Gulf Coast Homes Expected to Lose $56K in Value on Average


BP Gulf Oil spill is a disaster for homeowners, tooThe unprecedented BP oil spill disaster just got worse, thanks to the estimated $56,000 drop in home value that every homeowner on the Gulf Coast could experience. As reported in Bloomberg BusinessWeek, the estimate from CoreLogic could seriously impact home values for residents of Gulfport, Miss., Mobile, Ala., Pensacola, Fla. and other communities in the Gulf region for years.

More than 600,000 properties -- from Alabama to Florida's Atlantic Coast -- may be affected by the BP oil spill. The counties with the most severe damage -- Harrison, Miss., Mobile, Ala. and Escambia, Fla. -- have approximately 71,000 homes with greatly diminished value.

BP is reimbursing homeowners for property damage under the Oil Pollution Act of 1990. This framework for compensation includes property losses. Home value reimbursements will be made on a case-by-case basis by Kenneth Feinberg, the Washington attorney tapped by BP and the Obama administration.
The severity of the property-value destruction may rest on the potential for lingering doubts about the Gulf's ability to recover, environmentally and economically, from the oil spill. Oil damage is still evident 20 years after the disastrous Exxon Valdez spill in Alaska's Prince William Sound, reports MSNBC.

The drop in Gulf property values could wipe out the premium that some homeowners paid for oceanfront views. Equally disturbing, the spill's catastrophic damage may affect future buyers' perceptions of the area and its long-term investment potential.

Avila Beach, Calif., might offer a glimpse into the time and money necessary for the recovery of property values, though it's one small town affected by a comparatively small oil spill. Avila Beach suffered an underground oil spill 10 years ago as a result of leaking pipes, tanks, and underground oil transported by Unocal. Nearly three city blocks were razed in order to clean the contamination. Thanks to massive money and upgrades, the town is experiencing an economic regrowth. But, Avila Beach is still trying to rebuild its economy outside of the tourist season, reports the San Luis Obispo Tribune.

Attracting new residents and tourists is key to maintaining property values, particularly in beachfront communities.

New Orleans resident Paul Poupart isn't very optimistic about homeowners' recovering their losses, and may echo sentiments of those in this situation: "The people who lose out will probably have to eat it and smile because BP will pull out and disappear paying out as little as possible. They can't look to the Feds to help them out. They are inefficient and don't really care. We learned this from Katrina."


More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.


************************************************

Want to learn more about home buying and home finance? If so, you won't want to miss
our online discussion with industry experts,
"What Works Now: Smart Moves When Buying a Home,"
created by AOL
Real Estate in participation with Bank of America Home Loans.
Watch it now on AOL Real Estate.

Reader Comments (5)

5 Comments / 1 Pages

 

Add Your Comments


Please keep your comments relevant to this blog entry.Email addresses are never displayed, but they are required to confirm your comments. When you enter your name and email address, you'll be sent a link to confirm your comment, and a password. To leave another comment, just use that password.


To create a live link, simply type the URL(including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted - no need to use <p> or <br> tags.


Compare Mortgage Rates

Mortgage Rates by Zillow