Commuting costs and housing markets- S&P makes the connection

A link is below to an interesting paper from a Standard and Poors economist. It validates through changes in housing prices what planners have been saying for a long time: exurban, sprawl development is unsustainable. The author makes the case that the recent rise in gasoline prices and heating and cooling costs have made smaller homes closer to work, schools, and parks more desirable and economically stable than McMansions 2 hours from work. Nice to have it wrapped up with a bow from a credible source. Their conclusions:

During market downturns, home prices fall the least in the most desirable areas of a metropolitan region. As housing affordability improves, home buyers who were previously priced out of their preferred towns and neighborhoods will be able to purchase properties in these areas. So, even as overall sales volume drops, relatively stronger demand for housing will limit price declines in neighborhoods with shorter work commutes, better schools, and easier access to parks, recreation, and retail centers. Because of sharp increases in gasoline prices, living closer to work has become an even more important consideration in the location decisions of home buyers. When combined with large inventories of unsold housing on the edges of urban areas, this shift in preferences will mean that prices for homes in outlying neighborhoods will continue their more rapid decline and will be slower to rebound when housing markets finally start to recover.

See link to article at: http://www2.standardandpoors.com/spf/pdf/index/052708_Housing_bubbles_collapse.pdf