Check this picture out - it will probably cause more foreclosures

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

As gas prices go up, house prices go down. Buyer's have less money left over to dedicate to mortgage payments. Therefore they have to pay less for houses.

gas prices

More owners will fall behind on mortgage payments, which will increase foreclosures and short sales, further fueling the downward spiral of market values.

Homeowners who budgeted only $2.00 per gallon and still have to drive to work and bus the kids around can find themselves in trouble in a hurry.

Gas prices impact the price of any product that requires delivery by any means of transportation. Those price increases again take away from borrower's ability to make mortgage payments.

Less purchasing power means less commerce which leads to more layoffs which causes more foreclosures.

Solving the energy policy problems is beyond the scope and ability of this real estate blogger. Helping homeowners who find themselves behind on payments because of gasoline prices, is not.

If these gas prices are breaking your mortgage payment budget in Louisville, please call me to discuss foreclosure avoidance options.

Pictures taken March 2, 2011 in Louisville, KY.

gas prices 2

Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

View Dave Halpern's profile on LinkedIndave_halpern twitterhalperndave_facebookDave Halpern QR CodeLouisville Foreclosure Realtors Dave Halpern

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Rainmaker
236,177
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

This will definitely have an impact if it continues.  Once inflation kicks in and we see interest rates climb, that will be another problem for the real estate market.  I hope I don't have to fill up for a while, my last visit to the pump was expensive!

Mar 04, 2011 05:38 AM #60
Rainmaker
1,630,442
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Fuel prices affect everything - including the price of groceries. I can see the correlation to more job losses, as people decide NOT to take week-end jaunts to recreational areas that are just an hour or two away, not to dine out or purchase things they don't absolutely need, etc.

And of course, job losses translate into more foreclosures.

Where I live it costs $5 in fuel to go to the grocery store. You can bet I don't run in to town because I need a $3 gallon or milk, or because it would be fun to have a burger for lunch. Errands get bunched.

The sad part is, we do have the oil reserves right here, but our administration won't let us use them.

Mar 04, 2011 05:59 AM #61
Rainer
24,650
Debra V. Edwards
edwards builders and realty, inc. - Cashiers, NC
Realtor/Builder, Cashiers, NC., Highlands, NC., Glenville

I'm with Nicholas.  Drill here, drill now, bankrupt those countries that hate us, give our folks work and remedy the problem of security here in America and became self-reliant.  Starting today would not be too soon.  Can you imagine the uplife in spirits of the American people???   

Mar 04, 2011 06:40 AM #62
Rainer
34,869
Chad Boyers
The Danberry Co.- Toledo, Perrysburg, Sylvania, & NW OH - Toledo, OH

I'm wondering if Exxon Mobil will have another record breaking quarter for profits?

Mar 04, 2011 06:50 AM #63
Rainer
46,716
Phil Porter
Charter One Realty - Hilton Head Island, SC

I'm sure the mideast revolutions are not the total blame for rising gas prices. It is exciting to see all these countries trying to rid themselves of autocrats, but I have to admit it is a little unnerving to think how the end results might affect our nation (and our lifestyles). I don't think there is any guarantee that creating democracies in those nations will bode well for the United States.

Mar 04, 2011 06:53 AM #64
Rainer
27,008
Stephen Gaudet
Gaudet Inspections - Manchester, NH

Here's something you may or may not be watching which is our dollar.  In the enclosed chart we have what is called a triple bottom.  The dollar is trying to break the low of 75.00.  Keep in mind every time we get down here gold does the inverse.  Notice gold broke new highs?

Consider every time the dollar is worth less your pay check shrunk, cost of goods went up, etc...  Oil is based on the value of the USD, if it's worth less oil goes up.

 

 

 

Mar 04, 2011 08:20 AM #65
Rainer
512,213
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

The price of a gallon of regular unleaded in Huntington Beach, CA this morning was $3.97. The state sales tax per gallon is 15 cents, the state fuel tax is 54 cents, the federal fuel tax is 18 cents, the state underground tank fee (tax) is 2.4 cents, so the sum taxes per gallon is 89 cents. The higher the sales price the more sales tax consumers are paying and the more revenue the state collects.

The gas station owner earns about 3-5% GROSS margin per gallon or about 15-20 cents, while the tax paid per gallon is 22% or 89 cents. The combined sum is $1.09 per gallon.

The gasoline yield per barrel of oil is 48 gallons, so at $102.00 per barrel, the per gallon cost is $2.12. The oil company's marketing profit is 76 cents per gallon. The oil in the ground discovered 20 or 30 years ago and still producing may cost as little as $25 a barrel, so how much is the oil company earning? BILLIONS!

What does this reply have to do with your post? Nothing except to provide information about who is profiting from increasing prices of fuel. Thankfully, I'm not a gas station owner or employee during this economy, Ican imagine the angst the consumers have against anyone in gas station business.

Unfortunately, our economy must have fuel regardless of costs, so we shall adapt and spend less on other things and reduce unnecessary transportation and I doubt this will increase foreclosures.

Mar 04, 2011 09:14 AM #66
Rainmaker
1,431,864
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I think it will have a negative impact on sales.  We are a commute driven community.

Mar 04, 2011 09:31 AM #67
Rainmaker
508,598
Sylvie Stuart
Realty One Group Mountain Desert 928-600-2765 - Flagstaff, AZ
Home Buying, Home Selling and Investment - Flagsta

The ripple effect will be really interesting to see. Some areas will be deemed "less desirable" probably because they are further away.

Mar 04, 2011 10:19 AM #68
Rainer
49,587
Chris Lefebvre
eXp Realty - Methuen, MA
Methuen MA Real Estate Pro

Higher gas prices definitely won't help the economy or the consumer.  Some analystis are predicting it going up for months to come.  The mess in the middle east certainly isn't helping.  Stephen, great point about the dollar.  The rising cost of food is another concern.  Also, oil is used to produce plastic and other goods so those costs will rise as well with higher oil and don't forget that everything that is produced is shipped in some manor and trucks use fuel as well.

Mar 04, 2011 03:59 PM #69
Rainmaker
181,027
Karen Steed
Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton - Tallapoosa, GA
Associate Broker Haralson Realty

I agree that the increase in gasoline prices will cause market values to decline further in some areas. Our system is out of whack, but if we can ever hit bottom, we can begin a true recovery.   

Mar 04, 2011 04:16 PM #70
Rainer
37,556
Kimberly Brandon
Smart Moves Real Estate - Venice, FL
Broker/Owner

Great point!

Mar 05, 2011 03:40 AM #71
Rainer
86,301
Torgie Madison
Quicksilver Real Estate Solutions, LLC - Portland, OR
Websites and Contact Management

It will be interesting to see what kind of effect these gas prices are going to have both short term and long term. Hopefully people will be able to give up their gas-guzzlers before their homes!

... 22 gallons per fillup? That's incredible. Do you drive a schoolbus to work?

Mar 05, 2011 04:26 AM #72
Rainmaker
192,163
Allyson Hoffman
RE/MAX of Barrington - Barrington, IL
Making Today's Dreams Tomorrow's Reality!

I'm wondering when our government will get around to embracing the use of NATURAL GAS which we have in HUGE abundance, runs much cleaner than what we have now AND will cost about 1/5 of what we pay for current gas.  I'm amazed that this is not being actively pursued ... imagine what that single change could do for all of us!

Mar 05, 2011 06:57 AM #73
Rainer
299,544
Paddy Deighan JD PhD
federalfinanciallawgroup.com - Vail, CO
Paddy Deighan J.D. Ph.D

the frightening thing is that six months ago, the prices were about $1 dollar per gallon cheaper!!  And there is a worldwide glut of oil to boot!!!

Mar 05, 2011 07:26 PM #74
Rainer
47,026
Lucien Vaillancourt
Native Sun Realty, Inc. - Jacksonville, FL
Jacksonville Florida Real Estate

Make no mistake.  The cost of oil affects everything, not just gas prices.  Any increase in oil prices has a corresponding increase in the price of everything else from food to electricity.  It is easy to connect an increase in expenses to an increase in foreclosures and the continued fall in home prices.

Without getting too political this is exactly what the current administration wants.  In order for higher cost "green energy" to become viable it must be comparable in price to conventional fossil fuel energy sources.  Since lowering the cost of green energy probably won't happen in our lifetime the only other option is to increase the cost of fossil fuels by taxation (cap & trade), limiting the supply (bans on drilling, exploration, and new refineries). and the occasional turmoil in the middle east (Libya).

Mar 06, 2011 05:21 AM #75
Rainer
8,990
Bob Sweazy
Prudential A. S. de Movellan Real Estate - Lexington, KY

Great post. Thanks.

Mar 06, 2011 05:28 AM #76
Rainer
40,120
Vince Gallagher
(Mold Solutions - Willamette Valley-Portland-Coast) - Portland, OR
Mold Inspections, Mold Testing, TM-100 Remediation

"The current administration " seems to be responsible for a lot of problems. No mention of the previous 30+ years (D's and R's) that didn't address this problem. Peak oil is real. We are running out of cheap oil. The newer shale oil sources cost a lot more. In fact they cost nearly as much as the new  alternative energy sources. Alaskans get a check every year and the U. of Texas reaps giant gains from higher energy prices. There are American interests that oppose alternative energy with enthusiasm.  "Drill Baby Drill". Don't look at who profits or what a shambles rural America sometimes ends up in.  Green energy is getting less expensive every year. We need to invest in American green enrergy or we will be buying it from foreign sources too.   

Mar 06, 2011 07:42 AM #77
Rainmaker
233,692
Liane Thomas, Top Listing Agent
Professional Realty Services® - Corona, CA
Bringing you Home!

You hit the nail on the head! I gassed up on Friday at $3.69/gal and yesterday, just 2 days later, $3.79/gal. The increase in gas always hits the working class the hardest.

Lucien makes a good point, green alternatives are still too expensive. We need the govt and the private sector to work together, step up, and create affordable, new alternatives.

However, it is possible in our lifetimes. Look at how much technology has changed...remember life before the cell phone?  iPod? iPad? iPhone? How about DVD? DVR? digital camera?

Yes, we can do this, and we can do this in our lifetime.   

Mar 07, 2011 02:27 AM #78
Rainer
99,985
Michael HassanPour
Beverly Hills-Coldwell Banker Beverly Hills North - Beverly Hills, CA
Esq. Beverly Hills Properties, Brentwood, Bel Air

I am sure, very soon, we will see an alternative. The world needs a better solution. Gasoline has brought nothing but misery for most of the Middle East. Other than an elite group, ordinary people have never enjoyed the fruits of black gold.

I hope you are right Liane. We have to do it.

Mar 08, 2011 01:05 PM #79
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