Housing and the oil shock
Source: http://www.econbrowser.com/archives/2008/06/housing_and_the.htmlPosted on Thursday, June 12th, 2008 | In Current Market News, Economics, Energy Markets, Stocks to Watch
The housing downturn and rising gasoline prices are each exerting a significant contractionary influence on U.S. GDP. There is also an interactive effect between the two.
Temecula, CA. Source: Los Angeles Times.
Temecula is a community in southern California some 60 miles from downtown San Diego and not a whole lot closer to anywhere else. And yet I’ve known people who commute to work here from Temecula, having been willing to trade driving time for more affordable housing. The population of Temecula doubled over the last decade.
But with gas now nearing $4.50 a gallon in San Diego, the housing-commuting tradeoff is looking a lot less favorable for these exurban communities. Via Calculated Risk, the Los Angeles Times reports that as many as 15% of the homes in Temecula are currently either bank-owned or in some stage of foreclosure.
If you make your living trying to provide goods or services to those residents, higher gasoline prices are hitting your wallet by much more than the cost you personally pay for your own gasoline.
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Last 5 posts by James Hamilton
- Yes the future deficits are worrisome - November 25th, 2009
- Factors in local house price declines - November 22nd, 2009
- Receiver operating characteristics curve - November 18th, 2009
- Commodity inflation - November 15th, 2009
- Will rising oil prices derail the recovery? - November 10th, 2009
Affordable Housing, Current Market News, Downtown San Diego, Downturn, Driving Time, Economics, Energy Markets, Foreclosure, Gas Prices, gasoline prices, Gdp, Interactive Effect, Last Decade, Los Angeles Times, Oil Oil, Oil Prices, Oil Shock, Southern California, Stocks to Watch, Technorati Tags, Temecula Ca, Tradeoff, Wallet, Whole Lot
 About James Hamilton (http://www.econbrowser.com)
James Hamilton received his Ph.D. in Economics from the University of California at Berkeley in 1983. He has been a professor at the University of California, San Diego since 1990 and served as Chair of the Economics Department from 1999 to 2002. He is the author of Time Series Analysis, the leading text on forecasting and statistical analysis of dynamic economic relationships. He has done extensive research on business cycles, monetary policy, and oil shocks, and has been a research adviser and visiting scholar with the Federal Reserve System for 20 years. |
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