Readers suggested a topic on proximity and the housing bubble. "I’m in Washington, DC. I’ve been watching the local market here since 2004. In the past year, I’ve noticed the exurbs and suburbs getting hit really hard. Parts of Prince William County are down 50+% since the peak, and the county as a whole is currently down 30% YOY. PWC had a lot of subprime lending and they were one of the first areas to start buckling under pressure."

"Close-in desirable neighborhoods in the District are still faring fairly well. They are down 5-10% since the peak, but seem to be holding fairly steady. During the boom, these areas rose just as much as everywhere else. These neighborhoods are still running with 6 months supply or less of inventory. Foreclosures are non-existent."

"My question is, when will these areas drop? Will they ever drop like the suburbs/exurbs? How does the increased desirablilty of living in the city (improved city amenities compared to pre-bubble times, walkable communities, high price of petrol making mass transit more desirable) play into the downturn? Will these city areas remain expensive in this post-bubble world?"

A reply, "I believe there has been a structural shift favoring close-in areas in major metro areas where the close in areas are not social landfills. The demand for such areas now exceeds the supply, while for McMansion exurbs the opposite is true — there is plenty to go around."

"Cyclically, however, the prices are still too high close in, just like everywhere else." "Let’s take the NYC case. When we were looking to buy a house in the early 1990s, a 1915 rowhouse without parking in Windsor Terrace Brooklyn, a 1940s rowhouse with a rear garage and front garden in further out (but still in NYC) Forest Hills Queens, and an early 1960s Levit ranch in the suburbs of Long Island, all cost the same — about $200 K."

"I expect the Brooklyn house I live in to sell for more than the other two in the other two unless the state really succeeds in destroying NYC (they’ll try). But it sure as hell won’t sell for $1 million in todays’ dollars, the recent price."

"BTW, with what may happen to mass transit and the price of gas, I’m glad I live close enough to bike the nine miles to work. But the ideal commute is one I heard about one guy having in DC. He bikes the Potomac, picks up a boat at a boathouse, rows to another boathouse, picks up another bike, and rides to work. People pay big bucks to go on vacation to do things like that. He gets to do it every day."

To which was said. "By day three of this I’d be preparing to kill myself. A bit of this on vacation is one thing. Day after life-sucking day of this would get really old, really fast. At least on public transportation I could read or knit."

Another said, "Although winter would be challenging….there are people who do that here (OR), no matter what. January must be interesting."

One posted, "My take (from someone living in the exurbs, though not commuting to the city) is that the exurbs’ curve is more extreme, and ahead of the city areas by about a year or two. It’s more extreme because the exurbs see more expansion during boom times, and conversely more contraction during bust times."

"Downtown DC is declining somewhat now I think. It’ll continue declining after the economy levels off (*if* if levels off). Eventually the exurbs will start to pick up again, then they city."

"Generally it depends on the area, especially the case with DC which is so affected by government policy. Loudoun and Fairfax counties were the biggest boom this time due to military and security contracting. My guess is that MD will boom bigger than NoVA next time, due to health care being the next big government thing, and the decline of the military as we pull out of Iraq."

And another, "Arguably we’ve had an oversupply of housing constructed. Nowhere near as bad as MIAMI, but it’s still there. Because bluefields developments are easier than infill or highrise construction, the supply of those relative to the the demand of those who would trade commuting time for grass yards and HOAs has risen more than the supply of 'urban living' or close in suburban developments."

"I don’t think that we’re seeing what many here have posited, that there is decline in the relative demand for the (energy and time) inefficient exurban living. I’m sure that some have overestimated their ability to afford the time and money of a long commute. But I believe that relative price decline differentials between exurb and inner suburb/urban markets is mostly supply, not demand driven."

One points to commutes. "It would be interesting to see a study on comute/travel/traffic in the various cities as this seems to directly affect housing prices."

"I’ve spent a lot of time in the DC area and the traffic there has to be seen to be believed. Just horrible. But the same can be said for parts of Atlanta as well. NY is tough but traffic does move outside the city - at least it does on the NJ turnpike (survive that and you can make it anywhere). Boston is in a class of its own though, the worst place I’ve ever driven in, a nice city but …"

The Philadelphia Inquirer. "The view at sundown from the McCausland family home paints an unlikely picture of how high gasoline prices are deflating the modern-day American suburban dream."

"When Brian and Dawn McCausland bought this Colonial on a half acre in Montgomery County in 2004, they made a deal with the devil during a sky-high housing market: They and their four daughters would live here, but Brian would commute 100 miles round-trip to his job as an insurance adjuster in Delaware County."

"But now, with gas averaging $3.30 and rising, the McCausland dream is getting soaked at the pump to the tune of $300 a month, or $3,600 a year, double their cost four years ago. They are among many families of modest means who took on big commutes from exurbia for a taste of upward mobility."

"'My yearly increases in my salary and bonuses are only going to cover the increase in the cost of gas,' said McCausland, who by now, he'd be more financially secure."

"'I'm really not making any more than I had been,' said McCausland. 'I'm not getting ahead.'"

"Regional highway statistics suggest super commutes grew in number during the recent real estate boom. An estimated 20,000 workers travel 40 miles or more each way to jobs in Southeastern Pennsylvania and South Jersey, said Don Shanis, deputy executive director of the Delaware Valley Regional Planning Commission."

"In real estate parlance, families like the McCauslands 'drive to qualify' for a mortgage; the big house they want is affordable only in far-out communities."

"Dawn McCausland reentered the workforce as gas began biting into the budget. The family spends $7,000 of gross income on school tuition, uniforms, books and activity fees. An additional $9,000 covers Brian's employee contribution to health insurance coverage for the family."

"'We're not living a lavish lifestyle, but it all goes to bills,' McCausland said."

"'I did expect to have a beautiful house, a loving husband,' she said. 'But I wanted to be able to go to the store and buy school uniforms and not worry about 'OK, how many years can I get out of this?'"

"Instead, she doesn't even fill the minivan gas tank. 'I just expected things to always be even keel,' she said."

"Seated beside her at their kitchen table, Brian shrugged his shoulders. 'It's America,' he said. 'You think you're always going to work hard and get ahead. And it's not always that way.'"