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Home | News | Loss Mitigation | BP Oil Spill Devastating Coastal Housing Markets, and Spreading Beyond
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BP Oil Spill Devastating Coastal Housing Markets, and Spreading Beyond

One in four real estate professionals polled by ""Clear Capital"":http://www.clearcapital.com/company/pr_details.cfm?position=30441 said the BP oil spill has brought home sales to a halt and is pushing already depressed property values[IMAGE]

lower along the Gulf Coast, with the impact even spreading beyond the coastal region to nearby areas that have seen no physical damage from the environmental catastrophe.

The southern coastal area of Alabama, which along with the Florida Panhandle reported the greatest concentration of physical property damage from the spill, has seen an estimated 5-15 percent decline in home values, with market inventories rising as sales have all but come to a standstill, Clear Capital said. In Mobile, Alabama, the number of home sales fell 25 percent in June from one year ago.

Clear Capital reports that further east, as far as Panama City, Florida, inventories are on the rise as result of tar balls washing ashore. Similar to Mobile, Panama City saw a 32.5 percent decline in sale volume in June compared to the previous year's numbers, reflecting the hesitation buyers have in locking themselves into a potentially affected area. Prior to the spill, the Panama City area had observed a 10.7 percent increase in sales for the month of April 2010 compared to the previous year.

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Clear Capital says this slowdown in sales is likely to dampen the recent price stabilization experienced in Panama City. The company says all areas along the Florida Panhandle are also reporting at least a 5-15 percent drop in property values.

""The results of our survey reflect the overall uncertainty of where and by how much the oil spill is affecting individual local markets,"" said Dr. Alex Villacorta, senior satatistician for Clear Capital. ""Many of these local markets in the Gulf have already experienced significant price declines over the last few years as well as a recent drop off in sales volume after the tax credit expiration. Additional downward pressure…will only serve to further dampen home price recovery.""

More than just physical damage, Clear Capital says social stigma is having a dramatic impact on housing markets, reaching inland and beyond the physical presence of oil.

For example, when polled, real estate agents in St. Petersburg, Florida said the water and beaches are clean, but they blame the social stigma of the oil spill for the recent decline in home sales there.

Clear Capital says leading up to the spill, homes sales by volume were very positive in St. Petersburg. March and April recorded strong increases rising 18.3 and 16.8 percent from the previous year, respectively. May also managed positive growth, but at 4 percent a downward trend was evident. By the end of June, home sales there plummeted sharply, dropping 8.8 percent year-over-year.

Further south, in Naples, Florida, one real estate office that usually receives five out-of-state customer inquiries per week, told Clear Capital that they have received only one call every-other-week since the spill occurred.

Clear Capital says markets inland from the coast, but whose industries rely heavily on the Gulf, such as New Orleans, Louisiana, and Houston, Texas, are also reporting a slowdown in real estate activity. The company says layoffs and business closings in these areas are having a stark impact on housing.

About Author: Carrie Bay

Profile photo of Carrie Bay
Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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