The British Petrolium oil spill could cost gulf coast home owners up to 68 million dollars in lost property value that could could continue over to 2011. In addion to a huge loss, BP could cause a total of 3 billion dollars in loss over the next 5 years.
Among the houses affected in the British Petroleum spill, 71,000 homes will loose value. Of these house holds located on the Gulf Coast, most of them are located in Florida. The number of homes affected by the oil spill are ranked as followed, Florida, Mississippi, then Alabama. Without a surprise, homes located on the Gulf Coast are expected to suffer the most, with an average loss of $56,000 loss.Other areas are expected to loose different amounts of home values. In Mobile, Alabama, some homes are expected to loose $45,000. In Pensacola, Florida, some homes are expected to loose as much as $40,000.
As a result of the Gulf Coast oil spill, Pensacola is destined to have the largest impact among all cities located along the Gulf Coast. With all homes in consideration, Pensacola is expected to suffer 1.2 billion dollars in total.
Mark Flemming,CoreLogic’s chief economist, stated “The main factor in the reducing prices is people willing to pay as much for soiled beachfront property. However, he added, buyers often overly discount properties after a major storm or tragedy.A destructive hurricane, for example, may hit an area once every 20 years or so. If there hasn’t been one for, say 10 years, buyers don’t worry about it and bid up the prices of beach-front properties.”
A core logic survey explained that identical homes located just miles apart from each other could have a major price difference because of location. People are more more inclined to live on a beach rather than live a few miles away from the shore.The oil spill has certainly affected many homes located on the Gulf Coast. As a result, Coldwell Banker Alfonso real estate has felt a major setback by the decline in home sales located along the Gulf Coast. In July 2010, only 160 sales were closed compared to the 237 sales closed in July 2009. All in all, the British Petroleum oil spill caused a fall in real estate by 32%.
Karen Glass said,”It’s not people telling us the oil spill is keeping them away, although we do hear some of that,” she said. “It’s that we’re just not getting any buyer calls at all.”