We've been watching gas prices slowly creeping up past the $3 a gallon mark. More of our disposable income will be suck in to pay gas. If you drive 60 miles a day and your car averaging 20 MPG, you would spend at least $9 a day!! Multiply that 5 working days. It's easy to spend $50 bucks a week on gas alone.
The reality of increasing gas prices would hit our pocket sooner than later. It's going to hurt our pockets badly. Inflation? Possibility. When prices of goods go up and income remain stagnant..our money doesn't go that far anymore. Our disposable income is shrinking. What's more -- when the US is weighing China's oil policy, we know that gas prices will continue to rise above today's $3 mark. Builders already feeling the heat.
Depending on where you work. Living closer to work would look more attractive now than ever. Or else, employers will have to allow employees have flex time coming to work. Telecommute? Sure, why not. Living in large houses consume more energy and that means more money to spend on utilities. Okay our pocket got dings from left and right. Options? Trade-in cars to energy-efficient cars. Bike to work. Walk to work. Use Metro. Downsize to smaller homes. And live close-in.
Because the Fed employed about 40% of DC/VA/MD residents. That means the majority works in DC. If you can tolerate the price living close-in would be a better option. Affordability is a different story. Metrorails run ups and downs through some of Arlington's neighborhoods. This is one of the reasons, Arlington become the most expensive neighborhood in the Northern Virginia area. Close proximity to Fed employment centers in DC help drive up home values here. Unlike single homes, we noticed that supply of condos here exceeded demand. Maybe condo prices should come down to reflect the current market conditions, so we'll have a more balance market. We'll see what happens after Fed increase the interest rate one more time.
On neighboring City of Falls Church, however, where access to transportation still relatively easy. They have Metro bus or George (local buses). We found that you could still find single family homes in the upper-$400's range. Sure, it's not the McMansions that have more than 5K sq. ft. living space. They are much smaller homes in terms of square footage. When you look at the distance to DC, it is not so bad. The commute still tolerable.
Alexandria, the second most expensive area, still have townhomes for about the same price range, in the 400's range. It's a matter of living style. The choice is yours.
Hey, after all at least living here ain't that bad. Our local economy still growing. That means housing market should be okay, right. Jobs still there. Sure home sales dip a little bit. But, we've got cushion - the Fed.
* China's Oil Needs Are High on U.S. Agenda [NYT]
* Gross Regional Product Hit $246.8B in 2005 [Washington BizJournal]
* Builder's Confidence Hit Lowest Point Since 1996 [Inman News]
* 10 Major Bottlenecks In the Country
UPDATE: Drivers Curb Use as Gas Goes Up [USA Today]
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