiating table are stressed or distressed all parties have common goals- resolving the problems and doing what’s best.

Nothing written about herein constitutes legal advice!