Pensacola, Florida Property Values Plummet as BP's Oil Invades

Living in paradise can be downright trying, especially if your paradise is a waterfront home in Pensacola, Florida. BP's spewing oil in the Gulf of Mexico is just one more devastating blow to homeowners.

2004 and 2005 delivered a double wallop to the Florida panhandle with two of the toughest hurricane seasons on record. Thousands of homes were destroyed by Hurricane Ivan in 2004, and many neighborhoods still haven't recovered 100%. Just as the hurricane recovery was moving along, the economy took a nosedive and rebuilding came to a screeching halt. Many panhandle homeowners told themselves to be patient; believing that better times and recovered property values were ahead when the economy picked up.

Forget About Hope

So much for that hope. With whispers of a double dip recession floating through the country, Pensacolians feel that their paradise is falling off a financial cliff. Home values are plummeting and BP's oil disaster is to blame.

John Gittelsohn, (Bloomberg) reports, " BP Plc's oil spill may drive down the Gulf Coast's shore-area property values by 10 percent for at least three years, according to CoStar Group Inc. Losses may total $4.3 billion along the 600-mile (966- kilometer) stretch from the Louisiana bayous to Clearwater, Florida, the property-information service estimates."

Read Full Story: Oil Spill May Cost $4.3 Billion in Property Values (Update2), June 11, 2010

The forecast for lost property values takes into consideration the assumption of a 10 percent loss based on previous disasters like oil spills and hurricanes. This is bad news to an already challenged panhandle area real estate market.

Double dip recession rumors, inflation, high unemployment numbers and lost property values are not only worrying homeowners; elected Property Appraisers and local governments are concerned about the dip, and the tax revenue that will be lost.

Elected Property Appraisers Look Toward BP for Payment

Darrell Preston (Bloomberg) reports, that Escambia County Property Appraiser, Chris Jones and Santa Rosa County Property Appraiser, Gregory Brown, "...are seeking permission to reflect damage to property values from the spill in tax bills property owners will receive in November."

Florida's state law allows some leeway for alteration to the value assigned to property. Waterfront homeowners may see a small tax break. So that local governments don't lose tax revenue, they intend to force BP to make up for that lost revenue.

Read full story, Florida Appraisers Ask to Cut Value of Gulf Property Hit by Oil, June 09, 2010

Suing BP for Oil Damage and Plummeting Property Values

Some homeowners aren't waiting for their local government to take the lead. A few Tampa area residents have already filed lawsuits against BP for lowering property values, and oil hasn't even arrived on Tampa's shores yet.

Elaine Silvestrini, Tampa Tribune reports, " A Clearwater couple who say the value of their waterfront home was "eviscerated" by the Deepwater Horizon oil spill are suing BP and other companies involved in the disaster.

Athanasios and Evdokia Gionis say they have owned a home on the Intracoastal Waterway with "immediate access to the Gulf of Mexico" since 1976. They say their home has suffered a dramatic loss in value and will continue to lose value as a result of the gross negligence of BP and other companies, including Halliburton Energy Services, Anadarko Petroleum Corp. and Moex Offshore 2007.

The lawsuit was one of six filed by lawyers for the Bilirakis Law Group, who are asking federal judges to designate the suits as class actions on behalf of property owners, dive business owners, hotels, restaurants, tourism-related retailers and fishermen."

Read full story here. Clearwater couple suing BP, claim oil spill devalued waterfront home, June 11, 2010

It's Ugly in Paradise

It's going to get ugly. When my property tax bill arrives, you can be sure I'll question it. My waterfront home, built to replace a home destroyed by Hurricane Ivan, is at risk to oil damage because BP's spewing oil breached Pensacola Bay and entered the intracoastal waterway. BP's oil is lurking near my inland waterway home. If I can't swim and fish in the water around my home, it certainly will drop my property value. If the wildlife we've come to love and observe everyday are decimated, what happens to the quality of life in our inland waterway neighborhood? (See a sideshow of the neighborhood here.)

If you live on the beach, and you can't swim, surf, fish or stroll along the shore, it's going to be next to impossible to sell that home without a substantial financial loss. Someone is going to pay. It should be BP.

One More Punch at Paradise

To make matters worse, we're looking the peak of the hurricane season right in the eye. This could be the knock-out punch. Things could get even uglier in paradise.

Online Sources:
Read Full Story: Oil Spill May Cost $4.3 Billion in Property Values (Update2), June 11, 2010 http://www.businessweek.com/news/2010-06-11/oil-spill-may-cost-4-3-billion-in-property-values-update2-.html

Read full story, Florida Appraisers Ask to Cut Value of Gulf Property Hit by Oil, June 09, 2010 http://www.businessweek.com/news/2010-06-09/florida-appraisers-ask-to-cut-value-of-gulf-property-hit-by-oil.html

Read full story here. Clearwater couple suing BP, claim oil spill devalued waterfront home, June 11, 2010
http://www2.tbo.com/content/2010/jun/11/111730/clearwater-homeowners-suing-bp-over-oil-spill/

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