The issue of the oil gushing into the Gulf of Mexico after the big explosion of the deepwater horizon rig has cause insane trauma. On that issue, it was said that the explosion was either due to the negligence on the part of companies or regulators, or the shortcomings in current operating procedures and regulatory structures. The oil spill has affected the beachfront and the condominiums of the place.
The specific incident has affected more on the sales of those. In the case of the beach town in Mexico, the sales taken from the tourists filling the place was affected. And the same as those on the beach businesses, it has also affected the restaurants and boutique of the place. The other was the vacation homes where the sales and rentals have declined. There has been an estimation of the value on property. The value would drop at least ten percent on the average, over the following seven years of the oil spill. And this would imply that there could possibly be a decline on the market of the real estate. The value of property was estimated by Mr. Miller, an economist at a University in San Diego and part of the CoStar Group Inc. as a vice president for analytics. He made it after studying the sales of the shoreline property nearing the Gulf of Mexico.
It was stated that the transactions has really declined like what had happened to some. Even if these beaches were cleaned, one would not think there will be people purchasing down the place. This refers to the shoreline properties that were affected by the oil spill on the Gulf. I guess this would relate to the story of Ms. Swanson. At the time when the oil spill has happened already, she saw condominiums that are sold far less than $290,000 of which he had agreed to pay. Thinking about the place, she became worried about paying the mortgage. She was worried that she might not be able to rent the apartment for her to pay the mortgage. And another thing is that it is possible that the condominium would be worth less than the amount that she has invested. Gulf coast real estate market is not doing good no matter how you look at it.
Steve Warren, Swanson’s broker has lost other sales for real estate. In his common transactions for the last 20 years, he usually could close three or four transactions a month. Unfortunately, in the last three months, there were none. That situation would clearly elaborate the possible effects to the investing people. Like her, she worry too much about what the worth would the property is having. And it is hard to invest on one thing that may not assure you of any compensation. There has been a depression on the real estate market. The spill has affected the most especially on the economy. The last two years of the economy before the spill happened was then somehow successful because of the foreclosures and short sales that were there. The drop of the economy has been tremendous and it has scared the tourists from visiting the place.
