Could rising gas prices kill the suburbs?

Rising fuel costs are being blamed for everything from soaring utility costs to lower retail sales and higher airline tickets. And now, experts say high gas prices could reshape U.S. cities.

Once the realization soaks into the American consciousness that high-cost gas is here to stay, Gabriel predicts, those high commute prices will pull more homeowners -- even young families -- to live in central cities and create a push for more public transportation.

"If you or I come back to Los Angeles 15 years from now, we are not going to see (the current) persistent pattern of building single-family detached homes farther and farther into the desert," Gabriel says. Instead, he says, expect "a denser center city, denser inner-ring suburbs … a city that is more vertical."

changes already begun by homebuyers reacting to congested freeways, long commute hours and the desire for a different kind of life.

In San Jose, Calif., builders have clustered attractive condominium developments at and around light-rail stations as the system was built and expanded. An example of transit-oriented development, planners have expected for some time that high commute costs would create a market for such homes.

Walter Molony, spokesman for the National Association of Realtors, says that the gas-price spike is still too new to have generated much in the way of hard data. But if one informal Web survey is correct, commuter wariness looks like it could soon shape home-sales trends. At HomePages.com, 45% of 2,000 readers polled during one week in May agreed that gas prices were "very important" to them in choosing a home. Among the most-important factors in a home location, a short commute was second only to a safe neighborhood.

The economics of suburbia
Economist Jack Lessinger points out that suburbia not only depends on autos for commuting to and from jobs, but that everything in the suburbs -- from stores to schools to restaurants -- requires increasingly expensive trips in cars. Lessinger is the author of "Penturbia: Where Real Estate Will Boom After the Crash of Suburbia."

But with the cost of gas hovering around $3 per gallon on average in the U.S., it's worth considering whether a shorter commute would pay for the incremental cost of a more expensive in-city home.

Assuming a full-time job, $3 gas, 26 mpg and 50 cents a mile for maintenance and no parking fees, a 50-mile roundtrip commute costs $646.15 a month, or $7,753.80 a year, according to the City of Bellevue, Wash.'s, Commute Cost Calculator.

Moving closer to work boosts your house-buying power. Everything else being equal, a 10-mile, roundtrip commute costs just $1,550.76 yearly -- saving about $6,200 per year, or $517 monthly. That can add about $80,000 to the total amount of a mortgage loan, says one Chicago lender. The rule of thumb: Each $250 a month you can free up for mortgage payments equals roughly $40,000 more you can borrow at current rates (using the recent national average of 6.5%), says David Kasprisin, district sales manager for National City Mortgage Co. in Chicago.

"While we have increased the amount of attached homes in recent years to accommodate buyers who chose to live closer to urban centers, we continue see a large percentage of buyers who are willing to trade a bit of a drive in order to have the home of their dreams," says Sierra Wilson, KB Home spokeswoman.

The trick for consumers, then, is still finding that sweet spot between a shorter commute and affordability. For many, that means the suburbs are still in the running.