Energy Prices Seriously Impact Home Buying
Jim Grapes - July 5, 2008
Energy prices have begun to seriously impact the home
buying decision process. People shopping homes for sale
in Spokane WA have many new considerations
than in the very recent past. Energy price increases have impacted the Spokane real
estate market in more ways than is immediately obvious. Throughout this
article I will be discussing the situation in Spokane
Washington; however energy costs have
dramatically increased all across the United States and these observations are
likely to be a common experience for more than just Spokane Realtors.
Can You Believe Those Prices: Gasoline
A web site that measures, tracks and charts the
historical price of gasoline reports
that unleaded regular gasoline prices in Spokane have risen from the most recent
nadir of $2.19 per gallon in January 2007 to a new high point this week of $4.13
per gallon, and nobody is calling this new peak price a zenith. Prices are
expected to increase perhaps over $5.00 per gallon. Where will gasoline prices
top out at?
Can You Believe Those Prices 2: Natural Gas and
Most people already were complaining about their utility
bills last winter. Spokane experienced what many people called a fifty-year
winter in snowfall levels and cold weather. In the July 3, 2008 edition of the
Spokesman-Reviewnewspaper the top
story was an announcement from the local utility company for Spokane County residents to
expect major price increases in their utility bills this fall and winter. Quote,
"Avista Utilities warned
consumers Wednesday that the pain they're suffering at the pumps could spread to
their parlors next winter." According to Avista's gas supply director, the
wholesale price of natural gas has increased 73 percent from Jun 2007. This
summer people should consider ways to limit their use of gas and electric to
heat their homes and water this winter.
Less Open House Visits
I have noticed a measurable drop in open house visitors
from this time last year. I can only guess that it is at least partially due to
the high price of gasoline.
Online Home Shopping
People today want to shop homes for sale in Spokane Washingtonspending an entire day and burning up a bunch of gasoline. They
don't like to spend money for gas and they don't want to waste their time. Most
people are even considerate of burning their Realtor's gas unnecessarily. People
are going green and reducing their carbon footprint. That means not wasting gas
unnecessarily regardless of who is paying for the gas to drive around themselves
or their Realtor. This is where the
internet and browsing the homes for sale online comes into factor. The Internet
Data Exchange or IDX has revolutionized the way people search for homes.
Searching the data base by exact needs criteria and viewing photographs of
properties at home saves time and fossil fuels. Previously the main motivations
was convenience and to avoid dealing with sales people until they were ready to
buy; now the cost of driving around to view homes is forcing people to view them
online. At least it adds the preliminary step of at first to narrowing down the
list of homes for sale to their top viable candidates.
Energy Efficient Homes
These days, people want to know how much it will cost to
heat the home next winter. They often ask for copies of utility bills or that
the seller discloses what they pay for heating costs. They ask their inspector
to pay close attention to insulation and potential for drafts and heat loss.
They want to know how old the appliances, furnace and water heater are.
Replacing or upgrading these
items represents a future expense that could be beyond their budget. Spokane
properties with excellent insulation and newer energy efficient appliances have
an enormous advantage over those that do not in the mind of the energy efficient
conscious home shopper. I advise my home sellers to prepare for these types of
questions and perhaps upgrade the energy efficiency of their hometo address some of these concerns as a selling advantage.
Closer to Work
Home shoppers in Spokane are tending to look for homes
closer to their place of employment. Previously I have found that the location
of next home was exclusively based on price and neighborhood desirability. Now I
see that people factor in an annual cost of their commute. For example, very
nice homes tend to cost less the further you are from the city of Spokane. Land
is less expensive the further you get from town. However, the cost of driving
the extra distance may exceed the monthly increase in the mortgage payment of a
home closer to work and town. It's not always cheaper to live further out when
you factor in the cost of commuting. Additionally, people see an advantage of
more time for their family or hobbies if they don't spend as much time commuting
in the car.
Public Transportation Routes
These days, people occasionally ask about public
transportation. They ask, "Where is the closest bus route?" and "Does this route
go near where I work?" I have found a need to post Spokane Transit informationand
links on my own web site for some home shoppers to compare with the locations of
homes they are interested in buying.
Think about energy prices and they way you drive and
shop for a home. Are you a Realtor or perhaps someone shopping for a new home?
Do any of these considerations factor in to your home search or the searches of
your clients? Has the price of gasoline affected the way you run your real
estate business? Are your clients shopping differently this year than last? What