Friday, July 11, 2008

Some Dallas-area residents moving closer to work to save money on gas

The old real estate maxim "location, location, location" couldn't be more apt during these days of $4 gasoline.

Some Dallas-area residents are already making a housing move to cut down on fuel costs.

Ben Patterson and his partner, Rick Ortiz, recently moved from an apartment near White Rock Lake to a central business district condo.

"Rick works downtown, so now he only has to walk about two blocks," Mr. Patterson said. "As a result, we pretty much only drive one vehicle these days."

And Mr. Patterson said his daily commute to Arlington was significantly shortened.

"With gas prices what they are, I'm not interested in having a 30-mile commute to work," he said.

The downtown transplants walk to do their grocery shopping at the Urban Market on Jackson Street and can dine at nearby restaurants.

Real estate agents say they are seeing a steady stream of potential buyers shopping for housing options in central Dallas neighborhoods – including downtown.

"I absolutely believe the cost of gas will have a substantial positive impact on in-town housing," said Dallas residential agent Jeff Updike.

But the shift may take a bit for some homeowners.

"Selling, buying and moving is a big financial decision, so people won't have the knee-jerk reaction many have had in changing to a more fuel-efficient car," said Mr. Updike, who is with Re/Max Urban.

"Now the investigation process has begun, and we have seen a tremendous increase in calls regarding the cost of urban living, homeowners associations, DART rail stations, etc."

New downtown resident James Howard just moved with his fiancée into the DP&L Lofts building, which ended his daily commute from Bedford.

"I've been in the 'burbs for many years," Mr. Howard said. "I was looking forward to the move. We saw it as an opportunity too good to pass up."

Mr. Howard walks to his job at the Bureau of Labor Statistics.

"It's a grand total of four blocks," he said. "That means quite a bit of savings" in weekly gasoline expense.

Before, his round-trip commute was 45 miles.

"Where you live in relation to where you work is definitely going to be higher on the list of things people need to consider," Mr. Howard said.

Homebuilders, who have traditionally gone to the suburban edge to find cheaper building sites, may also have to rethink their strategy.

"We're already seeing some impact" of the higher commuting costs, said Ted Wilson of Dallas-based housing analyst Residential Strategies Inc.

"I talk to builders in the outer ring locations who've seen a significant drop in their traffic," he said.

"When you combine the longer commute times with the higher gasoline prices, you will see a lot more interest in closer-in locations," Mr. Wilson said.

Homebuyers may opt to trade the higher purchase price of a close-in home for the lower monthly gasoline expense and still save on time spent in the car each day.

Major homebuilders are voicing concerns about the impact the record gasoline costs will have on their inventories.

At a recent conference with analysts, an executive with Dallas-based Centex Corp. said that close-in homes are more valuable now than far-flung unsold homes owned by the builder.

"In this market with $4 gas, if you're sitting on standing inventory in fringe areas, that's probably more problematic than if you're sitting on inventory in in-fill areas," Centex senior vice president Larry Angelilli said.

Even homebuyers who don't opt for a house near their job may choose to move to save on monthly energy costs.

Dallas accounting executive Harold Gaar and his wife, Marilee, are trading their North Dallas house for a close-in townhome that's about half the size.

"Our kids are grown," said Mr. Gaar, a former executive with The Dallas Morning News. "Do we need a 3,900-square-foot home anymore?

"Once you get rid of the emotional issues, the answer is no," he said. "And I believe that energy costs are going to continue to go up."

The Gaars worked with Dallas-based David Griffin Realtors to find their new Cole Avenue townhouse.

After the move, Mr. Gaar will still have to commute to his job on LBJ Freeway. But he expects the couple will do more walking in their new neighborhood near Knox Street.

"I have a car that's larger, and I'm going to sell it," he said. "I've ordered a Mini Cooper.

"It's the wave of the future if you believe what we are seeing in energy prices is not a spike but a long-term trend," he said. "We will start looking at housing differently."

By Steve Brown