After the Deepwater Horizon oil rig exploded in April 2010, it soon became clear that the oil gushing out of the blown-out well could amount to one of the worst environmental disasters the country had ever seen. The sheer volume and scope of BP’s oil spill almost guaranteed that it would continue to harm the Gulf Coast for a long time to come. We’ve heard about the ecological destruction, the illness, the out-of-work fishermen and charter boat operators, the shuttered seafood distributors and restaurants, the struggling tourism industry, and greatly diminished revenues. Now, tens of thousands of Gulf Coast residents will be harmed yet again in the form of major home value losses.
According to Housing Predictor, a study of home sales in Louisiana, Mississippi, Alabama, and Florida’s Gulf Coast found that so far, home values dropped an average of 15 percent “as a direct result of the BP oil spill.” The spill has also exacerbated the home-foreclosure crisis on the Gulf Coast, “with tens of thousand of people losing employment as a result of the mess,” Home Predictor says.
The Home Predictor study also found indications that the oil spill may continue to haunt the Gulf Coast for a long time to come. “Oil slicks lying at the bottom of the ocean in the Gulf Coast region wash ashore as far away as the Florida panhandle during major storms. The oil, once sunk by dispersants used by BP clean-up work crews is troubling local residents and contributing to growing health problems among workers and local residents, including lung problems,” the Housing Predictor report says.
Because so many people have lost their jobs and homes as a result of the oil spill and have been forced to leave the area, foreclosure rates along the Gulf Coast have soared, forcing the value of other properties down even further. Housing Predictor says that the situation is especially critical along the immediate coast, “where thousands of homes have lost more than 65% of their value.”
The report also says that BP’s oil spill hit just when Gulf Coast communities were emerging from their real estate slump, thanks to the federal government’s buyer tax credit. The tax credit and the already-low home prices started to create a mini boom that was immediately reversed once the Deepwater Horizon exploded and contaminated the Gulf of Mexico with 206 million gallons of oil.
Homes up to a mile further inland have experienced a major drop in value as a result of the oil spill, and resort property values are expected to drop a further 20 percent, Housing Predictor says.