subject: Real Estate Market Takes A Dive As Oil Continues To Drift [print this page] The economic decline in the tourism industry is just one of many problems for communities along the Gulf shorelines. As more jobs are jeopardized due to the large drop in sales, people are unable to pay their mortgages. Fearing the contamination, thousands upon thousands of vacationers have cancelled their summer rentals. Real property owners now find themselves in the hole as their property values continue to decline on the residential and commercial market with less potential buyers and renters lining up to invest.
Real estate markets may take a substantial hit across the Gulf coastline in the near future. If people arent losing their properties, theyre losing its values. Hundreds of thousands of people in Louisiana, Alabama, Florida, and Mississippi coastlines are already worried about the losses on their real property investments caused by the oil spill. Many were already in the process of selling and now are finding potential buyers scarce. Unwilling to settle for less than what theyve paid, property owners find themselves in a financial cul-de-sac. It would appear as though most people dont want to buy property near an area that could be contaminated with oil in just a span of a few weeks. Even after the oil has been cleared, those properties may still be associated with the contamination.
Dauphin Island, Alabama has already felt the real estate setbacks as over $400,000 in rentals have already been cancelled due to the oil spill. Banks and developers are now also scared of making any further investments in developments in the affected areas. The lack of tourists leaves the commercial real estate industry a target, yet again. Hotels and other vacation rental locations were already in the process of revitalization after Hurricane Katrina, but now must face the negative impression left by the oil spill. Commercial real estate may face vacancies as tenants are unable to pay for rent.
A survey conducted by GNO, Inc. showed that approximately 54 percent of businesses along the Gulf are expecting to be financially impacted by the spill. Of that 54 percent, 53 percent reported that they will need assistance in recovering their losses. This outside assistance could include attorney retention to file a claim against BP.
During a Senate hearing held this month, BP American President Lamar McKay remained vague. Never straying far from previous statements, McKay recanted his statement that BP will pay for all legitimate claims. Of course BP has yet to specify what they feel does constitute a legitimate claim. Answering uncertainty with more uncertainty, home and property owners face an uphill battle with BP that they may not be able to do alone without the right legal assistance.
