Gulf Oil Spill Update: Housing Prices Suffering Too

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As BP tries to stop and mop up the worst oil spill in U.S. history, the Gulf coast is about to face it's busiest holiday weekend of the year: Memorial Day. Thus far, the white-quartz beaches of Florida's Emerald Coast are pristine and the water is crystal clear. Schools of fish dance just offshore. But homeowners, developers and realtors along the coast worry, and with good reason: Rentals are off by 30 percent and the already-flat housing market has taken yet another hit.

"There was a lot of bad press when it first happened," says South Walton realtor Jonathan Roberts. "As a result, there were some rental cancellations. And if you're selling a house now, all this means you have to drop your price a little more."
At the end of April, homeowners and resorts saw an influx in calls for cancellations, says Tracy Louthain, director of communications for the Beaches of South Walton Tourist Development Council.

"That's when we got aggressive in getting the word out, saying, 'Hey don't cancel, the beaches are untouched,' " says Louthain, "That's when the cancellations calmed down."

That may also be why Florida Gov. Charlie Crist asked BP for $35 million for an ad campaign to promote Florida tourism and real estate; Crist got $25 million.

The spill could not have come at a worse time. On May 23, the new Northwest Florida Beaches International Airport opened to inaugural flights and a huge celebration. The airport, says Louthain, is a beacon of potential revenue. Tourism is South Walton's number one industry and visitors spend $1 billion in the area annually. The housing industry comes close behind: second and vacation homes, rental incomes, rental and management companies and accompanying services. The real estate slump already has resulted in job layoffs and a flat market.

"There for awhile," says Roberts, "It looked like a whole summer would be gone."

It still could be, depending on when the well is finally capped and the oil contained.

Panhandle residents are also livid over the way BP and the federal government have handled the crisis, says Roberts: The feds have let BP take control and are not listening to local residents coming up with creative, natural ways to absorb the oil. The oil booms, he says, are only 90 percent effective.

Tar balls tend to stick to hay. So Mike Atkinson, the Walton County sheriff, came up with "the hay plan", a method to spray hay from local farms into the oil, let the hay absorb it, then scoop the concoction with a net and drag it back to shore for disposal. This would be a pre-emptive measure: catch the oil before it hits the beach.

No, said the Florida Department of Environmental Protection.

"They said they'd rather clean it up," says Roberts, "when it hits the beach."

In Louisiana, oil has begun washing up to the shore and killing marine life. Residents here, too, reportedly are furious over lack of leadership, delays and failure to provide timely protection for marshes and marine life.

One thing seems clear: No matter where the oil eventually beaches, people will be ordering far less "fresh Gulf shrimp" off the menu. Though Louthain says seasonal seafood is still plentiful, some visitors to the region have noticed less fresh fish being offered at Destin restaurants. Worried about their income and properties, most Floridians now want to see a ban on offshore drilling.

Roberts says he can foresee a move by the Florida legislature to block offshore drilling in the near future. But he doesn't expect to see a similar request out of Louisiana.

"The folks in Louisiana really depend on offshore drilling for a living," says Roberts. "You can have 500 people on a rig, but there are 1,500 people in support industries for that rig onshore."

A Texas woman who recently visited Destin, Fla., drove back to Dallas through Mississippi and Louisiana, which were eerily quiet, she said. In fact, about the only thing making noise these days are e-mail bleeps and telephones. They are hopping with e-mails and calls from attorneys rubbing their hands together over this spill for their cut of the deal.

One blog commenter advised swimmers to keep a log or journal on the beach, write down dates and times you were in the water in case you become sick, later, as has happened to some cleanup workers.

"The lawyers are really excited about this," says Roberts, who recently got a call from the same San Francisco law firm that handled the Exxon Valdez spill. "They want us to jump on the lawsuit bandwagon."

But a settlement, says Roberts, could take years.

Just like the cleanup.

See more homes for sale in Florida at AOL Real Estate.
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