Now here's a completely accidental effect of higher gas prices: the housing market in your local suburban neighborhood could lose steam. After all, the cost of driving your SUV on your 1 hour commute could go way up. At that point, the reasoning which has prevailed for so long -- move out of the city and get more house for your dollar -- ceases to make sense, as you spend the cost of a higher mortgage payment (and maybe more) on fueling your gas-guzzling commuter vehicle.
Cheap gas may just have been the sole reason that developers have had such a hey-day with building further and further out of metropolitan areas. High gas prices might just bring cities back into line, and cause "smart", people-friendly high density housing. Given that some analysts think that gas could hit $4 or $5 a gallon -- commuting is quickly losing any attraction. If you add the wear and tear to your vehicle, and the wear and tear to your nerves on our over-crowded roads, I could see a corresponding wave of movement back into the city that would leave suburban housing prices in the dirt.
This won't happen overnight: many of us are committed to our quiet suburban refuges, and we wouldn't have it any other way. But if gas prices stay high, the cost of commuting becomes a modern version of the Chinese water torture: we'll be slowly and steadily applying pressure to our finances, until something has to give.
In the meantime, you might want to trade in your big car for a fuel-efficient model. Perhaps ditch the car completely and buy a moped to get you to the closest train or bus. Who knows? Gas prices could be the push that makes us all go greener.
Michael
