GULF COAST PROPERTY VALUES DECLINE AFTER BP OIL SPILL
The Gulf Coast oil spill may decrease property values by 10% for at least the next three years, according to CoStar Group Inc. The estimated economic impact on the Gulf Coast may exceed $4 billion along the 600-mile coast line. The oil that continues to wash ashore will further diminish property values and harm wildlife. Moody’s Economy.com has estimated prices fell 34% from the peak of the U.S. residential real estate market in 2006.
The oil spill may cost BP $50 billion for the cleanup and reimbursements for economic damage to the tourism and fishing industries, but that doesn’t include payments for reduced property values. Costar, made its forecast for property prices assuming a 10% loss based on previous disasters, such as oil spills, hurricanes and the 1979 Three Mile Island nuclear accident in Pennsylvania.
Costar’s estimate relied on recent sales data of property within 200 feet of the Gulf waterfront and spanning 600 miles from Venice, Louisiana, to Clearwater, Florida and the analysis valued the property at about $3 million an acre or $43 billion for the entire coastline measured.