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Gas prices hit a new high today of $3.40 a gallon. In some markets they are already over $4. It seems the pain at the pump is even spilling over into the housing market, as home prices have fallen more dramatically in the so-called ex-urbs where residents face long drives to work.
Take Murrieta, Calif., incorporated in 1991. The population of Murrieta more the doubled to 100,000 over the past eight years, as residents traded hour-long commutes to San Diego or Orange County, Calif. for newly built mini-mansions at lower prices. In the past year though home prices in Murrieta fell 31% to a median $329,000.
Some 5,000 Murrieta homes are in foreclosure, figures Mayor Richard Gibbs. The city council recently passed ordinances requiring banks that foreclose on property to register the houses with the city and hire property managers to maintain them. Failure to do so can result in fines of as much as $1,000 a day.
While cutting back on other spending, the city recently hired an economic development officer to stir up local jobs. “We’re trying to take moms and dads off the freeways,” as Mayor Gibbs says. “When they moved here gas was less expensive.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.