Impact of the Oil Spill On the Real Estate Market

Here is an interesting article from Atty. Chris McLaughlin, from Loss Mitigation Institute:

Just when you thought the Gulf oil spill couldn’t get any worse, a new forecast by Housing Predictor has many experts fearing the worst; coastal real estate and condos throughout Florida, Louisiana and Mississippi dropping as much as 30 percent or more in response to what is already being termed the worst natural disaster in the history of the United States.

Specifically cited properties expected to be hardest hit include:

Beachfront vacation homes and condos: Not only have many of these properties been overbuilt in recent years but high vacancy rates, troubled Homeowner Associations and rising fees have contributed to escalating prices and declining resale rates. The added burden of tar covered beaches combined with poisoned water could be the straw that breaks the proverbial camel’s back.

Worker related neighborhoods: Undoubtedly the oil spill will adversely impact workers in the fishing and tourism industries as massive blobs of oil pollute the waterways and ocean. Out of work fishers, tour guides and others displaced by the oil spill will be hard pressed to replace their earnings with unemployment rates already in the double digits for many parts of Florida, Mississippi and Louisiana.

Riverfront homes & wetlands: Although it’s too early to tell for sure, environmental experts believe the oil and other pollutants are likely to make their way inland via freshwater deltas resulting in further damage to environmentally sensitive wetlands, marsh areas and even rivers throughout much of the Southeastern United States.

    Double Trouble

The timing couldn’t be worse; real estate has declined by as much as 65 percent in many of these areas including the Florida panhandle, with official unemployment rates well into the double digits. Not only is the BP oil spill dramatically impacting tourism, the oil industry and the local ecology…the main sources of income for an already struggling region…but this crisis is expected to have profound impact on the economy for years – if not decades – to come. Already nearly 70 percent of the $40 Billion dollar summer bookings have been cancelled, resulting in one of the most severe losses in recent history for a state that is facing severe fiscal shortages…without a drop of oil even having reached the shores yet.

    What to Watch

Unfortunately, the worst may not be over. As BP continues to encounter difficulty in sealing the leak, weather patterns and the gulf stream are expected to make matters even worse. As the hurricane season officially begins, the weather service is calling for an above average years in terms of storm related activity; activity that could easily worsen an already fragile situation by distributing oil over an even larger area of land and sea. Of even more immediate concern is the observation that the oil spill is now reaching the gulf stream which circulates ocean waters from the gulf around the bottom of the state and then north via the eastern coastline potentially impacting more than 75% of the Florida’s coastline. With BP’s most recent announcement suggesting the spill may continue running until at least August, experts are bracing for the worst even while hoping for the best.

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About Tina Hartman

Tina Hartman is the owner of Short Sale Solutions, the leading short sale negotiation company in all of California. We pride ourselves in providing the very best possible customer service for processing & negotiating short sales while generating an outcome that benefits all parties.

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