Suburbs Are Hurting From Birth Rates and Gas Prices

A recent N.P.R. report about housing prices in D.C. shows the close link between driving costs and the housing market.

According to the report, home prices in the suburbs have fallen 18 percent while those in the District have risen 11 percent.

No doubt some of this difference is due to a change in demand toward the District resulting from reduced birth and marriage rates and a lessened desire to be in the suburban school districts.

Part of the change in demand, though, has come from the big increase in gasoline prices. High gasoline costs increase the cost of living far from downtown, so the demand for suburban housing drops.

Especially strong evidence for this effect is provided by a comparison of housing prices near D.C. Metro stations. In the suburbs, those prices have fallen less than average, while within the District, house prices near stations have risen more than average.