I was fortunate enough to hear local economist Al Muller's latest update on the Pensacola Bay Area housing market at a Coldwell Banker United Realtorsmeeting at Pensacola Junior College yesterday. As always with Al, I had several "Ah Ha" moments, but one of my big take-aways was his rundown on the "Demand Factors" that impact housing.
Al pointed out that - get this - the drop in gas prices from $4 a gallon to $3 a gallon is the equivalent of the recently initiated $150 billion economic stimulus package where checks were sent to all American households this spring. The difference is, the economic stimulus package provided by the drop in gasoline prices is not a one time stimulus, but and ongoing MONTHLY stimulus. When Americans found themselves putting an extra $200 a month into their gas tanks something had to give. Unfortunately for some, this took a toll on their ability to pay their mortgage.
Some of the other demand factors for housing that Al noted have moved - or are moving - in a positive direction are food and energy prices, high property taxes, the credit crunch and declining home prices. As housing prices decline, the federal government takes action designed to get credit flowing again and local jurisdictions come under increased pressure to lower property taxes people begin to see opportunities for home ownership once again. And guess what . . . with so many potential buyers sitting on the sidelines for the past two years there is definitely a pent up demand for home purchases.
Let's hope buyers agree and think the low gas prices are here to stay and houses start moving again. I know in your area, it is a lot worse than we are, but I still hope the change is coming.
Hey Todd - But as I am out visiting on the west coast now, I can tell you our gas prices are MUCH lower! Try $2.69 a gallon. It amazes me how different the gas prices can be from location to location.
I think the gas prices are down because of the upcoming election. But it definitely helps for now.