Agents along the U.S. Gulf Coast are reporting a dramatic surge in buyers backing out of deals of what used to be prime beachfront real estate. Oil globs are washing up on the shore and the smell alone is enough to drive the locals back into their homes, let alone new homeowners.
The real estate forecast for the Gulf was forecasting to be on track as the best year since Katrina hit in 2005. Now though since the BP Oil spill accident, sales have nearly halted agents say. Foreclosure rates were already consistently the lowest in the country, and Mississippi and Louisiana have mortgage rules unlike most states, but this new problem has sellers wondering what they can do.
Everything from fishing, tourism and oil rig workers will be battling with their mortgages for months since they’ll have little to no work. Which in turn means higher foreclosure rates and falling rates while banks will try to make their money back any way that they can.
Most homes on the sandy beaches are estimated to be worth around $400K but there’s no telling how much buyers are willing to pay for those properties when oil globs start washing up on their doorstep. Some analysts examined past natural disasters such as hurricanes and previous spills and decided that prices would likely drop by about 10%.
Even some seasonal retirees that vacation during colder months are cancelling trips that they usually take at this time of the year from the north.
BP has stated that they would honor “legitimate” claims to compensate victims and residents that have been affected by the spill, but that does little to ease the worries of Gulf Coast locals if their $3 million dollar property is suddenly only worth $150,000.
Contributor, designer & admin for JohnHart Gazette.
