Proficient Note Buyers
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June 09, 2008
"Exurbs" Running Out of Gas
Who would have ever thought that the value of one's home would be determined in part by energy prices? Before you dig into this week's blog, be sure to read the accompanying story in the "Articles" section of our website. Then come on back.

OK, all caught up? Strange as it may seem, 'getting away from it all' with regard to where you live isn't as desirable as it once was. "Exurbs" are defined by one website as " a region, generally semirural, beyond the suburbs of a city, inhabited largely by persons in the upper-income group."

Honestly, I didn't even know what an exurb was until I read the article on Bloomberg. The town I live in is only about 15 miles from a metropolitan area, so it's likely still considered a suburb. Whether talking about suburbs or exurbs, the cost of commuting is a double whammy for many workers.

The old adage about real estate ("Location, Location, Location") seems appropriate for this discussion. I must admit when I bought my house five years ago and commuted 20 miles one way to work, the distance to town never even crossed my mind. So I had to drive 1/2 hour each way...big deal. I would have been more concerned about the time it took than the cost to get me there and back. My, how things change.

I remember skiing in Colorado about 12 years ago and paying $13 for a hamburger in one of the mountaintop lodges. I asked the guy in line next to me at what price point people would stop buying their hamburgers. $20? $50? $1,000? I wonder the same thing today about gasoline.

It was less than 10 years ago when I last paid under $1.00 per gallon of gasoline. Today it costs more than four times that much. At what point will you trade in your SUV for a Camry? At what point would you sell your house in the country to be closer to your workplace? At what point would you start carpooling, riding your bike, or walking, if at all possible? Maybe some of you have already done one or more of these things.

You're probably reading this because you're collecting payments on a real estate note, and this blog's headline caught your attention. Whether or not it's the best time to sell can only be determined by you. However, ask yourself this question: At what point would you sell your note knowing your monthly payment keeps buying less and less each month? Additionally, is the value of the property you sold being affected by its location and current gas prices?

Call us today for a no-obligation evaluation of your note. Let us provide some options should you decide to cash out now, rather than waiting to see what gas prices and inflation in general do to the purchasing power of your payments over the next several years.

Besides, how does one enjoy the wide open spaces if one can't afford to get there???


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