Acton Real Estate Blog – Oil Prices on the rise

Housing in the News

Victor Normand
Published: March 2011

Ever wish you could pick up your house and move it closer to work?  Bad enough the commute is a grind, now the cost of gasoline is really starting to hurt as well.  One economist predicted that consumers in large numbers will only begin to change their driving habits when it routinely costs them $100 to fill the tank of the average car, well, it won’t be long before we are there.

And this time the run up on the price of a gallon of gas looks like it’s no temporary event; no price fixing by an oil cartel; no disruption of shipping channels, just your basic supply and demand at work as the economy improves the demand for oil rises.   My last home heating oil fill-up cost me $1.10 more per gallon than I paid last April and over $2.00 more than I paid in 2000.  This time around, the Chinese are major new players in the game as their economy continues to grow and a vast new group of middle class consumers emerges who will be driving more cars and living in bigger houses you can be sure.

So, if you are in the market for a home you need to consider all aspects of high cost oil in your decision, not just how far you need to travel to get to work.  You need to consider how big that house needs to be and how efficient its heating and cooling systems are.  You need to consider how much mortgage you can afford recognizing that household budgets are strained by the high cost of oil in many ways.  Essentially, anything you buy that needs to be transported, which is everything you buy, will cost more.  Not to mention if what you buy is made with petroleum or requires something that uses petroleum to make or grow it, that will also cost more as well in the months ahead.

Another economist, also said that for all the things we do with oil, burning it in cars and homes is the last thing we should be doing with the stuff.  We will eventually find viable alternative sources of energy, but in the mean time get ready to endure some pain in the wallet and you might want to consider turning that front lawn into a vegetable garden.