When does it pay to commute?

Rising gas prices can hit the wallets of commuters and homeowners quite hard. Since San Francisco is a popular commuting destination from suburbs in all directions, we decided to take a look at how the cost of commuting and the state of local housing markets can combine to make some places more favorable for commuters to settle down in.

In distant suburbs such as Tracy (62 miles), commuting to San Francisco for work can cost you over $1,000/month in gas and car ownership costs. Even coming from nearby Millbrae (14 miles) will set you back nearly $500/month. This raises the question: is it cost-effective to buy a home away from the city and commute there for work?

When combining monthly commuting costs with monthly mortgage payments for a typical home in several Bay Area cities, we found a wide range of average monthly expenses—some higher and some lower than what you would expect to pay to both live and work in San Francisco (see chart below).

Based on the average price for a home in San Francisco and commute costs per AAA a family pays $4,648 per month in mortgage and auto costs. For those commuter cities falling below the San Francisco average (e.g. San Bruno, Richmond, Hercules and Tracy), a home-buyer can expect to buy an above average home without pushing their monthly costs (including commuting) over those typical for a San Francisco home. In more expensive areas such as Pleasanton and San Rafael, combined commuting and mortgage expenses make it more expensive on average than living in San Francisco, but the type and size of home is quite different.

Take a look at what you can get in Hercules and Tracy if you are willing to pay average San Francisco prices:

Tracy: 5 beds, 3 baths, 3,101 sqft
http://www.trulia.com/property/20282983-1895-Bankston-Drive-Tracy-CA-95304

Hercules: 5 beds, 3 baths, 2,390 sqft
http://www.trulia.com/property/6920038-1305-Turquoise-Drive-Hercules-CA-94547

San Francisco: 4 beds, 3 baths, 1,915 sqft (Sunset District)
http://www.trulia.com/property/324480-2314-36th-Ave-San-Francisco-CA-94116

And here is a list of 5 of the best values for Bay Area commuters:
         City                           Avg. Monthly Cost                       Distance from SF
1) Emeryville                              $2,466                                            10 miles

2) San Pablo                              $2,774                                            19 miles

3) Richmond                              $2,982                                            17 miles

4) Oakland                                $3,033                                             12 miles

5) El Sobrante                           $3,119                                             22 miles

Of course, many are willing to make sacrifices on the size of their home for the convenience and lifestyle of the city. These figures just point out that when considering where to live, the cost of commuting can have a significant impact on what you can afford. With the rising costs in gasoline, it will be interesting to see if there is more demand for homes closer to where the jobs are.