"You've Caught the NET!"

It wasn't all that long ago, here in Chicago, and I would assume, in the place where you live, that many homebuyers started looking at newly-built subdivisions "way out in the country" - distant from downtown.  Despite high commutes, most found they could find a bigger home, with more land, far more economically than many closer-in communities and neighborhoods.

"What the heck," many might have said.  "Gas is cheap.  And it's just too expensive to buy a usually-smaller home, with fewer features, closer to the city."

Today, many of these new "ex-urbanites" are beginning to question their move.  In many prices of the country, regular gas still costs over $4.00 per gallon (in parts of Chicago - it remains over $4.30!)  Popular, high-leverage, low-interest loans are difficult, if not impossible, to find.

In addition, the houses in the closer-in neighborhoods have seen deep discounts recently, as many frustrated home sellers here try to sell their home for whatever they can get for them.  If you're a qualified buyer, homes in desirable, closer-to-downtown neighborhoods, or near commuter train stations, are suddenly more affordable.

Here in the Chicago Area, many moved to Lake County, North of Chicago, where Downtown Chicago workers braved a  1 1/2 hour commute to get to work each day.  Others fled far west - making distant Kendall County, West of Chicago, one of the fastest-growing counties in the U.S. in 2005 and 2006.

Many of the sub-divisions into which they found their new houses were distant from local shopping and METRA Commuter Trains to Downtown Chicago and The Loop.  However, comparatively cheap gasoline, combined with the savings and added features of an ex-urban home, more than made up for the increased distance from town.

In 2004, Jodi Caldwell moved from Southwest Suburban Bollingbrook to the Far Western Chicago Suburb of Yorkville, in distant Kendall County.  She couldn't resist how much house and land she could buy there, for less money, she recalled.

Today, however, Ms. Caldwell and her family budgets over $1,000 each month for gasoline.  She drives miles to go shopping, and the closest METRA Commuter Train Stop, with service to Downtown Chicago, is in Suburban Aurora - 12 miles from her home.

Caldwell, herself a Real Estate Agent, feels today the distance of many of the homes in her community from convenient shopping and area mass transit may be scaring away some potential home buyers.

According to the Center for Neighborhood Technology, families in far-away Kendall County earning the median income now spend as much as 26% of what they earn on transportation.  Those living in closer-in communities, with closer mass transit options, spend as little as 14% of their household income on transportation, the agency found.

"Transportation costs are now overtaking housing costs for families," said Mike McLaughlin, Transportation Director for the Metropolitan Planning Council. "The days of 'I want my 2 acres and to live in the middle of nowhere' may be declining."

While home prices in many parts of the Chicago Metropolitan Area have fallen over the last few years, prices are falling much faster in distant communities where long commutes are required, and public transit options don't exist, says Economist Joe Cortright.

"It's the places where you have to drive everywhere that will have the biggest challenge," said Cortright, whose study, "Driven to the Brink," was funded by CEOs for Cities, a pro-urban group based in Chicago.

In suburbs ranging from Crystal Lake, far northwest of Chicago, to Manhattan, 50 miles south, builders and sellers of existing homes emphasize close proximity to new shopping strips, and newer METRA Commuter Train Stations.  This puts more distant communities at a serious competitive disadvantage.

How will the level of interest in more distant homes play out long-term?  We don't know.  The shifting housing market has had one noticeable side benefit - communities closer in are seeing resurgence.

For more, please read our post from yesterday afternoon @ BlogChicagoHomes.com, and the link to Gerry Smith's story in last Sunday's Chicago Tribune.

DEAN & DEAN'S TEAM CHICAGO