For the first time since the oil crunch reached record highs way back in 1981, gas prices have gone even higher as the nation braces for an expensive summer for transportation. How will gas prices impact housing?

According to the most recent Lundberg Survey, a bi-weekly gas price tracking service, the price of gas is higher at $3.18 per gallon for regular unleaded, than it was in 1981 at $1.35. When adjusted for inflation the 1981 figure translates to $3.15.

In a related story, AAA, a motorist group, showed prices up 11.8 percent over last month.

Those are the kinds of numbers that get people's attention, particularly before an anticipated rise, as gas prices tend to do every Memorial Day and into the summer.

Geo-political worries aside, the crunch is being blamed on lack of refinery capacity and maintenance issues, but the real problem is that comfort and luxury-loving Americans are still driving too many gas-guzzlers.

In 1978, Congress established a Gas Guzzler tax to discourage the production and purchase of energy inefficient vehicles, but thanks to an incomprehensible loophole, most trucks, minivans and SUVs are exempt, providing incentives to car makers to create even more gas guzzlers that are exempt from additional taxes.

Wikipedia states that the U.S., despite protests to the contrary, has barely moved the needle on gas efficiency. "Overall, the past decade has seen the slowest increase in fuel economy since 1960, with fuel economy increasing from 16.4 miles a gallon in 1990 to 17.1 miles a gallon today (as of June, 2006.) This is in contrast to the 1980s when the average fuel economy improved somewhat more significantly from 13.3 miles a gallon in 1980 to 16.4 miles a gallon in 1990.[12] The lackluster increase in fuel economy during the 1990s is largely due to the rising popularity of Sport Utility Vehicles (SUVs) ... ."

As long as the U.S. is "home to the largest passenger vehicle market of any country," [1] which is a consequence of the fact that it has the largest Gross Domestic Product of any country in the world.[2] Overall, there were an estimated 243,023,485 registered passenger vehicles in the United States according to a 2004 DOT study.[3] This number, along with the average age of vehicles, has increased steadily since 1960, indicating a growing number of vehicles per capita.

In fact, the "number of motor vehicles in the US has risen by 157 million (212.16 percent) since 1960, while the population of licensed drivers grew by 109 million (125.28 percent). Between 1971 and 1972, the number of motor vehicles in the US increased by four million, a record at the time. Since 2003, the latest available figures, there are an estimated 1.17 motor vehicles per licensed drivers.

This imbalance and the love affair with SUVs has already caused housing manufacturers to upsize garages, along with other housing features. "Census data collected since 1991 indicates that the percentage of homes built with garages for three or more cars has doubled, from 10 percent in 1991 to 20 percent in 2005," wrote the National Association of Homebuilders in 2006. "The typical door for a single-car garage bay used to measure about 7 by 9 feet, but the trend is now moving toward 8- by 10-foot garage doors."

In 2005, the average floor area in a newly built home reached an all-time high of 2,434 square feet -- up from an average 2,349 square feet in 2004 and just 1,645 square feet in 1975.

Since then, home sizes have moderated slightly due to high building costs. Some homebuyers are seeking smaller, but feature-rich spaces.

If car drivers are anything like homeowners, they won't downsize without a fight. The only time carmakers were shamed into building smaller vehicles was in the mid-70s following the Arab oil embargo of '73-'74, which kicked off steadily rising gas prices into the early '80s.

But according to a recent Power Information Network survey, a division of J.D. Powers and Associates, some car buyers are switching out of their large SUVs and into smaller versions. "Sales of small vehicles, including cars and light trucks, as a percentage of total new-vehicle retail sales, have risen to 31.8 percent in the first quarter of 2007 from 26.3 percent in the first quarter of 2004, but the group also found that "owner loyalty" for large and mid-size cars, small crossovers, or car-based SUVs and small SUVs has remained relatively unchanged.

In 1973, two-thirds of new homes were one-story. By the 1980s, home sizes had risen nearly 25 percent, despite the high energy costs of running a larger home. In 2006, the majority of homes were two-story to accommodate smaller lot sizes.

Like car buyers, homebuyers took advantage of soft energy prices throughout the late 1980s, 1990s and early oughts to build bigger, higher volume homes.

It will take a real energy crisis to get them to downsize.

Published: May 23, 2007

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.