Study: Gas prices linked to home sales

If you get off easy at the gas pump, it might be time to sell your home.

That’s the conclusion of researchers at Florida Atlantic and Longwood universities, who found that for every $1 drop in gas prices, the average time it takes to sell a home falls by 25 days.

What’s more, the average selling price rises by 2.4 percent, or roughly $4,000 a property, the study found. And the $1 decrease boosts a seller’s chances of completing the deal by about 20 percent.

Ken Johnson, a real estate economist, professor and associate dean at FAU, and Bennie Waller, a professor of finance and real estate at Longwood University in Farmville, Va., said they analyzed 10,000 home sales in central Virginia over a decade.

Johnson said they probably would have similar findings in South Florida, though the specific numbers would vary depending on supply and demand.

“We believe this study shows that most consumers are very narrow-sided in terms of good news and bad news,” Johnson said. “They perceive that they can afford more house, even if that’s not realistically the case.

“They’re using today’s numbers to make long-term forecasts. This says the market isn’t thinking rationally.”

Johnson said the opposite is true as well. Higher gas prices will make buyers feel as though they have to scale they don’t have as tionary income.

Lower gas prices essentially have the same empowering effect as lower interest rates, even though most buyers lock in interest rates while gas prices fluctuate, Johnson said.

Real estate agents also increase their marketing efforts with lower gas prices because they have more money to spend on finding buyers, the study found.

Travel club AAA said last month that summer gas prices likely have peaked and are projected to be at their lowest level since 2009.

The average price for regular gas in Broward County is $2.79, compared with $3.65 a year ago, according to AAA. In Palm Beach back because much discre- County, the averge is $2.84, down from $3.71 last year.

Real estate agents don’t dispute the the study’s findings, but they aren’t convinced there’s a direct link between gas prices and homebuying.

Aside from the price, interest rates are one of the biggest considerations for a buyer because that directly affects the cost of purchasing the home, said Terry Story, an agent for Coldwell Banker in Boca Raton.

Jim Heidisch, a broker at Campbell & Rosemurgy in Pompano Beach, said gas prices are only one part of a larger picture that includes other economic indicators, such as the job market.

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