Real Estate Agents Want BP Payback
"I'm hearing from them constantly." That's what Kenneth Feinberg, the administrator of a $20 billion oil spill compensation fund, told members of Congress.
Them? Real estate agents and brokers. "They make a credible argument," he adds.
I saw it myself in Pensacola, even before one tiny tar ball had hit the beach.
It is far far worse at the heart of the mess.
An already struggling real estate market in the Gulf of Mexico basically ground to a halt, and isn't moving, even with that precarious cap currently holding the oil back.
When I spoke with a real estate investor in Florida last month, he told me that some condo investors were already getting checks from BP , although I have no proof of that. The real estate industry, including agents, investors, landowners, and even mortgage brokers, have been hard hit by the spill, no question. But real estate agents are an interesting force.
"The Realtors and real estate brokers are a major political force," Feinberg told the House Judiciary Committee. While he doesn't work for BP or the Obama Administration, Feinberg clearly knows the power of the real estate lobby, and I'm guessing Gulf state lawmakers know it as well.
"He estimates that oceanfront land in Florida sells on average about $3 million per acre...and you factor a 10 percent drop in prices due to oil, that's $4.3 billion."
I guess I'm just wondering if their power in Washington will or should bump them to the front of the line. I did recently see a news report about how the oil, even when "cleaned up" stays in the land for decades to come.
An analyst at CoStar, a commercial real estate information company, recently did some math, calculating the estimated 569 miles of coastline affected and the fact that the damage probably goes inland about an acre. He comes up with just over 14 thousand acres potentially touched by oil. He estimates that oceanfront land in Florida sells on average about $3 million per acre (obviously other Gulf states could be less), and you factor a 10 percent drop in prices due to oil, that's $4.3 billion.
That's not just a loss in value but a loss in sales commissions for the folks that help others to buy and sell that land on a regular basis.
Am I crying for the real estate agents/brokers? Not exactly. I'm not sure where you put them in the line of fishermen, restaurant owners, retailers, hotel owners, and other Gulf Coast business folks.
I do know that Realtors have the 13th largest industry lobby behind them in the National Association of Realtors, which also happens to be the top spender on lobbying in the industry. Kenneth Feinberg is not a member of Congress, nor is he a politician; he's an independent lawyer/mediator. Prior to taking on the BP fund, he was best known for heading up the September 11th Victim Compensation Fund.
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