Turns out DC MacMansioner also hurting.

and I thought these areas are very well insulated due to gov't money pumping direct to communities via jobs, subsidy, etc.

By Rich Miller and Matthew Benjamin
June 9 (Bloomberg) -- Sky-high gasoline prices aren't just
raising the cost of Eugene Marino's 120-mile round-trip to his
job in the Washington area. They're reducing his wealth, too.
House prices in his rural subdivision beyond the Blue Ridge
Mountains in Charles Town, West Virginia, have plunged as
commuting expenses have soared. A four-bedroom home down the
street from his is listed for $239,000, after selling new for
$360,000 five years ago.
Homeowners in the exurbs aren't the only ones whose assets
have taken a hit because of the surge in energy costs. Companies
such as General Motors Corp. and UAL Corp. are writing off
billions of dollars in plants and equipment that are no longer
viable in an age of dearer oil. The destruction of wealth and
capital will weigh on U.S. growth for years to come.
``Our whole economy reflects the relative costs of energy:
the cars we drive, the houses we occupy, the kinds of factories
we have and the equipment in them,'' says Dana Johnson, chief
economist at Comerica Bank in Dallas. ``I'm expecting relatively
large changes in all of these things.''
The loss of wealth could be a double whammy for the U.S.
economy. In the short run, it depresses demand as homeowners
save more and spend less, and companies fire workers. Longer
run, it curbs productivity growth, as firms shift their focus
from increasing worker efficiency to reducing energy costs.
`Uneconomical' Activity
``At $4 per gallon gas, $125 per barrel oil and $10 per
million Btu natural gas, a lot of activity becomes
uneconomical,'' says Mark Zandi, chief economist at Moody's
Economy.com in West Chester, Pennsylvania.
The lifestyle of the exurban commuter may be one casualty.
Emerging suburbs and exurbs -- commuter towns that lie
beyond cities and their traditional suburbs -- grew about 15
percent from 2000 to 2006, nearly three times as fast as the
U.S. population, as Americans moved further out in search of
more affordable houses or the bigger ones that are sometimes
derided as McMansions.
``It was drive until you qualify'' for a mortgage, says
Robert Lang, director of the Metropolitan Institute at Virginia
Tech in Alexandria, Virginia. ``You can't do that anymore. Your
cost of transportation will spike too much.''
The 38-year-old Marino, an archeologist for the U.S. Fish
and Wildlife Service, is among those feeling the pinch. ``Eating
out and discretionary income are a thing of the past for us,''
he says.
Declining Value
He reckons he once could have sold his 2,700 square-foot,
four-bedroom house for around $450,000 based on the value of
other homes in the neighborhood. Now he figures it's worth about
$330,000. Gasoline prices have doubled his commuting costs since
he bought his home in 2003, he says.
``Gas prices are really hurting demand here,'' says Celia
Lainez, a broker at Keller Williams Rice Realty in Martinsburg,
West Virginia. She says she has yet to receive a bid on the
house down the street from Marino's, which has been on the
market for five months.
Nationwide, home prices in neighborhoods with long
commutes and no public transportation are falling faster than
prices in communities closer to cities, according to a study by
Joseph Cortright, an economist at Impresa Consulting. For
example, his study found that prices in distant suburbs of Tampa
fell 14 percent in the last 12 months, versus a 9 percent drop
in areas nearer the city.
Suburbs, Exurbs
``The decline in almost every case is worse in the suburbs
and exurbs than it is in close-in neighborhoods because
transportation costs are so much more of a factor,'' says
Cortright, whose Portland, Oregon, firm studies regional
economies.
Americans are trying to cope by switching from gas-guzzling
trucks and sport-utility vehicles to more energy-efficient cars.
Asian automakers outsold Detroit's Big Three in the U.S. for the
first time last month as buyers left GM and Ford Motor Co.
trucks on dealer lots in favor of Honda Civics and Toyota
Corollas.
``This is a fundamental change,'' Ford Chief Executive
Officer Alan Mulally told reporters last month. The Dearborn,
Michigan-based company plans to temporarily idle its Wayne,
Michigan, SUV plant and cut production at its Louisville,
Kentucky, pickup-truck facility.
Drastic Steps
Detroit-based GM is taking more drastic steps. It plans to
close four North American pickup and large-SUV factories,
cutting capacity by 700,000 trucks a year, and may sell its
Hummer SUV brand, which averages about 13 miles per gallon in
city driving and 18 on the highway, according to government
data.
The largest U.S. automaker is responding to ``a structural
change, not just a cyclical change,'' Chief Executive Officer
Rick Wagoner said before the company's annual meeting June 3.
Gasoline prices are up 31 percent this year and have doubled
since March 2005.
Dennis Virag, president of the Automotive Consulting Group
in Ann Arbor, Michigan, says vehicle manufacturers will find it
cheaper to shut factories than retool them.
``Domestic automakers, in their infinite wisdom back in the
1980s and 1990s, built factories and tooled factories just to
build trucks and SUVs'' like the Ford Explorer, the Chevrolet
Suburban and the Ford F-150, Virag says. ``So it's very likely
you're going to see more plant closings.''
Airlines Retrenching
Airlines are also retrenching. More than a dozen have
collapsed in the last six months, including Columbus, Ohio-based
Skybus Airlines Inc. and Frontier Airlines Holdings Inc. of
Denver.
Chicago-based United Airlines, the world's second-largest
carrier, will cut its fleet by 70 planes and shut its low-fare
Ted unit to counter record fuel expenses. The airline will
ground about 64 Boeing Co. 737s and six Boeing 747s by the end
of 2009.
Delta Air Lines Inc. in Atlanta is grounding 90 planes, and
Fort Worth, Texas-based AMR Corp.'s American Airlines, the
world's largest carrier, plans to reduce capacity on domestic
routes by 12 percent.
``Skyrocketing oil prices are changing everything,''
Giovanni Bisignani, chief executive officer of the International
Air Transport Association, told the group's annual meeting June
2. ``The situation is desperate.''
The association, whose members account for 93 percent of
international traffic, forecasts that airlines may report
combined losses of $6.1 billion this year, the worst since 2003.
`Obsolete' Capital Stock
``The change in energy prices makes a portion of the
capital stock obsolete,'' says Richard Berner, co-head of global
economics at Morgan Stanley in New York. ``That will depress
demand.''
He sees the U.S. economy growing at a sub-par 1.4 percent
next year after expanding just 1 percent in 2008, held back by a
variety of forces that include the destruction of capital
resulting from the rise in energy prices.
Zandi at Moody's Economy.com says permanently higher fuel
costs will depress productivity growth during the next three to
five years as companies retool to boost energy efficiency.
That's what happened in the 1970s, as successive oil
shocks, coupled with increased environmental regulation and
other factors, led to a sharp slowdown in productivity growth.
Federal Reserve Chairman Ben S. Bernanke said in a June 4
speech at Harvard University that he doesn't see a return of
1970s-style stagflation, in part because the economy is more
flexible and adaptable than it was back then. That doesn't mean
the future will be pain-free, others say.
``We're going to see some companies go out of business,''
says economist Philip Verleger, president of PKVerleger LLC in
Aspen, Colorado. ``There is going to be a large amount of wealth
destroyed.''