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I have a theory that the price of gas will cause urbanization. I live downtown and work downtown, so I can even walk to work if I want to. Its saving me a lot of money. Saving money is good, and people like money. So therefore, with that as my understanding of economics, I reason that other people will pay a little more now to move downtown as opposed to staying 20 miles away, commuting 200 miles a week.
200 miles, 20 MPG, gas $3.50/gallon = $35/week.
$140/month on gas. Conservatively, I think.
$140/month leveraged into real estate at 6% interest on a 30 year mortgage = an extra $23,350 of purchase price to get a place you can walk to work from.
Lets get a bit more pessimistic:
200 miles, 16 MPG, gas $4.50/gallon = $56.25week.
$225/month on gas.
$225 leveraged into real estate at 6% on a 30 year mortgage = $37,528 into real estate.
Throw in the hassle of driving, the wear and tear on the car, the additional insurance premium from living more that 10 miles from your job, and I think people will be moving into cities. That, or pushing for high-speed trains. Which will never happen.
Just my rambling thoughts for the day.
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