A Tar-nished Housing Market? Gulf Coast Real Estate One Year After The BP Oil Spill
This time last year, the BP oil spill was finally capped after what felt like way too long. After 86 days the oil stopped flowing, but the damage had been done. The once blue and pristine waters of the Gulf had turned into a murky mess. It begged the question – what will the long-term damage look like? Would tourism return? Would the fishing industry survive? Would the housing market crumble?
The alarmists were ringing their bells, claiming this catastrophe could set back the Gulf housing market another 7 years. The media interviewed distraught homeowners who feared the impact of the oil-tainted Gulf Coast waters.
Deep Diving Into The Data
At Trulia, we took a look at housing numbers on the Gulf Coast, and here’s what we found for the time period of February 2010 to February 2011.
Sales Volume Up…and Down?
We looked at the coastal towns and the sales volume of homes in the area (i.e. the number of homes changing hands), and here’s what we found.
Total Sales Volume
| City | Total Sales Volume |
|---|---|
| Orange Beach, AL | +17% |
| Tampa, FL | +9% |
| Panama City Beach, FL | +5% |
| New Orleans, LA | -10% |
| Fort Walton Beach, FL | -28% |
| Saint Petersburg, FL | -36% |
Remarkably, it’s not all doom and gloom along the coast. So next we took a look at how much these homes are selling for.
Median home prices staying afloat
For the same period of February 2010 to February 2011, half of the cities we examined were reporting a dip in the median sales price–but so was the rest of the country. Many of these coastal towns are hovering around the national average in home value loss.
Median Sales Price
| City | Y/Y Change % |
|---|---|
| Orange Beach, AL | +14% |
| Daphne, AL | +9% |
| Metairie, LA | +5% |
| Tampa, FL | -8% |
| Panama City Beach, FL | -10% |
| Pensacola, FL | -11% |
Foreclosure signs aren’t blocking the coastal view
We looked at all foreclosure activity along the coast, and over the past year the total number has gone down (a glimmer of hope!). But assuming that the massive loss of tourism dollars and income associated with water-based businesses hasn’t impacted foreclosure rates would be wrong.
Total Foreclosure Activity (defaults, scheduled foreclosure auctions and bank repossessions)
| City | Y/Y Change % |
|---|---|
| Daphne, AL | -43% |
| New Orleans, LA | -47% |
| Pensacola, FL | -57% |
| Fort Walton Beach, FL | -58% |
| Panama City Beach, FL | -66% |
| Tampa, FL | -70% |
It seems the slowdown in foreclosures, especially in Florida, is mostly the result of foreclosure processing delays caused by the fallout from the robo-signing controversy and understaffed courts than a housing market recovery. The other thing to keep in mind is that when there are extraordinary circumstances (like hurricanes and massive oil spills), foreclosure activity is often suspended by the lenders until the local market has a chance to recover (and until the insurance companies have a chance to figure out who gets paid for what damages). We suspect we are seeing the same phenomena here.
Bottom Line on the Gulf Coast
The BP oil spill devastated the area, bringing a massive loss of sea life, tourism dollars and the serenity of coastal living that residents had enjoyed in the past. We’re pleasantly surprised to see that (for the time being) the area isn’t succumbing to the housing market devastation that so many predicted it would see. Time will tell on the foreclosure front, but for now, it’s relatively smooth sailing.
Source: Realtytrac data for foreclosures, Trulia all other sources of data.
