In Texas the Coast is Clear

Homes along the immediate path of the Gulf Coast oil leak are forecast to decline at least 30% in value as a result of the environmental catastrophe produced by British Petroleum’s gushing oil well 42-miles off of Louisiana, according to a new forecast by Housing Predictor.
Gulf Coast Florida

The forecast is being issued after more than a month of research and monitoring the impact of the oil leak, which has poisoned the eco-system along the marshes of the Louisiana coast line and as far east as Alabama. Housing analysts contend that the projected losses in housing value will top that of any oil disaster in the nation’s history and will send tens of thousands of additional homes into foreclosure as a result.

The forecast covers the states of Louisiana and Mississippi, and does not yet include other states along the Gulf coastline. The projection includes immediate waterfront properties and will be updated as the direction of the massive oil blob becomes more definitive.

See housingpredictor.com/gulf-coast-homes.html

Fake BP Public Relations Twitter Account a Viral Hit

After oil started spewing into the Gulf of Mexico following the BP oil rig explosion almost a month ago, a Twitter account launched purporting to be BP’s public relations group, @BPGlobalPR.

The account, which offers dark, satirical commentary about the spill and cleanup efforts.

See http://twitter.com/bpglobalpr

Florida (Reuters) - Heavier concentrations of oil from the gushing Gulf of Mexico leak have begun sloshing up on Florida seashores as the state ramps up its effort to keep its coastline clean.

U.S.

Tar balls and crude oil "mousse" entered into Perdido Bay in northwest Florida on the border with Alabama late on Wednesday, prompting state and local officials to step up skimming operations before the gooey mess taints delicate spawning areas.

A variety of fish spawn there, including red snapper, grouper and speckled trout, and Alabama's primary oyster beds are in the same area as well.

GULF SHORES, Ala.—Real-estate broker Bruce Alexander walked into the Gulf of Mexico on Friday morning and turned to look at the video camera as a clean-up crew began hunting for tar balls nearby on the sugar-white sand.

"We're going to have some oil on the beach. I don't want you to freak out,'' said Mr. Alexander, 64, aka "Bruce at the Beach,'' who has been uploading almost daily dispatches on YouTube for more than a month after the massive Deepwater Horizon spill started scaring away tourists.

"If you're coming down to head to work on your tan or your new mystery novel, everything's fine down here,'' added Mr. Alexander as his wife, Paula, a manager at a local gift shop, held the camera.

It's all hands on deck in Alabama beach communities such as Gulf Shores and Orange Beach, where locals have battled for weeks to convince potential visitors the beaches were still clean and that they shouldn't cancel their trips.

That battle is growing increasingly difficult as more oil washes up on the state's coast, threatening to deliver a huge blow to beach towns that earn most of their money from the millions of tourists who rent condominiums, eat at restaurants and buy souvenirs at stores between Memorial Day and Labor Day each year.

On Saturday morning, a 500-yard-long stretch of beach on Gulf Shores was blanketed in brown, gooey oil. Work crews began piling the spill into garbage bags with shovels and rakes as tourists looked on in dismay. Some other parts of a 32-mile-long span of Alabama beaches abutting Florida also were hit with oil, a bit more than a week after small tar balls began washing ashore here.

"This is not what we expected,'' said Clint Pope, 27, who drove his family to Gulf Shores from Thomasville, Ala., Friday for a weekend at the beach.

Jerry Patterson
Texas General Land Office
June 7, 2010

AUSTIN -- Reports of birds washing up on Texas shores covered in sludge from the Deepwater Horizon spill are false, Texas Land Commissioner Jerry Patterson said today.

“No birds -- or any other wildlife -- on the Texas coast has been affected by the Deepwater Horizon spill,” Patterson said. The slick, he said, is still more than 100 miles east of the Sabine River.

Stories of the non-existent oiled birds were carried on broadcasts nationwide, after an Associated Press story reported their deaths.

The source of the mistake has been tracked back to a clerical error in a Sunday report from the cleanup’s Louisiana headquarters.

“Everyone is looking for an impact, everyone is looking for these birds, but they are just not there,” Patterson said. “This is a good example of what happens when you combine federal bureaucracy with a hysterical media.”

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 stretch from the Louisiana bayous to Clearwater, Florida, the property-information service estimates.

“It’s just another blow to an already depressed real estate market,” Norm Miller, CoStar’s vice president of analytics, said yesterday in a telephone interview from San Diego. “The best thing you can do if you’re in real estate in this area is bide your time, don’t panic and don’t try to sell in this environment.”

Falling real-estate values are one consequence of the worst environmental disaster in U.S. history as oil keeps gushing from a BP well once pumped by the Deepwater Horizon rig.

Costar, based in Bethesda, Maryland, made its forecast for property prices assuming a 10 percent loss based on previous disasters, such as oil spills, hurricanes and the 1979 Three Mile Island nuclear accident in Pennsylvania, Miller said.

His estimate relied on recent sales data of property within 200 feet of the Gulf waterfront and spanning 600 miles from Venice, Louisiana, to Clearwater, Florida.

The analysis valued the property at about $3 million an acre, or $43 billion for the entire coastline measured, he said.

Costar’s loss estimate aligns with a projection for southern Louisiana and Mississippi property values by Arthur Sterbcow, an independent real estate broker and analyst in New Orleans. Sterbcow forecasts values in that area will fall 5 percent to 15 percent in the next 12 months.

“It could be 20 percent in some areas,” Sterbcow said in a telephone interview. “Every day I’ve had to revise my numbers negatively.”

Sandy Sharpe, a Realtor in Destin, Florida, said buyer concern about the spill’s effect on property values in her area began soon after the April rig explosion. By the end of the month, a customer backed out of a $215,000 contact for a condominium across the street from the beach.

“He was paying cash and ready to buy and then started asking: ‘How protected am I if oil comes on the beaches?’” Sharpe, 48, said in an interview today. “He basically was terrified about the oil.”

Tourist Losses

Hotels and restaurants may have trouble making mortgage payments if tourists avoid the area during the peak summer season, said Don Epley, director of the center for Real Estate at the University of South Alabama in Mobile, Alabama.

“The defaults will start happening in early fall,” Epley said. “You can directly attribute those to the oil spill.”

Occupancy in Florida Gulf Coast motels increased 7.2 percent from May 1 through May 29 compared with a year earlier, according to Jan Freitag, vice president of global development at STR Global, a travel research company based in Nashville, Tennessee.

The increase may be attributed to visitors “frontloading their vacations to be at the beach while there still is a beach,” Freitag said June 9.

St. Joe

St. Joe Co., which owns 578,000 acres (234,000 hectares) in northwest Florida, including about 130 miles on the Gulf Coast, has seen its stock fall 35 percent since April 29, when Jindal declared a state of emergency. The company has built protective booms and taken aerial photos and soil samples as evidence in case it files damage claims with BP, Jacksonville, Florida-based St. Joe said in a June 8 statement.

The disaster has led to the closing of about 78,300 square miles (203,000 square kilometers), or almost a third, of federal waters in the Gulf of Mexico to fishing, the National Oceanic and Atmospheric Administration reported June 7. A six-month moratorium on offshore drilling will shut 33 deepwater rigs in the Gulf, costing as many as 20,000 jobs by the end of next year, Louisiana Governor Bobby Jindal wrote in a June 2 letter to President Barack Obama.

“It would be the knockout punch the Great Recession didn’t deliver,” Jack McCabe, a real estate analyst in Delray Beach, Florida, said of the oil spill. “If oil hits the beaches, there’s no way to quantify the devastation.”

Sharpe, the Florida Realtor, said she’s worried about the value of her own home.

“I’m two blocks from the beach,” she said. “I have a mortgage. Who is going to buy my house now?”

John Gittelsohn in New York at johngitt@bloomberg.net.

How to Mitigate Cancellations from the Gulf Coast Oil Spill

If you’re a vacation rental owner along the Gulf Coast, securing new bookings may be a big concern - but you might also be concerned about your existing reservations. Many of your guests might be calling in the coming weeks with questions about the condition of the beaches, their upcoming stay, and your cancellation policies.

The key to handling these questions is to be reassuring and speak confidently. Make a plan for how to handle questions before you start receiving these types of phone calls. You don’t want to stammer and leave your guests questioning their decisions.

Here are some helpful tips for responding to questions about the oil spill:

* Be transparent. Your guests are likely to have a lot of questions about their upcoming stay, and understandably so. Being evasive will only make your guests unsure about their decision to rent. Instead, you’ll want to make yourself available, be patient and speak directly. Perhaps even beat your guests to it by calling them first with updates about the condition of the beaches and referring them to trusted sources. Many of the chambers of commerce along the Gulf Coast have posted information on their websites, so you can refer guests to those sites (and visit yourself for your own talking points).

* Focus on the current state of the beaches. Much of the doom and gloom your renters may hear on the news is pure speculation. At the same time, though, you can’t guarantee that something won’t happen by the time their vacations roll around. So to start, you’ll want to remind them that the beaches are still open, reassure them about their current conditions, and perhaps even offer testimonials from guests who have stayed in your home over the last couple of weeks.

* Don’t overpromise. No one knows what the outcome of the oil spill will be in the coming months, so you can’t guarantee that the beaches will be left unscathed. It’s perfectly fair to provide updates on the current state of your beaches, but it’s also okay to be truthful about your own concerns, too. Guests will appreciate your honesty.

* Talk up your area. For renters who have doubts about going through with their vacation, try to offer suggestions for other area activities. Remind them that there are plenty of other goings-on to keep them entertained during their getaway.

* Reconsider your cancellation policy. We’ve always been big proponents of the strict cancellation guidelines, but in light of this situation, you might consider being more flexible with your refund policy. When prospective renters are nervous about the oil spill, a stringent cancellation policy will only help to convince them not to book. While we don’t advise that you impose no penalties for cancellations, you can strike a balance that’s fair to both you and your renters. For example:

If the beaches close and your guests decide not to come at all, you might issue a full refund minus an administrative fee.

If the beaches close after your guests arrive and they decide to leave early, you might issue a refund for any unused nights.

If there is oil on the beach prior to your guests’ arrival and they decide to come anyway (or if it happens during their trip and they decide to stay), perhaps offer a percentage refund on the rental fee for the days the beach is closed.
Remember, these are just examples of cancellation policies. You should review and modify these policies to work best for your vacation rental.

* Follow up with any cancelled guests. If you have already had some guests cancel their bookings for this summer, try checking back with them. Your guests might have assumed the worst when they cancelled and could now be regretting their decision since the oil hasn’t reached the shore. Give them a call or send them an email with any available dates you still have to see if they’d like to rebook.

* Claim your losses. Although we hope our advice will help keep your upcoming reservations on the books, you might still experience some cancellations. If you’re considering filing claims against your homeowners insurance or with BP directly, it’s important to exercise due diligence before rushing into a claim.

Consult an attorney before signing any documents. The effects of this oil spill could be long term, and you don’t want to give up your rights to any future claims.

Keep meticulous records in order to prove any real or projected losses. Be armed with paperwork from previous years’ bookings.

Contact BP’s toll free claims number at 1.800.440.0858 where a live person can issue a claims number.

Beware of scammers. Reports say that claims adjusters have been calling people and offering to file on their behalf for a fee. However, BP’s adjusters do not require you to pay.

Consider other options like independent attorneys and HOAs forming class action lawsuits.

When disasters like this occur, there are no hard and fast rules to which we can all adhere. It’s important to put yourself in your renters’ shoes while creating a plan that works for everyone involved.