Alabama Real Estate Already Suffering From Oil Spill

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Alabama Real Estate Already Suffering From Oil Spill

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As thousands of gallons of raw crude continue to gush from 5,000 feet below the surface, states that border the Gulf of Mexico are feeling the many effects. Alabama's coastal real estate market was starting to improve before the spill. However, May's total dollar value of sales along Alabama's coast was the lowest on record.

Sales in May were off 17 percent from April and over 11 percent from May 2009. According to data from the Baldwin County MLS the drop from April to May was the first time that has happened since 2002. Tom Brander, publisher of the Rudulph/Brander Monthly Area Real Estate Report called the impact of the oil spill a "crisis of unprecedented proportion."

For several months preceding the spill the coastal market was showing signs of recovering. Condos and beach homes, many with steep discounts, had turned the area into a real estate bargain hunter's paradise. That all changed on April 20th when an explosion rocked the Deepwater Horizon drilling rig.

Usually a sign of a recovering market, inventory levels of properties for sale are coming down. But don't be too optimistic. Many property owners have simply decided not to list their property with all the unknowns surrounding the spill.

The oil spill has also caused closings to be delayed or fall through altogether. Some buyers, once the extent of the spill was becoming clear, backed out in May. A few investors are taking advantage of the low prices and buying anyway. But people who rely on rental income to sustain their property aren't buying.

A number of coastal Alabama rental communities say vacation bookings are down 40 to 50 percent from last year. For owners who are getting vacation cancellations, a Realtors group is assisting them in contacting BP to file claims. For owners losing rental income, money from BP's fund will hopefully help defray costs.

The impact from the oil spill will be felt for quite some time and the full impact on coastal Alabama real estate is yet to be seen.

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Tags: • communities • suffering • alabama • low prices • beach homes • gulf of mexico • bargain hunters • property owners • real estate market • coastal real estate • oil spill • real estate •

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