I was just responding to your comment that seemed to imply (perhaps inadvertently) that it was necessary to live near downtown in order to utilize the nearby amenities that you referenced. My point was that you *don’t* in fact need to live nearby downtown in order to utilize those amenities and my own example was used to demonstrate that.

“On a semi-related note… those living closer to Seattle can use Amazon’s wonderful new service: AmazonFresh (www.amazonfresh.com). Groceries, fresh produce, meats, dairy, and frozen goods all delivered to your doorstep. Moreover, there is free shipping on orders greater that $25. That solves the shopping in November rainstorm problems…”

Yes, I used that service while living in Madrona. Not you, the neighborhood. :)

I liked it a lot, especially the part where you can order late at night and get all the deliveries by 6am. I’m sure that over the years as it expands and becomes more popular, it will start up in other areas too.

Brief research indicates that they didn’t deliver to West Seattle, until they started to. Oh, and I just went on their website and found that they deliver to my old address in Issaquah! They don’t deliver to me yet (North Sammamish), but I’ll let you know when they start to. It seems that in some outer neighborhoods (Redmond, Issaquah, South Sammamish) they have a requirement to be a “prime” member which amounts to a $80 annual fee. I wonder if this is essentially a fuel surcharge due to the distance from the Bellevue fulfillment center they have. Yes, Bellevue.

On a semi-related note… those living closer to Seattle can use Amazon’s wonderful new service: AmazonFresh (www.amazonfresh.com). Groceries, fresh produce, meats, dairy, and frozen goods all delivered to your doorstep. Moreover, there is free shipping on orders greater that $25. That solves the shopping in November rainstorm problems…

I completely agree. Some people who work and live in Seattle seem to think that everything is in Seattle.

For example:

Madrona said: “As someone else mentioned above, the distance to basically everything is reduced when living closer to DT. I can go to multiple grocery stores, work, shopping centers, Lowes/Home Depot (a requirement if you own), restaurants, theaters, and Costco all within 4 miles of my house.”

This distance to “everything” is reduced when living to downtown. Maybe, but downtown isn’t the only place in the area where this is so. I live in Sammamish, and every single one of those amenities is within 1-6 miles of my house. OK, so I can’t walk anywhere without a 20 minute walk, but I don’t like walking along sidewalks next to cars anyway – I’ll save my walking for the backcountry. I never understood what was so appealing about walking to Safeways in the rain in November so I could drag back a few bags of groceries. I rarely did it when I lived on Capital hill because it sucked so much.

My Safeway is about a mile and a half away, and takes maybe 5 minutes to get to. In the process, my PNWSUV (Subaru) gets about 23 MPG for that kind of driving. OMG – that cost me 60 cents! Let’s call it a buck. A BUCK to get to the store and back. Oh no!!! I’ll have to buy Safeways gruel instead of the name brand gruel! HORROR!

Yes, Seattle has a lot of jobs. 41% of the jobs in King County, apparently. But head out of downtown for a second and you’ll see jobs, restaurants, shops, and, yes even Costco! (the headquarters in fact).

Being near the city has many advantages, like a much wider selection of restaurants and a generally higher proportion/density of jobs. However, that doesn’t mean there are zero jobs, restaurants, or anything else once you step outside of the Seattle Bubble. (pun intended)

I think what changes with high gas prices is the psychology, values, and tolerances of renters and homeowners alike. Having the ability to shed a car more easily and reduce exposure to future gas prices and energy prices is appealing and when combined together becomes very attractive. Living away from your job and/or in the suburbs requires more driving and you cannot as easily shed a car and in general, you are in a bigger home. Being tied to potentially high fuel and energy costs is scary for a lot of people.

I’d agree that much of the market is moved by perception, though it’s bounded by some hard numbers (i.e. no matter what you think you can afford, the banks will only lend you so much .. [ that's assuming you don't look at 2001 -> 2007] )

Shedding a car would be nice no matter where you live (assuming no major quality of life hit.)… of course that assumes that both car users have their jobs close to each other.

See Americans are funny it is all about convenience and easy compared to cost. If someone can walk 15 minutes or 20 minutes to the store but if they can drive in 2 or 3 minutes and know they won’t have to pay for parking most drive. If gas gets to be $6 you will see more people walking in the burbs or more likely biking.

Let’s think why is Fast Food so popular in the US and not so much in Europe (given it is starting to gain traction) it certainly is not that the food is better but it is because it is not too bad, fairly cheap, and convenient — fast. Ad in the fact in the US you have to add the 20% for tipping at an actual restaurant and in Europe you don’t — basically round up. See conveneince and cost. And we all know at a certain point COST trumps everything — think about California and people commuting for an hour or more — fairly common so they can buy a house some where.

If an equal house costs 1/3 in Issaquah versus Magnolia you would have to be a moron to buy in Magnolia — people will talk about how the house will go up in Mag more in the future — but those same people should think about the old saying DON’T put all your eggs in one basket. Investment is about DIVESIFYING.

Hey Harley, “Living away from your job and/or in the suburbs requires more driving and you cannot as easily shed a car and in general, you are in a bigger home. ” Again where are they Boeing plants located, how about Microsofts headquaters/ main campus. This will really blow you away — you can have a smaller house on the eastside also — it is not a requirement to have a McMansion to live across the lake.

You guys really need to get out of Seattle — DT — and see some other parts of the world — I mean far away places like North Bend or Issaquah.

I agree with everything you say.

Admittedly, I have trouble staying within the constraints of the argument. I look at any issue and see hundreds of deterministic factors. I feel that the conversation and the topics are more information rich and most importantly helpful when considering multiple factors.

I think what changes with high gas prices is the psychology, values, and tolerances of renters and homeowners alike. Having the ability to shed a car more easily and reduce exposure to future gas prices and energy prices is appealing and when combined together becomes very attractive. Living away from your job and/or in the suburbs requires more driving and you cannot as easily shed a car and in general, you are in a bigger home. Being tied to potentially high fuel and energy costs is scary for a lot of people.

I do concede that gas prices solely are not a factor.

I think I may have seen that site making the rounds on a few other blogs a bit ago..

I guess I still feel like your savings, while real, don’t change with gas prices. I.e. if gas prices were low, and I moved to a urban center, using your assumptions I could have saved the

Other Money Saving Options For Urbanites:
Because you live close in you may choose to just have one car which saves you:

$6618.20/year car payments ($28,000 5-yr loan at 6.78%)
$1500/year Insurance+

in fact, if gas was free, I’d still save that money…

Why does that matter? Only because the silly Newspaper articles suggest that people will now put a premium on in-town housing due to gas prices, which doesn’t wash, since the only thing that’s changed are the number’s listed above. (go ahead and double them.. and gas prices still arn’t enough in most cases to make this pan out..)

Of course, that assumes that people can do basic math..

I’m pretty sure this post was really just pointing out the lack of research that some newspaper articles have done.. but the comments seemed to wander out into the weeds.. :)

I do agree that gas prices alone will not force people to purchase a home closer in. I think the media does over simplify the issue.

I do think that it will be an influencing factor. If gas prices increase further, it will play more of a role. My critique of Tim’s assumptions, with the exception of heating costs, did target gasoline-related costs. Not needing two cars is a great advantage economically. He assumed only one car which I felt was off. In addition, he did not account for driving other than work.

I agree that some people are looking for a “specific house”. In my own experiences I looked for what I can afford and had an open mind to what that would get me… single family, condo, townhouse. Every home has pros and trade-offs. In general I think Americans go in looking for homes in a price range and see what they can get.

Off the subject here is a great web site that scores the walk-ability of your home:
http:///www.walkscore.com

I would also argue that the closer to the city center, less households will have multiple vehicles. My wife and I live < 2 miles from DT, and we share one car successfully. There are two reasons we do this: closeness to amenities (shopping, work, etc), and where the hell would we keep another car?

As someone else mentioned above, the distance to basically everything is reduced when living closer to DT. I can go to multiple grocery stores, work, shopping centers, Lowes/Home Depot (a requirement if you own), restaurants, theaters, and Costco all within 4 miles of my house.

I actually don’t have any problem with you numbers, but I think you might have missed the point of this post..

as Tim said above:

The reason I focused only on gas prices in this post is that gas prices have been the singular focus of news articles such as the ones I linked to. The point of the post is that gas prices are not likely by themselves to drive migration trends or hold up prices.

In other words. I think a person could save more then just the cost of gas. However the insurance savings, cost of removing a car, car payments, etc.. are the same as they were before gas prices changed..

I think your indignation is right on, that’s why the newspaper articles that claim gas prices alone will sustain or push up in town prices are silly. There are reasons to move in town, but a small change is gas prices isn’t going to push most people over that edge.

( Also – while I don’t know about anyone else, I know my wife and I are looking for a specific kind / type of house.. we wouldn’t be upping the cost just because we could afford more…. We’d much rather lower our payments and split the new “income” betweens savings and fun money…..)

In the first place I didn’t name 3 companies. What figures do you have to prove that most employers don’t supply vouchers? If you did a survey of the major high tech employers in the area you might find that they do support these transportation incentives, they receive a tax-break. Did you actually read my link.

Second, I didn’t quote statistical outliers. Your the one that quoted average price of a car for this year. Did you happen to notice the sale of new cars are tanking?

Your final comment shows your lack of maturity in defending your arguments.

$28,000 is the average MSRP price for cars in 2008.

LUC, the reason I do not respond to most of your statements is because you consistently cite the statistical out-liers as if they are the norm. You often make singular baseless points which do not merit a response.

Most employers do not provide vouchers. You name three companies out of the three thousand and speak as if every company is doing it. You then do not consider how many of the employees actually use the system. The best part about it is that you actually prove my point in that living close in allows you to take mass transit.

I used The Tim’s own figures to make my argument and you tell me that my information is wrong. I think that it is clear that you have a crush on The Tim and will do or say anything to defend The Tim.

You only addressed one part of my response. In fact, you skewed your numbers with a 28K car purchase.

Everything is based on assumptions and the data I provided was from Tim’s own example.

I am pretty sure if I say black you will definitely say white.

That is the biggest load of crap I have ever heard. I just sold a 4runner that had 175,000 miles on it when I bought it, and I drove it for 5 more years and it never had a single leak, or a repair that was even close to a 1/4 of the bluebook which was only $5000 when I purchased it. I put almost 60,000 miles on it, treated it like crap and still sold it for nearly half of what I paid.

You need to include additional assumptions in calculation:

1) Some companies (e.g., Amgen) in Seattle actually pay for employees bus and ferry passes. In addition, they provide vouches for gas, AAA and Brown Bear car wash for employees who use alternate modes of transportation. So estimates for gas, car maintenance and public transportation need to be modified. See link below see link below for reference:

http://transit.metrokc.gov/cs/employer/empcommute.html

2) Tim’s argument is based on data not assumptions. Your argument is based on assumptions, not data.

I agree that gas prices are not the sole factor when buying a house, but they can be compelling.

I believe your assumptions are off for the following reasons:

Americans will buy as much as they can afford. It seems more accurate to compare the amount of square footage $400,000 will buy in Marysville and Shoreline, then to think an American would actually spend $100,000 less.

Let’s assume you buy a home in Shoreline for $400,000 but it is 25% smaller, but you reduce your energy expenses by 25% (assuming everything is equal). I am guessing $2000/year so you save $500/year in energy savings with a smaller house.

Your calculations assumes only one car, when most home owners have two. Based on your example this would be $4320/year in fuel savings ($180/month X 2 Cars).

This would save the family $4820/year in gas and energy costs.

Other Money Saving Options For Urbanites:
Because you live close in you may choose to just have one car which saves you:

$6618.20/year car payments ($28,000 5-yr loan at 6.78%)
$1500/year Insurance+
$3360 for gas/year.
= $11,478/year
- $720 Bus Pass
= Total Savings $10,758/car/year

Looking at it from this perspective changes things drastically. The Urbanite has more cost saving options. Based on your assumptions and my modifications this will save almost $4,820/year. If the urbanites take the extra step and eliminate one car now they are saving over $15,000/year not including savings on car maintenance.

I see the possibility of some interesting polls suggested by this thread, such as;

How many readers work downtown Seattle?

How far is your daily commute?

Would freeway accessible Dunkin Donuts and Starbucks outlets improve the commuting “experience”?

People who pay $3000 to rent a condo or apartment aren’t interested in renting a whole house in a quieter neighborhood. Craigslist is actually filled with such high-end rentals (though $3000 tends toward the high end of high end in Seattle). Here’s an example – http://seattle.craigslist.org/see/apa/731491622.html

And no, they are not stupid people. They are people who make a great deal of money and can afford to pay for luxury and location and will do so.

http://www.nytimes.com/2008/06/25/business/25exurbs.html?_r=1&hp&oref=slogin

“Juanita Johnson and her husband, both retired Denver schoolteachers, moved here last August, after three decades in the city and a few years in the mountains. They bought a four-bedroom house for $415,000.

Last winter, they spent $3,000 just on propane to heat the place, she said. Suddenly, this seemed like a place to flee.

“We’d sell if we could, but we’d lose our shirt,” Ms. Johnson said. On a recent walk, she counted 15 sale signs. A similar home nearby is listed below $400,000.

“I was so glad to get out of the city, the pollution the traffic, the crime,” she said. Now, the suburbs seem mean. “I wouldn’t do this again.””

Your statement holds true for a perpetual trend of decline. Seattle as a % of total King County population since 1910 has been waning. The last era of major urban growth relative to the county was in the wake of the Gold Rush of the late 1890s (and the Panic of 1893).

1890 66.9%
1900 73.3%
1910 83.3%
1920 81%
1930 78.9%
1940 72.9%
1950 63.8%
1960 59.6%
1970 45.9%
1980 38.9%
1990 34.3%
2000 32.4%

You would have to breakdown the 41% by income to determine who would be able to afford to live in Seattle. But I agree with Tim, gas prices are not likely by themselves to drive migration trends or hold up prices.

I agree that close-in neighborhoods have more value than those further out (though certainly not for everyone). As I said, I put a high value on my time, and would never consider living much more than 30 minutes from work (buy or rent). I also agree that there is a lot more to the calculation than gas prices alone.

The reason I focused only on gas prices in this post is that gas prices have been the singular focus of news articles such as the ones I linked to. The point of the post is that gas prices are not likely by themselves to drive migration trends or hold up prices.

Ask yourself: haven’t we had high gas prices once or twice since 1980? did things really change?

Year| %Jobs| %Pop| Ratio
1980| 37%| 22%| 1.70
1990| 33%| 19%| 1.73
2000| 31%| 17%| 1.78
2006| 29%| 17%| 1.75

So 33% of the people, 41% of the jobs. That would definitely indicate that there is room for more inward movement.

Amazing! Seattle only has 41% of the jobs in King County and it’s by far the biggest city in the county and the state as a whole. I’m amazed that’s it’s not more than that.

Looking at that another way, it’s true to say that OVER HALF the jobs in King Country are not in Seattle! Insane in the membrane!

Seattle has 470,698 of the 1,125,197 jobs in King County (2006 Data). “Downtown” might not be the job core, but Seattle as a whole accounts for 41% of the jobs in King County.

Why do you think there are all those traffic jams coming into Seattle every morning and leaving every night?

http://www.seattle.gov/oir/datasheet/economy.htm

I used to commute from Seattle to Redmond and waste 2+ hours a day (and my clutch) sitting in stop-and-go. Now I live in Fremont and commute to downtown, often carpooling or taking the bus (and driving as well). Now it takes 15min each way. I have a 12 mo old daughter and can spend an extra 1-1.5 hours with her in the evening. That’s worth a lot to me.

I’ve put less than 2000 miles on my car this year.

Living and working in the city is worth a lot to me, more than any gas savings. I don’t even think about the price of gas.

Also (and I am NOT an environmentalist) they tell me it’s better for the “environment”

Greg
Seattle

Oh, wait you can’t do that on a 21st century car! Maybe the computer will dial up the factory and they will download some software to rust up the bolts on you ;-) They don’t want you touching the new cars, and you can’t do much on em anyway.

Actually, maybe I do agree – don’t get 8-10 year old cars; get something 15-20 y/o and you will be happier.

Agreed, but then, this has nothing to do with the increase in gas prices lately. I think that there is a point at which, between the time savings, the decrease in stress (due almost soley to the fact that modern drivers don’t understand the concept of the “passing lane”, which is every lane but the right one), the possibility of getting rid of one of the vehicles completely, and, NOW, maybe $100 or $200 savings in fuel per month, the decision to live closer gets made.

I have heard all the pink pony comments I need to hear, but I will say that one thing Seattle has, is that almost all real neighborhoods, meaning not gated or non-gated McMansion subdivisions, have commercial businesses very close to housing. I have been around to many cities, and this is NOT what you see everywhere. Go to Atlanta and see what I mean. Whether you are in Shoreline, or South Park, or Queen Anne, there is usually a street with a grocery store, drug store, movie rental place, bank, etc. within easy walking or biking distance. This is absolutely not so within the new type of neighborhoods. Walking just sucks there unless you are a mall-walker type, walking to nowhere. The streets are made curvy on purpose, there is no grid, so the quickest distance between 2 points is through many peoples backyards – bring your pepper spray for the Rottweilers, they love it.

So, I don’t agree with Tim totally, I think the gas price may be the tipping point for many people. However, of course it depends on where the jobs are.

wgucd – That is a good point. The assumption in these type discussions seems to be that “everyone” works in downtown Seattle. If most workers do commute to downtown Seattle, I can see where increasing gas prices might have some limited effect on home price trends relative to downtown proximity. However, how accurate is the assumption that the majority of workers in the Seattle region commute daily to downtown?

I live in Maple Leaf. Lets say I am 20 minutes one way closer to work than if I lived in Marysville. That’s 40 minutes a day – no big deal right? That’s 40 more minutes a day I can spend with my 2 year old son. He goes to bed around 7:30 and we get home around 5:00′ish. During the week that 40 minutes extra/day translates to about 3 hours 20 minutes extra with him – and approximate 15% increase in the amount of time I can spend with him/week.

Tim – how would that figure into your calculations?

Not being in a car has value.

Dave

$5k/yr cost of having a cheapish car (according to edmunds true cost to own) gives you $415 per month, which at 30 fixed at low rates is about $70k.

plus, theoretically, money put in a house is at least partially an investment whereas money put in a car is an expense.

if you assume half of the money put into a house is investment and half is expense, maybe it’d make financial sense to pay an extra 140k to live close enough to be able to get rid of 1 car.

this roughly works for renting location analysis, too. except that all money spent on rent is obviously an expense.

People are taking the rise in gas prices too seriously.

Your post is right on

Also, The newspapers are also going overboard on the reporting of gas prices because thats what they do

Bingo. Higher energy costs reduce disposable income, and thus affordability, for everyone. But the loss in disposable income is lower for those living in the central areas. So, higher energy costs will exert downward pressure on house prices everywhere, but more so in the outlying areas.

If you can’t afford an extra $2K/yr in gas, you can’t afford to move to a more expensive area.

Right, because when I go to Issaquah, the 200 feet elevation gives me severe headaches and nosebleeds! :)

Issaquah is colder in the winter because it’s less influenced by the water, and not so much because of the tiny elevation increase from sea level.

Given that most houses in Issaquah are much newer than most houses in Seattle, I would be willing to bet that the average Issaquah house would cost less to heat than the average Seattle house. Even though it’s likely larger, the more efficient heating system, insulation, and sealing will more than make up for the size increase and slight temperature difference.