Gas Prices and House Choices

The price at the pump is apparently motivating home buyers to look for homes closer to where they work, says the leading economist for the California Building Industry Association.

The association's latest housing forecast for the state state calls for 15,000 to 17,000 housing permits in Riverside County, Calif., which is a sharp decline from an earlier projection of 25,000 to 28,000 permits this year.

"There has been a massive drop as the commuters from elsewhere (in Southern California) have stopped coming to Riverside County. It's largely a function, we think, of the gas prices, because most of them commute at least an hour, sometimes two to three hours a day," said Alan Nevin, chief economist for the association, during a conference call Thursday.

A University of Southern California real estate forecaster said during a separate presentation Thursday that significant building in the Riverside-San Bernardino region in California led to an oversupply, and that market is undergoing a period of correction.

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