The vast majority of real estate brokers, agents and appraisers doing business on or near the Gulf Cost say they’ve seen little physical property damage from the Deepwater Horizon oil rig spill, but nearly one in four say it’s had a negative impact on their market.
A survey of 1,000 Gulf Coast real estate professionals by data and valuation firm Clear Capital found only 3.2 percent have seen any physical property damage.
But 23.8 percent reported negative impacts on their market, and more than half of those said home prices were down by 5 to 15 percent.
Coastal areas of Alabama and the Florida panhandle had the highest concentration of physical property damage and saw the greatest drops in home sales and property values, Clear Capital said.
In Mobile, Ala., home sales were down 25 percent in June from a year ago, and Panama City, Fla., saw a 32.5 percent decline in sales volume.
Many markets around the country have seen a decline in sales following the expiration of the federal homebuyer tax credit, however, making it difficult to assess how much of the slowdown can be blamed on the spill.
Markets inland from the coast that support the oil and seafood industries, including the greater New Orleans and Houston markets, also reported a slowdown in real estate activity, with real estate professionals attributing the slowdown to rising unemployment.
Sales in the greater New Orleans market were down 12.7 percent in May compared to the same time a year ago, and down 37.9 percent in June.
The spill’s impact on home values in 15 coastal counties along the Gulf of Mexico could total $3 billion over five years, according to a report published last month by property data aggregator CoreLogic.
Real estate agents who talked to Inman News for a story published in June said that in addition to the actual impact on housing values in areas affected by the spill, they expected to be battling public perception for years to come.
Clear Capital’s study also found that public perception and uncertainty over the oil spill’s long-term impacts is seen as a factor to contend with in markets not directly impacted by the spill.
Real estate agents in St. Petersburg, Fla., told Clear Capital the water and beaches were clean, but that the stigma of the spill was having a negative impact on home sales. While sales were up 18.3 in March and 16.8 percent in April from 2009, June saw an 8.8 percent year-over year decline, the report said.
In Naples, Fla., one real estate office that usually receives five out-of-state customer inquiries per week was receiving only one call every other week after the spill occurred, the report said.
The changing nature of public sentiment regarding the spill "will undoubtedly drive market changes," Clear Capital said. "If the public gains confidence in the cleanup and capping efforts, and if drilling moratoriums are lifted, the renewed confidence could lead to a surge in homebuying activity."
