Why gas prices could influence the idea of living in the Valley
With gasoline prices at record levels and showing no sign of tapering off, the cost of living in suburbs like Snoqualmie and North Bend is starting to take on a new tone.
Whether or not that will keep those who work in Seattle from locating in the Valley, however, is a tough question, primarily due to a lack of hard data.
In a series of interviews with local realtors, anecdotal evidence seems to indicate the high cost of the commute is starting to take a toll on real estate prices, but they also insist that there are factors involved that keep Snoqualmie Valley residents willing to pay the extra cost of the commute.
Economists, however, say people who once followed the strategy that homes in outlying communities are cheaper than in metropolitan areas – known as “drive until you qualify” – are now being forced to rethink the cost of that decision.
Paul Bonneau, a Realtor in North Bend, said he believes the cost of the commute is being felt in the suburban real estate market.
“I don’t have any hard facts to back it up, but it’s my opinion that it is happening,” Bonneau said.
Bonneau said that in some cases sellers are asking less for their homes, but insisted that could not be directly attributed to a desire to relocate simply because of the high costs of commuting to and from work.
David Cook, another North Bend Realtor who also sits on the North Bend City Council, said while “there may be some of that going on,” other aspects of living in the suburbs will insulate area homeowners.
“It’s impossible to look at it statistically,” Cook said, “but the Snoqualmie Valley is so desired as a lifestyle that people have chosen to live here.”
Cook also noted that “not everyone commutes,” and for those that do, the drive down I-90, what Cook termed “the luxury highway,” is the easiest of all area thoroughfares to navigate.
One group, the Center for Neighborhood Technology, allows commuters to determine how much additional money they are paying for the privilege of living in the suburbs, compared to eight years ago.
According to the group’s website, which can be found at http//htaindex.cnt.org/, residents of North Bend and Snoqualmie paid, on average, about $1,600 a year for fuel in 2000 and upwards of $3,800 a year in 2008, or as much as 28 percent of their total annual income.
When combined with the cost of housing, residents of the two communities are paying between 45 and 60 percent of their total incomes for housing and transportation costs alone.
The results have led many to conclude that a move closer to work has become the only economical option.
Joe Cortright, an economist with Portland, Ore.-based Impresa, authored a study that has sparked a number of recent media accounts.
Cortright’s study, “Driven to the Brink,” argues that low, stable gasoline prices in the 1990s fueled the housing bubble, and claims that fuel prices in 2004 were actually lower, in inflation-adjusted terms, than they were in 1990.
Cortright’s report can be found at ceosforcities.org.
“We’ve seen a lot of folks who, by stretching their means to get into houses, took on the longer commutes,” Cortright said, “and now they’re the ones who are taking the biggest hits.”
Cortright said such homeowners are now finding themselves victims of “a double whammy” – forced to pay the price of a long drive to and from work and with a home that has fallen in market value, largely because buyers with similar portfolios are no longer willing to buy into the longer drive.
“Their houses now look a lot less attractive,” Cortright said.
Glenn E. Crellin, director of the Washington Center for Real Estate Research at Washington State University said there has been an ongoing trend away from the suburbs for some time.
High gasoline prices, Crellin said, “are probably reinforcing some trends we were seeing even before the prices started to climb.”
“There’s been a trend of ‘back to the city’ for some time now,” Crellin said, “as evidenced by the high-end condo activity in the bigger cities.”
Seattle, however, has to be viewed as a special case, Crellin said.
“Seattle has a very high-technology aspect to it,” he said, “which gives some households the opportunity to live a bit more distant from their workplaces.”
Microsoft employees, for example, may have the ability to telecommute, Crellin said, which all but eliminates the cost of the commute factor.
“I don’t have any hard facts, but it is one of the perceptions that is out there,” Crellin said.
Snoqualmie Mayor Matt Larson said such results are just another reason why his city has strived to embrace many of the concepts of new urbanism – living, working and shopping in close proximity – in areas such as Snoqualmie Ridge.
“The Ridge is very intentional in its design,” Larson said. “Unlike suburban sprawl, where you have large neighborhoods and then a shopping center somewhere else, the Ridge tries to incorporate all of it in the same area.”
Larson acknowledged that many Ridge residents still commute to Seattle, and that a “rippling effect” of high gas prices is something residents must grapple with.
Larson said, however, with continued emphasis on features such as park-and-rides and additional routes on public transportation, the impacts of the commute can be minimized.
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