A new study has examined the negative impact on home values following an oil spill.
Using a case study from Golden Beach, Maryland, near an oil spill in 2000, the study published in the Appraisal Journal, the quarterly technical and academic publication of the Appraisal Institute, has concluded that home values dipped in the short term but recovered within two years.
The initial drop in home prices was between 10.6% for non-waterfront single-family homes, and 12.6% for waterfront single-family homes, although for waterfront homes only three properties were included in the original study published in October 2001.
In 2001, the effects of the spill were still being felt with prices lagging a forecast made before the incident by between 9.8% and 15.4%.
However, once the clean-up had concluded, there was a price surge in 2002 of 37% compared to just 5% in the rest of the country. That put the gap between the Golden Beach price increase and that of the rest of the country at its highest ever either before, or after the spill and subsequent clean up.
With almost 500,000 miles of pipelines across the US carrying natural gas, crude oil, and refined petroleum products, the authors of “A Pipeline Spill Revisited: How Long Do Impacts on Home Prices Last?” note that (168,000 barrels) of oil were spilled in more than 1,000 pipeline incidents in the last 8 years.
More market update: