New Jersey Real Estate Agent

What do high  gas prices have to do with New Jersey real estate and      Princeton NJ real estate in particular? The first similarity between real estate and gasoline prices is that lately, moving in opposite directions, they are making a lot of people unhappy and stressed. The second correlation is the effect gasoline prices could have on New Jersey real estate.

The double whammy of raising gasoline prices and the declining real estate prices in the greater Princeton NJ, is a topic I hear about every day from my clients and consumers in general. My clients would strongly disagree with the sign on this picture. My guess, the only people saying "thank heaven" are the management and shareholders of the oil companies.

My colleague Jim Duncan from Commonwealth of Virginia opined on the topic here . Lauren Baier Kim on the WSJ real estate blog asks a question "Higher Gas Prices, Shaggier Lawns?" suggesting that something has to give. 

This topic is on people minds and it's difficult for me to not think of the effects of the continuing gasoline price increases would have the area where I live and work -New Jersey and Princeton real estate.  With the disclaimer of not being an economist, here are my thoughts. For suburban areas where many people commute to their jobs, gasoline price increases could lead to several things.

If you live in Princeton and  commute 50 miles each way to work $1 gas price increase could roughly mean $15-$20 increase in weekly, or $80 in monthly increase in commuting costs. For people with stable incomes this adjustment, although not pleasant and welcomed, could possibly be made in other areas of their budget.

If gas prices continue to escalate further (as some are suggesting) to European levels of $8.00/gallon, it would translate to a possible $300+ monthly increase. This type of adjustment would be difficult to make for most people.

For first time buyers coming into the real estate market the $80 increase in budget for gasoline could effect their ability to buy Princeton real estate and/or qualify for mortgage.

We can change our consumer behaviour and buy smaller and more fuel efficient cars. I anticipate that these changes may not be enough to balance our budgets.

The question for home buyers if and how they should change their real estate behaviour. One answer would be to paying particular attention to proximity to Public transportation, when buying New Jersey real estate anywhere across the state.

This is important for several reasons. First, because you would be able to substitute driving for trains/bus transportation and possibly save on gasoline. Second, because New Jersey real estate located in close proximity to public transportation could hold it's value more then areas which are not. There are some studies already suggesting that real estate along the New York - New Jersey commuting train line has maintained it's value better then other areas.

If there is any good news, it's the fact that Princeton NJ, West Windsor and some other surrounding communities close to the train line are more likely to be beneficiaries of stronger buyer demand and more stable housing prices then other New Jersey towns. This will become increasingly important as people evaluate their choices for relocating to New Jersey, given the high gasoline and commuting costs.

Princeton NJ real estate would continue to be an attractive choice for many buyers.

Photo by ewen and donabel

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