Homeowners beware: A new study reveals the BP oil spill will be toxic for real estate.
As if the real estate market wasn’t bad enough, a new study shows Gulf Coast residents could lose $3 billion in property values thanks to the BP oil spill.
The data comes from CoreLogic, a business analytical firm based in Santa Ana, Calif. The firm released a survey on Aug. 2, estimating the financial impact of the DeepWater Horizon oil spill on area real estate prices. Numbers are expected reach $648 million this year, and $3 billion within the coming five years.
Government estimates say that between 41 million and 120 million gallons of oil have spilled into the Gulf this summer from the BP oil spill.
Despite recent news BP finally capped the leak, any adverse changes or further oil drift around the Florida Keys and up the East Coast could hike potential Gulf Coast real estate losses to $28 billion over the next five years, CoreLogic says.
CoreLogic estimates there are 600,000 residential properties from the Gulf Coast in Mississippi to the East Coast of Florida, all within 1,000 meters of the coastline. Those properties are at the greatest risk for a significant loss in real estate value, the data reveals.The worst-case scenario, which hasn’t happened yet, would be if coastal homes experienced a rash of beach closings, or if oil washed ashore near their homes (which actually happened in some coastal regions like Mobile, Ala.).