Oil Price vs. Gulf Coast Real Estate Values

Posted by Matthew J. Welch on Wednesday, February 3rd, 2016 at 3:42pm.

Do Oil Prices Affect The Price Of Real Estate On The AL Gulf Coast? 

Let Us Analyze The Historical Price Of Crude Oil In Comparison To The Prices Of  Real Estate In Our Area At The Same Time.

When Reviewing Oil Prices vs Real Estate Prices, We Can See The Last Time Oil Was At $20/Barrel(see chart below) Our Market Was Really Starting To Pick Up. 

The Last Instance Oil Was At $20/Barrel Was Late 2001, Early 2002(The far left white shaded oval). This Is When Our Market Really Gained Traction, Then With The Help Of Hurricane Ivan, Seemed To Propel Our Real Estate Market Further Into The Stratosphere! If Hurricane Ivan Wouldn't Have Hit So Hard, Would The Market Have Went To The Heights It Did? Arguable And Debatable.

The Second Shaded Area Represents The All-Time High Of Crude Oil At $147.27/Barrel. At This Time, Mid-Year 2008, Our Market And Prices Began To Erode Away Drastically, As Did The Price Of Crude Oil Falling To $33.20/Barrell or 77% In Roughly 6-7 Months! 2009 Was The Absolute Bottom Of Our Market, But Not The Historical Low. Such As With Our Real Estate Market, The Prices Of Oil Were Significantly Lower Previously. December 1998 Recorded A 20 Year Low Of $10.65/Barrel! I Do Not Have Information Of Real Estate Prices Dating Back As Far For Comparison.

In Conclusion, Many Factors Have Contributed To The Gulf Coast Real Estate Market Rise And Fall, Such As: Easy Financing, Hurricane Ivan, The BP Oil Spill, And Potentially The Price Of Crude Oil. However, I Wouldn't Base My Theory Of Market Value On Any One Factor Solely, But Rather Take Into Account All The Factors As A Whole.

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