by Broderick Perkins
The Gulf Coast's economically pivotal vacation rental playground faces a value crunch that could cost individual properties as much as $80,000 in lost value, according to the most exhaustive study to date of the Gulf oil disaster's impact on residential real estate values, reported by the HomeAway Gulf Coast Response Center
Core Logic, in a report that denotes value as real property value combined with the value associated with the amenities of beach front access, says the cost of the oil disaster to home values along the Gulf's coastal counties is expected to range from $648 million in one year, to as much as $3 billion over the span of a half decade.
The study adds beach front proximity to the value equation because buyers who acquire coastal properties pay premiums for the amenities that come with a property that provides easy access to the proverbial "day-at-the-beach."
Among the study's 600,000 properties identified as being within 1,000 meters (about a half mile) of the Gulf coast line, are an estimated 150,000 vacation rental properties representing a uniquely pivotal sector of the area's economy, according to HomeAway.com.
HomeAway.com, the nation's largest vacation rental portal of a half million privately owned listings for travelers and property owners alike recently created the HomeAway Gulf Coast Response Center to address the concerns of vacation rental owners often overlooked by mainstream media.
Largely under reported is the fact that the Gulf Coast includes a large swath of Florida panhandle vacation rental properties -- not resorts, hotels and motels -- that provide the bulk of the area's travel accommodations with direct, easy access to beaches.
Florida, among the most over speculated housing boom markets, has had one of the nation's worst housing busts and, among all states during the first half of 2010, had the third highest foreclosure rate, with some panhandle counties suffering the worst foreclosure rates in the state, according to RealtyTrac.com.
"While it is by no means a certainty that the major coastal communities along both coasts of Florida will be impacted at all by the oil spill, the lost amenity value in these markets could be particularly high," said Mark Fleming, chief economist with Core Logic.
The report examined the impact of the oil disaster on the more than 600,000 properties identified as being within 1,000 meters of the coastline in 15 counties, representing major beach travel communities stretching from the Gulf coast of Alabama to the Atlantic peninsula coast of Florida.
The report found:
The highest risk coastal communities along the Mississippi, Alabama, and Florida panhandle include more than 71,000 residential homes at risk of losing an estimated average loss in beach amenities valued between $40,000 and $56,000. The total estimated loss of beach amenities is valued at $3 billion.
Of the immediately impacted communities, the largest overall loss in amenity value would be in Pensacola ($1.6 billion), followed by Gulfport ($1.2 billion).
In terms of average loss in amenity value per home, Gulfport ($56,000) is the largest, followed by Mobile ($45,000) and Pensacola ($40,000).
If the Gulf currents take the oil to the communities along the Florida gulf coast the loss in amenity value will rise substantially. The four coastal communities along the coast (Panama City, Tampa Bay, Cape Coral, Naples) could experience a total loss in amenity value of $11 billion impacting 238,000 homes.
Even though the chances are low, Core Logic estimated the loss in amenity value for communities along the Atlantic coast of Florida as well. This includes Miami, Key West, Palm Bay, Daytona Beach, and Jacksonville. More than 295,000 properties within 1,000 meters of the beach could be affected with a total loss in amenity value of $13.5 billion.
"Our hope is that the oil spill is contained and the loss in amenity value is further moderated by a speedy cleanup and a return of beach amenities to the affected communities' homeowners," said Fleming.
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