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Florida Property Market Hurt by BP Oil Spill, Dropping Euro - 24 June 2010

Fears that the catastrophic Gulf Coast oil spill will hit Florida shores are hindering overseas property sales there, real estate experts are saying.

Property sites have reported that search numbers for the Sunshine State were down by 16 percent last month, while interest in European destinations continued to rise, nearing a 25 percent increase in searches for Spain.

Some experts are saying that European investors are shifting their interests away from American properties because the euro is failing, and therefore, aren’t able to get the most for their money across the Atlantic. However, with homes so under-priced in Florida — repossessions make up more than 50 percent of the properties for sale there — determined investors could typically overlook the poor exchange rate, experts say, knowing that values will eventually soar.

In Jacksonville, where home prices fell by 4 percent last quarter, €250,000 will buy a 3,500-square-foot house with five bedrooms and four baths. Some South Florida condos are going for under €100,000.

Area realtors say that sales have all but stalled on the Florida coast because potential buyers are taking the “wait and see” approach in the wake of one of the greatest oil spills in history. If the property market continues to drop off in Florida, the state plans to seek compensation from the oil company BP for the lost tax revenue caused by lower values, which could mean millions of dollars for each county along the Gulf.

Though foreign interest in the most popular American state has dwindled, realtors are reporting that overseas investors are looking to buy in other east coast hot spots like Chicago and New York.

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