Oil Spill May Cost $4.3 Billion in Property Values

Oil Spill May Cost $4.3 Billion in Property Values (Update2)
By John Gittelsohn


June 11 (Bloomberg) -- BP Plc’s oil spill may drive down the Gulf Coast’s shore-area property values by 10 percent for at least three years, according to CoStar Group Inc.

Losses may total $4.3 billion along the 600-mile (966- kilometer) stretch from the Louisiana bayous to Clearwater, Florida, the property-information service estimates.

“It’s just another blow to an already depressed real estate market,” Norm Miller, CoStar’s vice president of analytics, said yesterday in a telephone interview from San Diego. “The best thing you can do if you’re in real estate in this area is bide your time, don’t panic and don’t try to sell in this environment.”

Falling real-estate values are one consequence of the worst environmental disaster in U.S. history as oil keeps gushing from a BP well once pumped by the Deepwater Horizon rig. An April 20 explosion there killed 11 workers. Oil washing ashore will further harm property values in an area where Moody’s Economy.com estimates prices fell as much as 34 percent from the peak of the U.S. residential real estate market in 2006.

The median U.S. home price was $173,100 in April, down 25 percent from July 2006, according to the Chicago-based National Association of Realtors. Florida real estate is among the hardest hit markets, with one in every 184 households in the foreclosure pipeline, according to RealtyTrac Inc., an Irvine, California-based data company. Only Nevada and Arizona have higher rates, RealtyTrac said yesterday. ............(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601010&sid=a3bcMFAJeyn0

there are no jobs? This is like the estimate that Florida tourism will drop by 50%. What that really means is that Disney will stay about the same and no one will come to the Gulf beaches.

That one in every 184 figure must include paid for houses and people who rent.