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The aftermath of the April 20 oil spill is playing out in different ways around the Gulf Coast. Practitioners from the region tell how they're adapting to the new realities.
September 1, 2010
Randy McKinney was feeling great about the way 2010 was shaping up. The broker-owner of Realty Executives in Gulf Shores, Ala., says his first quarter numbers were well above those of last year. From January to April 2010, his Baldwin County real estate market was up 21 percent over the same time period in 2009, with 1,235 units sold totaling more than $245 million in sales.
Then came April 20 and the Deepwater Horizon oil rig explosion, 50 miles from the Louisiana coast. The news was bad—11 workers killed—and within days, it became even worse. Oil was gushing from the sunken rig at a rate first estimated at 1,000 barrels a day. Later, that estimate went up to 5,000 barrels and then 25,000 barrels a day.
There are roughly 11,000 REALTORS® living and working in communities physically touched by the spill. For them—and for REALTORS® in nearby communities who depend on the oil industry—the tense weeks following the Deepwater Horizon explosion were a time of watching and wondering: Will the oil reach our community? How long will it take to get the gusher under control? How long will it take us to recover? And what will happen to our livelihood in the meantime?
In the tiny southern Louisiana town of Grand Isle, La., it took just a couple of weeks for the smell of oil to hit the air and not long after that for tar balls to begin washing up on the beach. For McKinney, 150 miles away in Alabama, "It really didn’t hit home until the first week in June when the oil hit our beautiful white sand beaches."
Nationally, the real estate business was moving at a good clip in June. NAR reported a 9.8 percent increase in existing-home sales compared with June 2009, thanks in large part to the federal tax credit. For practitioners in some parts of the Gulf Coast, by contrast, 20 percent declines were the norm. The NATIONAL ASSOCIATION OF REALTORS® surveyed Gulf Coast members between July 6 and July 14, and received 3,788 responses about the oil leak’s impact on housing transactions; a large number reported losing sales as a result of the spill.
Oil Spill's Impact: Percentage of REALTORS® reporting one or more lost sales (as of mid-July).
- Alabama 68%
- Florida 61%
- Louisiana 48%
- Mississippi 64%
- Texas 29%
"The full impact of the oil spill won’t be understood for years," says NAR chief economist Lawrence Yun. "Certainly we know it’s going to be negative. We already know there are fewer people going to the region, whether to purchase a home or for retirement, which will hold back economic activity locally."
On a positive note, the deluge of oil has been at least temporarily resolved—relief wells were expected to be completed by the time this story went to press. Remarkable progress has been made on the cleanup, and many beaches are open. And Gulf Coast practitioners are facing up to life after the spill and doing what they can to allay the fear that’s been keeping buyers and tourists at bay.
Since May, REALTOR® Magazine has been talking with practitioners all along the Gulf Coast. In June, we visited the region. Here are reports on the spill’s impact on four communities:
Updated: May 23, 2019