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 Electric

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.

Your Perspective

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 you think?