“Home is where the heart is,” but the location of that heart appears to be changing. U.S. homeowners have had a love affair with the suburbs since the late 1940’s when troops returned from WWII. Single family homes with big yards and lawns have been all the rage for over a half century. Now, the pendulum is starting to swing in the other direction. More people are choosing to live closer to where they work, shop and play. Why? I believe the two biggest reasons are the growing concern for the planet and the current economic situation.
What do subdivisions have to do with the rising green consciousness and the economy? Well, everything. Let’s start with one of the most obvious answers; commuting. According to DowntownBoise.org (thank you @unequivocal208), over 36,000 employees work downtown every day. As of 2003 (Capital City Development Corp.), there were only 2000 dwelling units downtown. The rest of the workforce was commuting from outside the downtown area. When gas hit $4 per gallon, commuters took notice. Even with the lower cost of fuel today, the cost of commuting really adds up. Here is an example:
Homeowner A lives 20 miles from work. He bought a home for $250,000. He earns $50,000 per year, drives a $20,000 car that gets 20 mpg. His mortgage is at 5% and he pays $2.90 per gallon for gas.
Homeowner B lives 2 miles from work. She paid $300,000 for her home. All other factors are identical to Homeowner A. They each make 22 commutes to work per month.
Here is the financial breakdown:
Monthly Payment on House B: $1,342.05
Loan Amount: $250,000
Monthly Fuel Cost: $127.60
Monthly Maintenance Cost: $211.20
Monthly Time Cost: $488.89
Total Monthly Cost: $2,169.74
Monthly Payment on House A: $1,610.46
Loan Amount: $300,000
Monthly Fuel Cost: $12.76
Monthly Maintenance Cost: $21.12
Monthly Time Cost: $48.89
Total Monthly Cost: $1,693.23
You can fill in your own information here.
When you take this information and combine it with the fact that Homeowner A is adding approximately 900 lbs of CO2 emissions per month compared to Homeowner B’s 82 lbs just from driving to work, the picture becomes even clearer. Commuting takes its toll on the planet as well as the wallet. It is not necessarily less expensive to move farther away from work to buy in a less expensive area.
What does this mean for Boise real estate? The popularity of Boise’s core neighborhoods (those in close proximity to downtown) will keep rising. Homes in these areas will continue to be more expensive and will hold their value better than those that are further away from amenities. People will keep remodeling and renovating the older, close-in neighborhoods and we will see more people choosing to live in downtown condos.