Suburbs feeling the pinch as fuel prices soar

By Helen Chernikoff

NEW YORK, (Reuters) - Ever since the rise of the automobile in the 1950s, the American Dream has featured a home in the suburbs and two cars in the garage.

Now the iconic white picket fence comes with a hefty price tag in the form of the cost of the gasoline needed to drive to work and to the supermarket, and the suburban idyll is under review.

In different parts of the United States, there are signs of change. While home prices in the suburbs have crashed, apartments in city centers are in demand. Home builders across the country are frantically trying to unload land they had intended for new subdivisions. And planners are rethinking how they can meet demand for housing.

One such place is Stapleton, on the site of what used to be Denver's airport. Its developer, real estate company Forest City, puts homes within walking distance of schools and stores while linking them to the workplace by public transportation.

Resident Evelyn Baker says Stapleton appeals to a "cheapskate" side of her nature that favors towing her offspring about in a trailer attached to her bike over paying for gas for her car.

"We're a family of four with two young kids and the obligatory yellow Lab, but we've managed to get by with one car," said Baker, who has lived here since April 2006.

And, with gas prices above $4 a gallon, Baker said her move to Stapleton feels like a smart decision both because of lower day-to-day costs and the durability of her home's value.

"I do feel like my house is retaining its value, and I'm really excited about that," Baker said.

In the suburb of Maricopa, about an hour's drive outside Phoenix, residents have a very different feeling.

Built on former corn and cotton fields, the suburb has grown to number 38,000 people from about 1,500 in 2002, accommodating people who were willing to accept longer commutes in order to get homes at cheaper prices.

These days, Maricopa has been inundated by foreclosures and short sales -- where lenders agree to take a repayment that is lower than the outstanding loan to avoid dealing with a foreclosure, and high gas prices are part of the reason.

"Gas prices put a strain on people. The bulk of people that live here have to work and do have to commute, so obviously it adds to their expenses," said Bill Wasowicz, a realtor with Fortuna Land & Realty in Maricopa.

The town even launched its own bus service, taking residents to work in central Phoenix and home again for $6, but still homes here are hemorrhaging value.

HERE COMES THE NEIGHBORHOOD

Tracy McKelvey and his wife Jan lived in a similar suburb and used to commute two hours each day to their jobs in Phoenix. But, a few years ago, they traded in their three-bedroom, two-garage house in the Phoenix valley for a downtown loft.