It seems to be a trend: the press is noticing that rising transportation costs are starting to erode the value of housing prices in far-flung suburbs. See, e.g., this Olympian article, and this article from the LA Times.
On the one hand, this is perfectly consistent with what I’d expect. As gas prices rise, living in far-flung neighborhoods gets more and more expensive, while housing that’s close to transit, stores, and jobs seems more affordable. If Econ 101 is any guide, those forces will undermine suburban housing prices, and could even ease the “drive ’til you qualify” phenomenon into reverse.
On the other hand, the real estate market is just now recovering from a prolonged state of extreme wackiness—and I’m sure that it’s possible to find examples to support just about any point you’d want to make about real estate values. Perhaps the press happen to be cherry-picking a few good examples that support their story lines, while ignoring other, contradictory evidence.
So if anyone out there in blog-land has the time or inclination, please point me in the direction of any actual studies on the issue—say, credible academics who’ve compared real estate trends in both sprawling and less-sprawling neighborhoods, or mortgage industry analysts who are advising lenders about where to focus their lending. I’d love to know whether falling land values in suburbia is a genuine trend, or just a media fad.