Will the oil spill affect Gulf Coast real estate values?

I’ve heard this question many times since the unfortunate explosion of the oil rig on April 20. Just as real estate values along the Gulf Coast were sputtering to recover from its steepest downturn in decades, the Gulf Coast takes another hit.

I received two different e-mails yesterday from real estate brokers along the Gulf Coast providing information and hoping to minimize any negative reaction to this disaster.

As we all sort through the reams of information trying to assess the impact it may have not only on people’s lives, but also on real estate values, I can only draw one conclusion: A disaster of this type, that has proven more difficult to stop than anyone originally imagined, cannot occur without affecting the values of the real estate along the Coast.

Even within a few days of the explosion, I overheard comments of people reassessing their vacation plans as they consider the impact of a possible oil slick moving to the beaches. Convention planners for at least one group I am familiar with are considering the impact it will have on attendance.

Last week, I read of two groups of condo owners in Alabama who are filing law suits for damages from the spill. There are websites like www.deepwaterhorizonresponse.com that demonstrate the efforts going into attempting to contain this spill. With billions of dollars of potential losses, it only leads me to conclude that it will impact our real estate values along the Gulf Coast area.

Now, many property owners are asking: Where do we go from here? Unfortunately, I do believe that this may prolong the recovery of real estate values in the affected markets as buyers take a further wait-and-see position. I suppose the good news of that is that most existing owners were already in a “holding” mode as they await a recovery.

Naturally real estate values are not the most pressing question of this disaster. I pray for the families that lost loved ones on the rig and those that are affected by this disaster. I can only hope and pray that the impact on our property values, and especially our environment, will be minimal as experts begin the recovery process.

I would love to hear your thoughts of the oil spill and the Gulf Coast’s recovery process in general.

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~ by Craig King on May 17, 2010.

4 Responses to “Will the oil spill affect Gulf Coast real estate values?”

  1. Thanks for the blog post. Since we’re way up here in New Jersey, the whole situation just seems surreal and sad, but distant. Reading your first-hand observations remind us that regardless of where we are, this disaster affects us all.

    We’re all crossing our fingers, waiting for a solution. Best of luck.

    • Thank you for your comment, Heidi. I think it is probably surreal and hard to fully comprehend for all of us, but you’re right, it does affect us all regardless of where we are located.

  2. […] that the oil spill will further extend the current depressed prices along the Gulf Coast. After my earlier post on the effects of the oil spill on Gulf Coast real estate values, I want to share my assessment of the current situation now that I’ve had the opportunity to […]

  3. The oil spill within itself is of historic purport ions. The implications of the spill will become monumental and will reach across the U.S. and throughout the world. The $41 billion dollar New Orleans Export trade largely comprised of Oil Seed & Cereals derived from Midwest farming operations which account for 45% of the $41 billion exported out of New Orleans in 2007 will be at risk. Shipping from the port will be greatly diminished forcing alternative logistic routes and potentially pricing these products out of the market.

    The adverse implications of the Oil Moratorium will put at risk nearly 50,000 jobs spanning from Florida to Arizona and to make matters worse since 32% of our domestic oil production is currently at a halt our reliance on foreign oil will rapidly generate off balance demand for OPEC allowing Americans to finally experience what European drivers have seen for years, $7 and $ 8 dollar a gallon gasoline. When all is said and thought to be done the newly revised regulations for off shore drilling could make it nearly prohibitive to seek oil in the gulf. If that is allowed the lasting implications of losing this base could be of biblical purport ions.

    Regardless we should all remain positive and plan ahead.

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