Daily Real Estate News  |   August 8, 2008

High gas prices are affecting American workers' attitudes toward commuting and are prodding many to trade in their large homes in the exurbs for smaller, more urban properties.

Buying a 6,000-square-foot home with a large yard and a sport-utility vehicle to boot made sense when gas and property prices were low, economists say, but gasoline is now cost-prohibitive for many.

If the federal government lifts the heavy gas subsidies that encourage suburban growth, many Europeans pay $8 a gallon for gas, suburban residents will abandon their properties en masse and move in closer to urban transit stations.

"What were pluses of that lifestyle are now liabilities: a big SUV, a big home to heat, the energy needed to mow the lawn," says CEO Tom Darden of the Raleigh-based real estate conversion group Cherokee Investment Partners.

The firm takes properties close to transit centers in urban areas and develops them into housing.

Properties in the Washington, D.C.-metro area, Montreal, and Denver are thriving, says Darden, while property values in far-removed exurbs like Loudoun County, Va., and California's Central Valley are plummeting.

Source: The Washington Post, Eric M. Weiss (08/05/08)