Oil Spill And Gulf Coast Property Values

By
Real Estate Broker/Owner with Pensacola Real Estate - Team Sandy Blanton Realty, Inc.

 

We're all aware of the thousands of barrels of crude oil are pouring into the gulf every day from ruptured lines. The spill is still miles from our shores but what many people don't know is that the local housing market is already feeling the effects. We live in an area where property values are dependent on access to our white sandy beaches and anything that threatens that has to be taken into account. Part of what we sell is the lifestyle of living on or near the beach.

10 Calle Traviesa is a Team Sandy Blanton exclusive listing located in the Lago Bonita subdivision on East Pensacola Beach. This home is a perfect example of how the oil spill is already taking a toll on the Pensacola Beach housing market. Once the seller, who lives out of state, got wind of the oil spill she immediately dropped her price to $125,000.  Not only is that $20,000 off the previous list price and the lowest price on Pensacola Beach but at just under $110 per square foot, this home is priced at nearly what the current owner paid in 2001 and one of the lowest prices per square foot in the last 10 years! The new price is significantly lower than offers we received on this home just a couple weeks back.  We're very optimistic and working hard to sell this home and we have had some recent activity, but it's still available.

We still meet homeowners who refer to home prices in "pre-Ivan" and "post Ivan" terms referencing the dramatic rise and eventual fall of prices after Hurricane Ivan in 2004. We think it's possible that owners of beach property will look back at this oil spill and do the same. There's really never been anything like so all we can do is assess the situation and take all the factors into account. We have to consider the loss of jobs for local fisherman and people that work on the beach or rely on its' resources that may have to find other jobs in town or relocate. We also expect a lot of coastal homeowners may have difficulty making mortgage payments when they're faced with loss of rental income from properties which are rarely vacant during the summer season. This could create a whole new wave of distressed property owners which could lead to more foreclosures and short sales which will only aid in decreasing prices. The question isn't if coastal property values will continue to drop but how further will they drop, and long will they stay depressed once the oil is factored into the already declining waterfront market?
No one knows for sure. We do know this crisis is making for some great opportunities for potential buyers in the meantime. Now may be the time to invest in that beach property you always wanted but couldn't afford at the escalated prices we saw just a few years back.

Sandy Blanton

Team Sandy Blanton Realty

Pensacola's #1 Realtor in 07', 08' and 09'. "I'm Not Bragging, I'm Applying For A Job. I Want Your Referrals!"

Check Out Our Websites - http://www.TSBRealEstate.com and http://www.10DayShortSales.com

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Rainer
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Stephanie Reynolds
Integrity First Financial Group, Inc. - Santee, CA
East County San Diego Homes 619-838-4408

This is such a horrible situation for the entire gulf coast. The first thing I thought of was how this was going to affect an already poor housing market. I am so sorry to hear it has already started and the damage hasn't reached land. Just what we needed. More devastation to our shaky economy.

May 04, 2010 11:38 AM #1
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456,290
Stacey Smith
Coldwell Banker - Aliso Viejo, CA
Your Orange County Beach Cities Realtor

The Gulf Coast has just had so much bad luck in the past few years, it horrible.. And with this oil spill the housing market was my 3rd or 4th concern, but just think of how it affecting the Marine Life, and the people that live in the coastal cities.. Things have to get better for them soon.

May 04, 2010 11:41 AM #2
Rainer
46,289
Sandy Blanton
Pensacola Real Estate - Team Sandy Blanton Realty, Inc. - Pensacola, FL
Pensacola Real Estate- #1 in 07null- 09null

Stephanie- I totally agree. We're optimistic that people who live on the coastline may purchase property in townwhich could help but I really don't see recovery soon for the waterfront market. Buyers have never really regained their confidence in waterfront homes since the devastation caused by Ivan... Now add this, and it's truly going to effect values in a negative way.

May 04, 2010 11:47 AM #3
Rainer
46,289
Sandy Blanton
Pensacola Real Estate - Team Sandy Blanton Realty, Inc. - Pensacola, FL
Pensacola Real Estate- #1 in 07null- 09null

Stacy- We have not been the most fortunate in recent years but we'll make it through- always do. Many people are losing jobs due to this but we're hopeful that the cleanup effort may bring many new jobs and actually boost our economy- such was the case after Hurricane Ivan. It's certainly not an ideal situation but maybe a silver lining to the cloud?

May 04, 2010 11:50 AM #4
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391,074
Nancy Timberlake
RE/MAX Shoreline - Portland, ME
REALTOR - Southern Maine

Deepest sympathy from Maine.  What a mess.

May 04, 2010 12:24 PM #5
Rainer
46,289
Sandy Blanton
Pensacola Real Estate - Team Sandy Blanton Realty, Inc. - Pensacola, FL
Pensacola Real Estate- #1 in 07null- 09null

Thanks Nancy. The local news now says we won't be dealing with oil on the beach until Thursday so we have at least a couple more days to soak up the sun from the world's whitest beaches!

May 04, 2010 02:12 PM #6
Rainer
46,289
Sandy Blanton
Pensacola Real Estate - Team Sandy Blanton Realty, Inc. - Pensacola, FL
Pensacola Real Estate- #1 in 07null- 09null

We have "threats" of other offers and verbal full price offer on the home on Calle Treviesa, closing ASAP. Should be under contract soon...

May 05, 2010 10:45 AM #7
Anonymous
Anonymous

ooops.... we spilt the oil... we spilt.

May 06, 2010 09:29 PM #8
Anonymous
Jonathan Warren

Mr. Blanton,

I can't tell you how refreshing it is to see a candid and honest assessment of the situation from someone in the field, in the area affected.  May your professionalism come back to you 1000 fold.

May 14, 2010 07:20 AM #9
Anonymous
Dan - Atlanta

I back out on a house in Gulf Breeze, that I was scheduled to close on next week because of the oil spill. I'm retired and can live anywhere. The Pensacola area was my dream retirement home but now all plans are on hold. The house will probably be back on the market for another year or more at a much lower asking price. Love the people, love the area. Dan - Atlanta

May 15, 2010 04:14 AM #10
Rainer
46,289
Sandy Blanton
Pensacola Real Estate - Team Sandy Blanton Realty, Inc. - Pensacola, FL
Pensacola Real Estate- #1 in 07null- 09null

Dan from Atlanta- I expect to hear a lot more stories like yours in the near future. We've held out with no oil on our section of the coast until now but it's just a matter of time until it becomes a real threat- right now, it's still out of sight and out of mind for many. I don't think most people realize how this could harm local property values but I truly hope I am wrong and this portion of the disaster can be averted.

May 20, 2010 08:32 AM #12
Anonymous
Vinny

Terrible situation, but it's too bad the graphic you chose for the top of the page is from the San Francisco Bay Area and has nothing to do with Pensacola....

Jun 23, 2010 01:00 PM #16
Rainer
46,289
Sandy Blanton
Pensacola Real Estate - Team Sandy Blanton Realty, Inc. - Pensacola, FL
Pensacola Real Estate- #1 in 07null- 09null

Picture has been updated... this is Pensacola beach as of today- 6/23/2010. The San Francisco Bay Area picture doesn't compare!

Jun 23, 2010 01:53 PM #17
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