I’m not that concerned for Temecula. Let’s say gas prices do go to $10/gallon, it being $8/gallon higher than your baseline. Econo car gets 20/mpg during rush hour and drives 60 miles each way to work. That’s 6 gallons a day x $8/ extra = $48/day x 5 day work week = $240/week x 50 weeks a year commuting = $12,000 per year.

$12,000/year is a lot of money. It’s enough to debt service $150,000. If it wasn’t for the wear and tear on the car, it means that on a strictly economic basis, a person can afford to spend $150,000 more for a home located within biking distance of where they work.

But virtually nobody lives that close to work. Most everyone living in a subdivision home in this region has to drive to work, and the average commute probably is 15 miles. So we’re not talking about $1000/month extra in gas, we’re talking about $750/month and a $115k differential attributable to increased gasoline costs. And that’s at $10/gallon.

At $7/gallon gas were talking an extra $5000/year in gasoline costs for Temecula vs. Scripps, thereby justifying another $75,000 premium above and beyond what’s already in place.

I think the more centralized areas will increase in value and marketability at the expense of the outlying areas. I also think that more companies will relocate to these outlying areas so they can cut back a little on wages. Once people get used to the idea, things will settle down.

Temecula and Murrieta already have sizable business parks with plenty of room for more development. The same holds true for most of the communities along the I-15 and I-215 corridors. The weather in Temecula isn’t that much hotter than in Scripps. 95% of all residents in both communities don’t spend any time whatsoever at the beach, so beach access isn’t that big a deal.

I think increased oil prices will accentuate existing trends, but I don’t see the outlying areas becomming ghettos just yet. I have faith in technology, too.