The price of gas is affecting almost every industry and it is impacting the lives of Americans in more ways that one. From the price of groceries, to the price of a checked bag on an airline all items of our day to day lives seem to be going up. The real estate industry is no exception. The $4 +/gallon of gas price has altered the behavior of the real estate market in unforeseen ways.
It is changing the way in which brokers market properties, how brokerages charge clients, how real estate agents show properties, how managers budget improvements, how tenants decide where to locate, how local governments are approaching development and transportation issues, how consumers decide where to spend money, how landlords calculate their expense pass-throughs, and how lenders fund construction projects and acquisitions.
It is also impacting the new construction market. Construction costs are skyrocketing and builders are using energy efficient and “green” features more and more.
LOCATION, LOCATION, LOCATION
The ultimate motto of real estate has buyers deciding on location from a different point of view. Buyers are now looking for homes nearby or next to bus stops or other public transportation and closer to work. As the price of gas continues to rise, the affordability differential of living in the suburbs vs living in the city is diminished, causing a higher demand –and therefore increase in price- for homes near city centers.
THE CHANGE IN BROKER-CLIENT RELATIONSHIPS
The face to face meeting between a broker and his client is often being postponed until the day of property showings, having the initial interview to discuss the kind of home a buyer would like and the must-haves and would-likes of a home, over the phone.
Buyers are using the internet and other resources, such as brokers, attorneys, accountants, etc. to gather more information about a property before making a site visit.
Agents are now being much more judicious about showing property in certain areas, they are doing a better job of prequalification before getting in the car with clients. Some residential agents will not tour a buyer without an exclusive representation agreement.
