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Paradise Island
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Discussion Starter #1 (Edited)
From the Minneapolis Star Tribune:

http://www.startribune.com/business/20629604.html?location_refer=$urlTrackSectionName

Latest must-have home feature: A short commute
In these days of $4-a-gallon gasoline, real estate agents see potential buyers turn their sights from the suburbs to the cities.

By JIM BUCHTA, Star Tribune

Last update: June 21, 2008 - 9:18 PM

When Mindy Myhre decided to move back to the Twin Cities from Denver, she assumed that she'd buy a house in the suburbs with a big yard and an attached garage. All that changed when she started thinking about how much time she'd spend commuting to work downtown -- and how much it would cost to fill the tank now that gas breached $4 a gallon.

"With gas prices on the rise, it confirmed my decision to stay downtown," said Myhre, who works at Globe University's new campus at the IDS Center in downtown Minneapolis. Myhre plans to buy a townhouse at Grant Park City Homes in Minneapolis' Elliot Park neighborhood near downtown, and she plans to walk and ride her bike to work, weather permitting.

High gas prices won't cause financial hardship for Myhre, but she sees no reason to waste money at the pump. "You're spending less money on gas, and you can spend it on other things," she said.

With no end in sight to gas price increases, it's an issue that a growing number of home buyers and sellers are paying attention to as they consider where to live -- even if it's too soon to tell just how many decisions are being motivated by $4-a-gallon gas.

It's a movement, some real estate agents say, that bodes well for city neighborhoods and communities that have easy access to public transportation, bike lanes and other commuter-friendly amenities -- and not so well for many of those bedroom communities that ring the metro area and cater to the increasingly besieged commuter.

Some say this could be the reversal of a trend, begun during the run-up in prices, of buyers trading distance for value.

"It's definitely on people's minds," said Patty Plourde, broker/owner of Exit Realty Imagine in Edina. "When dollars tighten up, consumers move closer to the city. When money frees up, people spread out."

Out for less windshield time

According to results of a Coldwell Banker poll released Wednesday, 96 percent of the 903 agents surveyed said that rising gas and oil prices were of concern to their clients and that 78 percent said those higher costs were increasing their desire for city living.

Susan Evans, for example, says that a grueling commute from her house in Newport to the public relations firm she owns in Minneapolis' Warehouse District has meant too much time in the car, but now that gas prices are on the rise, she and her husband, Erik Reisetter, are in the market.

"Both my husband and I are looking to reduce our commute time, save money on gas and live closer to where we both work," said Evans, who is president and CEO of Evans Larson Communications.

She's shopping for a townhouse or condo in Minneapolis or a first-ring suburb, but like others hoping to make the transition, she's discovering that it can cost more to get similar size.

In Minneapolis, for example, the median sale price last month was $205,587, according to the Minneapolis Area Association of Realtors. In Otsego, about 30 miles to the northwest, the median sale price was $181,266. Certainly, there are exceptions to the rule that comparable prices fall as you go farther, but agents say that higher gas prices have already made it difficult to get buyers to consider many bedroom communities built to attract value-conscious commuters.

Evans isn't deterred. She's willing to swap a smaller living space for fewer $50 fill-ups and less "windshield time." And that's why communities within easy access to other amenities are expected to be more appealing to many buyers.

In Bloomington, for example, the developers of Reflections at Bloomington Central Station are betting the success of the project on growing interest in public transportation.

"The building's adjacency to the LRT [light-rail transit] has been a part of why our site has continued to outperform the market," said Mark Fabel of McGough Development.

The past 10 months, the company has been selling six to 10 units a month. "There is no doubt the LRT was a huge impact on their buying decisions," he said.

The housing market is getting nicked by gas prices in other ways. Several agents say that there seems to be less activity at some open houses, particularly in far-out communities.

Christine Dufour Iverson says that agents from all over the metro area brought clients to tour her house in St. Paul's Macalester-Groveland neighborhood, which is convenient to both downtowns and popular bike commuter paths.

She said that most of the people who have looked at the house or their agents are from a second- or third-ring suburb. During showings earlier this month, only eight of the 17 agents who showed the house were from the nearby area. It was "an unexpected revelation," she said.

Jim Dattalo, a sales agent with Edina Realty in Plymouth, works with many Cargill Inc. employees relocating to the Twin Cities. It used to be that they were willing to live anywhere within 30 minutes to the company headquarters, but now they want a house within a 10-mile radius, he said.

"It's having an effect in all price ranges," Dattalo said. "It's not just entry-level buyers."

Plourde is touting the proximity of Minneapolis-St. Paul International Airport for a listed $799,000 house with lakeshore on 5 acres in Sunfish Lake, in northern Dakota County.

"I'm letting people know that this is close in and you get want you want, you get the space, the land and you're only 10 minutes away [from the airport]," she said.

Bite not big enough?

Not all buyers, however, are willing to sacrifice space for location, and that's why Tom Musil, chairman of the real estate school at the University of St. Thomas, says that gas prices aren't high enough to transform the market by themselves.

"I don't see an abandonment of the suburbs -- low land costs and the extra house they get offset the gas, that's how people adjust," he said. "I doubt that you'll see people make radical decisions. ... They'll bite the bullet and make other sacrifices elsewhere."

David Abele of Edina Realty agrees. He said that gas prices will have to hit $6 to $7 a gallon before it will have a more serious impact on the market.

Nonetheless, it's not just the pocketbook that matters. Fran Davis, a sales agent with Coldwell Banker Burnet who specializes in the downtown Minneapolis market, said many of her upper-bracket buyers are thinking about how they can reduce energy consumption.

"There's so much more concern about the environment that people pay attention to what the impact is, and not just the dollars," she said.

"I can name 10 people who made that choice."
 

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"The Ignorant Fool"
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With the average cost of owning and operating an automobile being approximately $10,000/year, being next to an LRT line and doing without a car would enable a person to get a $100,000 larger mortgage and come out even.
 

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I find it strange that people haven't in the past valued their time very highly. Yes now it is costing them more in real $$$s but in the past it has cost them time from their lives. Living close to work, close enough to walk, sure gives you so much more time which to me is worth everything.
 

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Finally! The winds are changing. Hopefully, the next decades bring more public transit and higher density to the U.S.
 

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Convenience to something is always nice. Some people might be close to their church, or to their kids' school, or to the grocery store, or to work. It's interesting that more people don't want to live closer to work, though. Most people that work work 5 days a week. People don't go to the grocery store or church 5 days a week, so it would make sense to live closer to work and drive a greater distance to go shopping or whatnot. You would think that people would want to live closest to the place or places that they go to the most.

I'm going to be the devil's advocate with these posts:

I find it strange that people haven't in the past valued their time very highly. Yes now it is costing them more in real $$$s but in the past it has cost them time from their lives. Living close to work, close enough to walk, sure gives you so much more time which to me is worth everything.
What you pay for in time is made up in monetary savings. All other things the same, property values generally tend to be lower the farther out you go in a metro area because less people want to live in those areas. It's just not as convenient. These people might commute an extra 30 minutes each way to work, but the lower property values allow people that live out there to get more for their money: a bigger house, that car that they've always wanted, a backyard pool, etc.

Absolutely. Nothing like a casual 15-minute walk to work, vs. what some people go through.
A 15 minute walk and a 15 minute drive take the same amount of time. What if it only takes you 10 minutes to drive to work? Then driving is a better use of your time.
 

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Professional
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i bought my house within a 12 minute walk to work...i can't imagine doing it any other way... and lets not forget that if you work in a city you have to worry about parking on top of everything else
 

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Globetrekker
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A 15 minute walk and a 15 minute drive take the same amount of time. What if it only takes you 10 minutes to drive to work? Then driving is a better use of your time.
You get more exercise walking to work than driving, nothing wrong with burning a few extra calories and taking in the fresh air. It takes me 2 minutes to drive to work but I prefer taking the 13 more minutes to walk. And I don't have to worry about not being able to find a parking spot. (Space is so limited at my workplace)
 

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Journeyman
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A 15 minute walk and a 15 minute drive take the same amount of time. What if it only takes you 10 minutes to drive to work? Then driving is a better use of your time.
Sure, if you don't value exercise, and you want to pay for parking, gas, etc. Also, dealing with the parking garage at each end would eliminate much of the time savings. And that's just the outer layer of that onion.
 

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This is a good thing because people are actually starting to look at logic now. Living near your work is easier! Duh. I couldn't imaging commuting for a long period of time. Living close enough to work is essential for me.

The benefits of commuting from a far distance are outweighed by the negatives and higher gas prices just are the tip of the iceberg.
 

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Nonhyphenated-American
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This has been written about in MANY publications over the past few months and yes, it will be a growing trend. The BIG question is how big will the battles be when this irresistible market force meets the immovable local zoning law unit density limit object. They will be fun to watch.

Mike
 

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"Some people might be close to their church, or to their kids' school, or to the grocery store, or to work." Well I'd say by living in an urban environment you get to live close to all of these. My last 2 jobs were 7 minute walks, the grocery store is 2 minutes (across the street), there many churches within a 10 minute walk and their are public schools within 10 minutes as well. So living urban isn't just about being closer to work its about being closer to everything.

So it isn't just time spent getting to work it is time spent driving versus living.
 

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"Some people might be close to their church, or to their kids' school, or to the grocery store, or to work." Well I'd say by living in an urban environment you get to live close to all of these. My last 2 jobs were 7 minute walks, the grocery store is 2 minutes (across the street), there many churches within a 10 minute walk and their are public schools within 10 minutes as well. So living urban isn't just about being closer to work its about being closer to everything.

So it isn't just time spent getting to work it is time spent driving versus living.
 
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