Before you rush out to an open house for a foreclosed house just off the 91 in the next county, please note the cost of commuting. It's been a factor – ignored by some house shoppers – that's critical in evaluating a value-priced house far from any employment centers.While the article was calculating commute distances in the Los Angeles area, those same numbers can be roughly used in many other areas with long commutes and high gas prices.
I asked my trusty spreadsheet to transform gasoline prices and commuting distances into a number that a house shopper could love: how much real estate you could buy with borrowed money paid back with dollars otherwise spent at the pump. What I found was harsh, at least, to me.
To be fair, I used some broad assumptions that won't apply to many situations. But there's my rough guess of a commuter's profile: driver was commuting to the 5-55 intersection in Tustin; their car got 20 miles per gallon; and the math used assumed 6 percent, 30-year, fixed-rate financing. I was generous.
At $4 a gallon, with my commuting formula, gasoline costs alone (forgetting wear and tear, tolls, etc.) equal $23,818 in today's homebuying dollars driving 17 miles one-way from Corona; $53,240 with Riverside's 38 mile drive and $86,865 from Temecula (62 miles.) Compare those gas tabs to a Tustin-to-Lake Forest commute of 10 miles costing, in my homebuying dollars, just $14,010.
In other words, the numbers present a compelling case for short commutes whenever possible.
