Chris Reid was pumped. After suffering through a few years of tight credit and the U.S. housing meltdown, the Pensacola-based realtor was ready to sell some beach-front property. Summer was coming and that is the region's busiest season.

All that changed after the April 20 explosion on BP'S Deepwater Horizon drilling rig which killed 11 people and burst an oil well, currently spewing up to 60,000 barrels of crude into the Gulf each day.

Now Reid is hoping for the best as she faces a catastrophe that threatens not only her livelihood but her way of life.

We're water people, she says of herself and husband, Robert, who moved from the mountains to be near the shore.

This is why we're here, she said, pointing at the Gulf from a vacant 13th floor condominium unit she's trying to sell for a client at the Portifino Towers on the east end of Pensacola Beach.

Condominiums that would normally be packed with summer guests are eerily vacant as people shun the once-pristine beaches that usually attract them to the region in droves this time of year.

Some rental agents say bookings are down by more than half as cancellations mount and visitors that do arrive cut short their visits in the face of health advisories, tar balls, heavy machinery and orange-vested cleanup crews brought on to keep the beaches clean.

On the sales front, coastal realtors say it's simply too early to tell what impact the BP spill will have on a market that was just getting back on its feet from a real estate bubble that burst in 2006, sending stratospheric prices back to earth.

But there are widespread concerns about the long-term effects if the spill knocks out fishing and other water-based activities that are major draws along this stretch of beach just east of the Alabama-Florida line.

Such losses affect not only property owners, but the local governments that rely on property taxes to keep the lights on.

On paper, the results are mixed. Pensacola area home sales jumped 14 percent in May from a year earlier, fueled in part by median prices that fell by 13.5 percent. Farther east in Panama City, home sales were slightly stronger, posting a 17 percent gain year over year.

Condominium sales, however, were much weaker. While condo sales in Florida shot up by 40 percent in May from a year earlier, sales in the Pensacola area fell 7 percent and they were down 17 percent in Panama City.

We were all looking forward to the summer season, Reid said. We were gearing up for what we thought was going to be a busy time. I was excited. We all thought, 'Here we go.'


Noel Faddis, owner of Realty Marts International, has been selling property in the area since 1963. He and his wife have helped develop much of Pensacola Beach. During that time, they've survived hurricanes, tropical storms and most recently the housing crisis. They were starting to hit their stride again without having to dip into reserves to make ends meet.

The oil spill changed all that.

It was just a nightmare from day one, Faddis said. What looked like a banner season has turned out to be anything but.

Instead of jammed streets and no vacancy signs, hotels are cutting deals while condominiums and time shares are eerily vacant. That's not good in a region where profits are made or lost in the three months between Memorial Day and Labor Day.

If we come in around 50 percent of what we normally do this time of year we'll be doing good, Faddis said. We're looking for BP to make up the difference.

Many condo owners use summer rental income to help pay mortgage costs and condominium fees. A dearth of renters means some owners will soon be in over their heads and have to sell or face foreclosure, a prospect unheard of only a few years ago when values were skyrocketing and the economy strong.

We have many friends here who own condos on the beach and they don't have a booking all summer. I mean it's killing them, said Barbara Summermeyer, a Pensacola summer resident.

They will lose the condos and end up going into foreclosure because they have mortgages and no rent.


And owners are not the only ones hurting. A drop in sales is prompting local governments to seek help as the ripple effect spreads quickly throughout Florida's economy, highly dependent on property taxes and other revenue derived from real estate transactions.

University of Central Florida economist Sean Snaith has pegged the economic loss from the oil spill to the state's tourist-dependent Gulf coastal economies at a minimum of $2.2 billion and 39,000 jobs. And while no one knows with any certainty what the long-term effects will be, Faddis said the results can't be good.

Hurricanes are life changing experiences but this goes far beyond that, Faddis said.

We don't know from day to day what's going to happen. The longer it spills out from the well, the worse it's going to get. If they don't get it stopped soon, it doesn't take a rocket scientist to figure out that the Gulf is going to be a cesspool of oil.

Realtors will be looking at BP to make things right. But with vacancies mounting and the oil still spewing, that too is becoming more of an unknown.

The worrisome thing for me is whether BP has the pockets that are deep enough to make everybody whole, Faddis said.

The rippling effect across the economy is staggering. I just can't imagine the amount of money it's going to take to settle these claims.

(Additional reporting by Ben Gruber; editing by Jerry Norton)