While the media focus these days appears to be on whether or not the oil dispersants BP used to make the oil spill less visible were appropriately administered, there is no question on the Louisiana beachfront that the oil was and is on location in full force. One year ago, Grand Isle, a beautiful tourist destination on the Louisiana Coast, looked great and smelled even better. However, today, instead of 25 closings a month, one agent just let her secretary go because while the oil is no longer visible, you can smell the crude from miles away[1]. In fact, the same agent reports that she now has 100 homes listed and that there has been no movement in the local market – other than a couple closings that fell through – since the start of the disaster.
However, although people who live in the area may not be able to move their homes, it is unlikely that banks will foreclose on them either. Since these properties are nearly certain to sit vacant if they become REOs, lenders will hope that residents will remain in the homes if foreclosures are stalled indefinitely. Just as the smell is spreading, so is the problem, since many un-impacted housing markets are slowing while buyers assess the spread of the spill and the efficacy of the cleanup.
Would you buy in these impacted areas if you could get a really good deal, or do you think that the spill has permanently destroyed property values in these areas?
Thank you for reading! Your comments and questions are welcomed below.
[1] http://www.dailyfinance.com/story/real-estate/louisianas-beach-front-real-estate-devastated-by-oil-spill/19494748/
Just another waste land for many many years to come.
Man’s greed did it again….I’m very sad for those people dn there.
No more gulf shrimp for me…!!!
Where there is fear there is opportunity, as a real estate investor I would consider the homes in that area only if I could get renters in there to carry the note until the area recovered.Tread lightly though.
HMMM, would I buy in Louisiana now? For sure!! My very first home was on a slightly run-down side street off a main road. We could walk to everything we needed in the small city environment of Quincy Ma.and my wife had public transportation near the doorstep for her commute into Boston each day. She never owned a car at this home. Over time things improved and our purchase appreciated in value. With the savings of our low budget lifestyle we continued to purchase more properties including our retirement “nest.” To quote Grandma “this to will pass” for the gulf coast, time will heal all wounds.
Jack
I have an engineering background and am familiar with clean up of environmentally impacted property. As such, I would invest in a small area like Grand Isle if I were able to control the majority of the local properties. That way clean up could be better controlled and efficient. Also, since I am able to manage most of this my self I think that a deal with BP on these properties could be made for a cash settlement for the clean up, thus increasing profits, since this task could handled quicker and more cost effective.
Brian–what about Alabama & the pristine waters of the Panhandle of Florida-like Pensacola,Ft. Walton-Destin & Panama City?? I’d like to hear what you think & hear from property owners – investors &/or Realtors in those areas–as to the effect on Real Estate & valuations –as a direct result of the BP- Gulf Disaster! Thanks
It would depend on the discount. Having lived in southern CA for over 25 years, people continue to buy in areas that have been hit by mudslides, earthquakes, fires, etc. We have short term memories and the smell will eventually leave and prices will climb.
This is crude oil, not refined like the Valdez, by next spring most in places it will be hard to tell anything happpened.
Was it the actual oil spill or the speculation and exaggeration by the mass media and the Federal government that exacerbated the doom and gloom scenario?
Too bad the only scapegoat was the CEO of BP. I can think of several others that should have also been shipped off to Siberia…..
You would have to access the likelyhood of people wanting to rent even after the smell of crude is gone. If people think there is still a environmental issue in the area, they will move and most likely people will not be moving to that area. The question becomes for you as an investor, how long do I want to have my money tied up in this area? The next question would be once you decide that is, how much money can I make in that period? Once you evaluate those questions, then you could make a decision. Me personally, I would not invest in that area at this time, I would wait a few years and take another look. The spill just happened, we don’t know what all of the fall out is going to be.
The best investments in the world are created through this kind of market impact. While the good real estate markets we had experienced didn’t last, neither does a bad market that is created by some disaster. I know it seems like it will go on forever, but nature has been designed by one who knows how to deal with all disasters. I believe I see a good buyer’s market approaching. One should be able to purchase many of those homes and the land for pennies on the dollar.
Yes………I would buy a house in this area but it would have to be a …. good deal. The gulf will come back but it will be atleast 5-10 years and quite a few hurricanes. I am willing to wait.
CAN YOU SAY,… “GHOST TOWN”; “CHERNOBYL-LIKE, DISASTER”; “WASTE-LAND”? FORGET ABOUT PLAYING THE ROULETTE, REAL ESTATE WHEEL-OF-MISFORTUNE IN ANY OF THE GULF STATE COASTAL AREAS… IT WOULD BE A FOOL’S BET. OBAMA, BP, CONGRESS, GOVERNORS, MAYORS, ALPHABET-SOUP AGENCY HEADS, MAJOR PRINT-VIDEO-AUDIO MEDIA, SO-CALLED, BIG-NAME “CONSERVATION” GROUPS, CAPTAINS OF INDUSTRY AND RELIGION ARE ALL DISPLAYING THEIR TRUE NATURE AND HOW THEY HAVE NO MORAL COMPASS IN THEIR ABANDONMENT OF THE COUNTRY THAT AFFORDEDTHEM SUCH GREAT OPPORTUNITY TO THRIVE AND GROW INTO THE PATHETIC, APATHETIC, MALICIOUS MONSTERS THAT THEY ARE.
VOTE THEM OUT. STRIKE. STOP PATRONIZING THEM. ORGANIZE. STRIKE BACK. DEFEND YOUR FAMILIES. YOU KNOW WHO YOU ARE.