Abogo has creating a an interesting illustration of the costs of transportation by address. Looking at the Twin Cities, here is a heat map breaking down the average monthly transportation costs (the house on the map is centered on the 55406 zip code):
Many people look at the cost of inner-city living then decide that they can get more for their money by commuting in from the suburbs. With a certain price point, bed/bath, or lot size requirements, they drive until they qualify.
All that driving has a cost, as the above map illustrates. If you’re spending an additional $200 or more per month on gas and all of the other costs associated with long commutes, you’re losing your drive until you qualify benefits.
Another way to look at this is to realize that you may be able to afford more than you think if you buy in shorter commute location. An extra $200/month could translate into something like $30,000 in additional buying power.
To me, the time cost is even greater. How do much do you value your time? At $10/hour, a 30 minute commute is costing you another $200/month in transportation costs. Chances are pretty high that you value your time at a higher rate than that, so adjust that figure accordingly.
Some of Minneapolis’ highest real estate costs are in downtown Minneapolis near the Guthrie Theater in condos like The Carlyle. Units ranging from $300k-$4.5 million generally come with one parking spot with the option to purchase a second spot for $15k-$20k. Since people buying in areas like that tend to have at least one spouse working downtown, the option of having one less car really helps make the numbers work. When the cost of storing a second car is presented in such blatant terms, people get rational. Of course, you’re not avoiding these costs when you have a 2-3 car garage. They just aren’t broken out in the same way.
How much more home you could afford if you only had one car payment, insurance, etc. And, gaining back 250 or more hours per year of your life to spend doing something other than sitting in bumper to bumper traffic must be worth something.