Responses To Rising Fuel Prices

23 07 2008

From MSNBC’s article For commuters, economic woes pile up:

Even cutting trips to church
When the Mitchells bought their modular home in rural Platteville, Colo., north of Denver, they were among the many Americans trading a long commute for an affordable house.

Seven years later, the Mitchells are making another, more painful trade. Their housing woes compounded by the growing cost of Brian’s 50-mile roundtrip commute, the couple recently decided to let their home fall into foreclosure. Instead, they are renting a house that is biking distance from Brian’s job.

The Mitchells had bought the house in 2001, for $129,900, with the intention of fixing it up and selling it for a profit. But in 2005, when they put the house on the market, interest was tepid at best.

The couple decided to put more money into improving the house, in the hopes that it would stand out among comparable homes in the area. In the end, they plowed some $15,000 and countless hours of sweat equity into the improvements, using credit cards and a loan against a 401(k) account to fund some upgrades.

Still, the house didn’t sell, even when they dropped the price from $126,000 to $122,000. In the meantime, gas prices skyrocketed, which added to their own expenses and made their rural home even less attractive.

The couple, who have two kids, found themselves using credit cards for everyday expenses, like groceries and bills. Even trips to church were curtailed to save on gas. Finally, they decided that their only option was to let the bank take the house.

“Sometimes, in surgery, amputation is the best solution,” Brian Mitchell said.

As the foreclosure proceeds, the Mitchells have rented a house in Longmont, west of Platteville toward Boulder, Colo., that is nicer than the one they had owned. It’s also less than five miles from Brian’s job as a project manager. Although the rent is more than their former mortgage payment, Brian, 43, said that, with gas savings, they are still coming out ahead. The move into town is allowing the couple to downsize to just one car.

“It was a tough decision for us to decide to let the house go into foreclosure, but I’ll tell you what, once we made it … it was very liberating, actually,” he said.

Notice they cut back on trips to church. I do wonder how fuel prices will reshape the landscape of American churches. And whether anyone is fashioning a plan to thrive in the face of more expensive travel.

When Dollie Kinkead found out that her job was slated to be eliminated, she saw a silver lining — another job, at a place she’d always wanted to work, had just opened up. Although the new opportunity, as a training specialist for the Federal Emergency Management Agency, was 80 miles from her home in the eastern Virginia town of Front Royal, Kinkead jumped at the opportunity. “I took the job thinking I could just sell the house and move,” she said.

Instead, she found that she was entering a real estate market already swamped with for-sale signs, many of them tagged “price reduced.” Kinkead and her husband, who paid $306,000 for their home about three years ago, now have it on the market for $276,000, and nobody has come to look at it in weeks.

That means that each work day, Kinkead, 53, leaves the house at 5:50 a.m. and doesn’t return until 7 p.m. Luckily, she drives a diesel-powered Volkswagen Beetle that gets 48 miles per gallon, meaning her gas bill is about $100 per week. She also works nine-hour shifts, giving her one day off every two weeks.

When she gets home, Kinkead says there’s usually time to eat dinner with her husband and little else. But she doesn’t see any other option.

“It’s either that or be unemployed,” she said.

Volkswagen diesels – get one (if you can find one) and you’ll be able to drive twice as long as your neighbor. And you can grow sunflowers for fuel.

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2 responses

23 07 2008
dlr

I remember way back when my wife and I were married, we bought a brand new Ford Festiva (made by Mazda). Now what brings this to mind is this car got 53mpg on the highway!

Why is it that cars today are not getting this kind of mileage? (last I heard, this very car was still delivering pizzas in Morton, IL)

24 07 2008
floydturbeville

I’ve read some articles that ancient Festiva’s, Geo Metro’s, old Subaru’s, and such are in high demand. People are looking for them! But its not as easy as the switch from Beta to VHS.

This is more like us all of a sudden needing to switch back to Beta. There’s a period where manufacturers are going to try (with limited capital, a lot of debt, and a lot of pension/health care obligations) to re-tool to make those high mpg vehicles, and scavengers are going to be paying high dollar for the vintage Festiva’s and the VW diesels.

But even with better mpg, there’s only so much future in driving.

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