Real Estate Comps in the Gulf Coast have shown the oil spill is an environmental disaster and a serious blow to many businesses and families along the coast. In that same vein business and property owners along the Gulf Coast, particularly in Florida, are being significantly affected. Unfortunately, people planning to build family properties in Florida are beginning to reconsider as the massive oil slick spreads across the Gulf of Mexico. It is a serious blow to the state’s hard hit real estate industry which had been showing signs of recovery.
It is also hitting the holiday home sector with tourist numbers down because potential visitors are being put off. Many stalled projects generally are second or vacation homes on the water but also include primary residences, homebuilders and suppliers say. Several homebuilders reported a halt in construction since the crisis began.
New home sales that were beginning to improve earlier this year have slumped since the oil rig, Deepwater Horizon, exploded and began gushing oil off the Louisiana coast in April. Business is at a standstill because no one knows what is going to happen, according to Darrell Day, president of Dayco Construction. There is uncertainty over where the oil will land, how it will be handled and what federal regulations will follow, he added.
The oil spill is also likely to affect local property values, according Rick Harper, director of the University of West Florida’s Haas Center for Business Research and Economic Development. Second homes are most vulnerable because the value is linked to the ability to lease the property when not in use. BP has already paid out $183,602 in claims for losses in Florida. About $11,722 of that has been paid for losses to total real estate sales.
But it is not just property along the Gulf coast that is affected. Additionally many worry that the effects of the oil spill is attributing to the overall decline in real estate sales which is 20% lower than last year in this region. Let’s continue to keep the people of the Gulf Coast states in our prayers as they continue to face this crises in the near future.