Bloomberg reported yesterday that Miami,Ft. Lauderdale,Palm Beach and the Florida Keys face a 61-80 percent chance of the BP’s tar balls reaching their popular beaches and precious real estate. They face a greater probability of being affected because the black oil has entered the Gulf’s loop current which snakes eastward and around the tip of Florida. If the nasty tar balls arrive on the billion dollar beaches of Miami,Palm Beach and Ft. Lauderdale,the real estate market and coastal Florida economy could face a catastrophe.
The real estate market in many places along the Gulf and Florida coast has already seen up to a 32% devaluation according to Moody's and things may get even worse as buyers,developers and vacationers look for investment alternatives. There are over 4,000 operational oil wells in the Gulf and investors are wisely questioning why they should risk their financial futures to the potential of this kind of multi-decade,environmental disaster.
One place they are looking lies only 350 nautical miles across the Gulf from Florida and is protected for the foreseeable future from oil spills by the powerful northerly flow of the Gulf's loop current. This land is known as the Riviera Maya,an unspoiled 80-mile,pristine patch of Mexico’s only Caribbean coastline. Here the sand is powdery-white,the water crystalline and warm year round.
This area is similar to where Florida was in its development 40 years ago. Just a few miles south of the massive hotels and chaos of Cancun remains pristine tree-lined beaches and huge swaths of undeveloped coastline recently dubbed by Conde Nast Travel as “The Most Beautiful Beaches in the World”. This Mayan Eden is the home of the Corona commercials and is quickly becoming some of the hottest real estate investment property on the planet.
It’s all happening very fast. Only a few years ago,Playa del Carmen,the heart of the Riviera Maya,had only dirt streets but now it’s the fastest growing town in the Americas according to the Guinness Book of World Records. And the town of Tulum,30 minutes to the south,is poised to grow even faster. Savvy American and Canadian developers are now pouring millions of investment dollars into this virgin land,envisioning brand new communities with 5,000 eco-friendly,beach homes for 12,000 fellow “Gringo” citizens.
As the massive oil spill continues to flow into the Gulf towards some of the most prized beaches in the United States,one cannot help but wonder what the impact is going to be. As the tar balls arrive on Gulf beaches,already “oil impact notices” are being posted by local health officials. The notices say “pregnant women,children ages 5 and younger and people with compromised immune systems should avoid skin contact with sand and water that have been affected by the oil”.
Whatever the outcome,many investors are now contemplating and preparing for the worst,while others are hoping the expert’s predictions are off and the oil will never arrive on South Florida’s shores. Whether the tar balls make it or not,everyone now realizes how vulnerable Florida is to current and future oil disasters.