Gas and Selling Prices
Did you know that an increase in gas prices leads to a decrease in home sale prices? A working paper published at Longwood University and Florida Atlanta University found that each $1.00/gal increase in gas prices drops the sale price of your home up to $6,600.00.
This logical if you think about commuters who work in a city but live elsewhere; more money budgeted for gas means that the house must be less expensive. It also makes sense in rural areas with great distances between houses and services.
But what about your real estate agent? The working paper reports that a $1.00/gal price increase drops home sales prices by $4,060 among all agents. However, sellers using agents with less than 4 four years of experience see a $6,600 price drop! Why? Gas prices have a greater effect on newer agents with lower incomes. This can lead to less aggressive marketing on the part of the agent in an effort to lower their expenses. Veteran agents have more deals and more income; therefore they are affected less by gas price increases.
Want to learn more about this working paper? You can read more about it here.
Buyers, it’s obvious what this means for you! Pain at the pump means lower selling prices. Hunt harder when gas prices rise or spike. (Isn’t it funny how we seem to have a “refinery fire” price spike every other year or so..?)
Sellers, be grateful that our gas prices are low and are projected to remain low. However, this is another sign that it’s important to pick a veteran agent with market experience. You don’t have control over your location or over gas prices. You do control who serves as your agent. In the event of a gas price increase, the right vs wrong agent is the difference between $2,500.00+ in your pocket or in the buyer’s pocket.
I’d love to put that $2,500.00 and more in your pocket where it belongs. If you think it’s time to sell, please send an email or call me directly. I’ll be happy to help!