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Gas Prices and
Real Estate
Falling gas prices can shorten the time it takes a house to sell and can increase the selling price,
according to results from an ongoing longitudinal study by Florida Atlantic University and Longwood University. Using data from central Virginia and spanning over 10 years of gas price changes and housing transactions, researchers found statistical evidence to indicate that for every $1
per gallon decrease in gasoline price, average time to sell a property decreases by 25 days. In addition, for every $1 per gallon decrease in gasoline prices the average selling price rises by 2.4
percent, which amounts to roughly $4,000 per sold property in the study.
The good news from the seller's perspective does not end there. A $1 decrease is also
shown to increase a seller's chances of selling and closing by roughly 20 percent. "In the event of
a forced sale, these odds are very welcome news for a seller who might already own a second
property and must close," explained Ken Johnson, Ph.D., a real estate economist and an associate dean of graduate programs and professor in FAU's College of Business.
Based on these findings, the immediate future looks bright for home sellers. Gas
prices are down nearly $1 from where they were a year ago, and prices this
summer are expected to be the lowest they've been since 2009, "due to stabilizing crude oil costs and as refineries complete seasonal maintenance," according
to the American Automobile Association.
Source: PR Newswire