Title

What would offshore oil drilling mean to Pinellas County beaches?

There’s supposed to be crude oil reserves out in the Gulf of Mexico, not too many miles west of the Pinellas County beaches. Most of us agree that a higher degree of energy independence would be a good thing.  So, drill baby drill. Right?

People are pretty split on this issue. Those in favor of drilling say we need the oil, and we need to depend less on foriegn sources. Those against say the Gulf reserves would only produce oil for a decade or so, and an oil spill in the Gulf would foul the beaches and be devastating to Florida’s major industry, tourism. 

Polling seems to indicate that Floridians are fairly split on the issue, with the edge going to the pro-drillers.

Yesterday (that would be Feb. 14, 2010), hundreds of people turned out on the Pinellas County beaches to protest the possibility of oil drilling along the coast. Hundreds more turned out at beaches around Florida. Most of them wore black, to represent the color of crude oil.

St. Pete Beach near the Don Cesar

Anti-drillers say we need to invest in alternative sources of energy — solar, wind, even nuclear. Pro-drillers say we still need to drill in places like the Gulf to get the energy we need while those alternative sources are developed.

How do you think Pinellas County would be changed by drilling in the Gulf?

Oil drilling would create some high-pay jobs (although not a whole lot of them), and the oil that gets produced (some of it, anyway) could be refined into jet fuel which could power the planes that bring tourists to the county.

On the other hand, one good spill could foul Pinellas beaches for years to come, driving away tourists and ruining the natural habitat for many sea creatures and plants.

And what would all this mean to real estate values? (This is a real estate blog, after all).

Not a simple issue.

Tags: beaches, oil drilling, pinellas county, real estate, values

Tampa Bay real estate market: Sales up, but values down

The thing that continues to be pretty clear about the Tampa Bay real estate market is this: Home sales are continuing to make a nice comeback, but home values are still slipping and sliding.

You’d like to think that the trend of declining values is nearing the bottom. But just when we think that, another month comes along and values decline a bit more.

One good source of home value information is the S & P/Case-Shiller Home Price Index. Recent numbers from that index showed that home values in January in Tampa Bay were down 4.4 percent from the previous month. That’s a pretty steep drop for a single month, especially when you consider that the home value peak was in July of 2006, almost three full years ago.

Case-Shiller says that prices in this region (the region being Pinellas, Pasco, Hillsborough and Hernando counties) have dropped 37.3 percent in that nearly-three-year period.

So what is propping up sales when values are still going down? There’s several reasons:

GOOD PRICES: According to Case-Shiller, home prices in this area in January were just about the same as prices were in February 2004.  How often can you buy homes at five-year-old prices?

GOOD RATES: Mortgage interest rates are very, very low. How often have you seen the one-two punch of low home prices and low, low interest rates?

FIRST TIME HOMEBUYER ADVANTAGES: If you already own a home and you are either upside-down or have lost much of your equity, you’re not in much of a position to buy a move-up home. But if you are renting and don’t currently own a home, this is a GREAT time to buy. And first-timers are very much in the market right now.

TAX CREDIT: If you are a first time home-buyer (or haven’t bought a new home in the past three years), there is a big fat $8,000 tax credit out there just waiting for you.  When is the last time THAT happened?

SELLERS ARE WILLING TO NEGOTIATE: If we had already reached the bottom of the market and prices were going back up, sellers would be saying something like this: “Time is on my side. The more I wait, the higher my selling prices is apt to be. Why should I give anything away?” Instead they are saying things like this: “Prices are still going down. God knows where this is going. I NEED TO SELL! Bring me an offer, and don’t be afraid to ask for anyhing! Go ahead, try me!”

Of course buyers are in the market.

So we’ll be waiting a bit longer for that end to the home price slide. But in the meantime, homes are selling anyway.

Tags: pinellas county, real estate, sales, values

California leads the real estate value decline

All the data appears to be in, and we can now say with authority that the state with the biggest decline in real estate values for 2008 was….

(Drum roll, please….)

CALIFORNIA!

That’s right, California was the big winner (actually, loser) in the real estate downturn sweepstakes, losing 26.9 percent of its real estate value during the year. Next was Nevada, with a 22.8 percent value drop, followed by Arizona (19 percent) and then (ahem) Florida, with an 18.2 percent drop.

Values actually dropped in 35 states during 2008.

That’s the story for 2008, but what about the total drop in values since, say, the peak of real estate value in July 2006? California still leads the way with a 42 percent decline. Nevada protected its second place position with a 39 percent decline. Arizona and Florida are tied for third place at 33 percent.

If you want to look at actual metro markets rather than states, we see nine California markets leading the list, but then Miami-Dade in Florida captures the 10th spot.

Did any market actually gain value during 2008? Actually, several did. If you live in Binghampton, N.Y., you live in a place where real estate actually appreciated by 7.78%. Plattsburgh, N.Y., Cedar Rapids, Iowa, Rocky Mount, N.C., Auburn, N.Y. and Florence-Mussel Shoals, AL also did pretty well.

This data comes from First American CoreLogic, which follows real estate values across the country.

Tags: california, real estate, values