Rising costs of gas will significantly impact Suburb home values.

If you're buying a home, you're probably facing the common dilemma of where to buy. Do you buy close to downtown, or farther out in the suburbs? You could get a home only 5 minutes from work for one price, or you could get 25% to 33% more home by commuting 20 to 40 minutes to work. Although getting 30% more bang for the buck for your mortgage payment might seem like an attractive option, it's not nearly the savings you think it might be. It might actually cost you more per month. Let's not ignore the even more important factor; If gas prices continue to rise, the farther your neighborhood is from places of employment -- the more that neighborhood will likely drop in value compared to closer in neighborhoods.

Right now, a home that is $200,000 in the "burbs" might seem like a great value compared to a home that is $250,000 closer to downtown. But once gas hits $4 a gallon, it's not going to take a rocket scientist to realize that they'd be better off buying the downtown home for $250,000 than buying a home 20 miles away for $200,000 (or even $180,000). All of a sudden, homes in those neighborhoods that are 20 miles away will have no choice but to drop their price if they want someone to choose their house over the one that doesn't cost an extra $500 a month just to get to work! (Either that, or they'll have to throw in a Toyota Prius to entice potential buyers.) So if you're leaning toward trading commute-time for mortgage savings, you may want to think twice. Even if gas prices do in fact continue to climb, your suburban investment won't see anywhere near the same appreciation that other homes see.

Check out the calculator below to see just how much you are actually saving by buying that home that is 20 miles farther than the more expensive home that is 5 minutes from work.