Environmental Determinants of Housing Prices: The Impact of Flood Zone Status
This study examines the valuation of homes located within 100-year flood plains. Utilizing a database of 29,887 property transactions in Alachua County, Florida, the results of this investigation suggest that comparable characteristic homes located within a flood zone sell, on average, for less than homes located outside flood zones. Interestingly, the price differential is less than the present value of future flood insurance premiums. In addition, the price differential is shown to have increased since passage of the National Flood Insurance Reform Act of 1994. Finally, it appears that property tax assessors have slightly over-assessed properties located in flood zones relative to those in other areas. The large database and the lengthy period of analysis (1980â€“1997) are much broader than that of previous research efforts.
Volume (Year): 21 (2001)
Issue (Month): 1/2 ()
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References listed on IDEAS
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- Michel Glower & Donald R. Haurin & Patric H. Hendershott, 1998. "Selling Time and Selling Price: The Influence of Seller Motivation," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(4), pages 719-740.
- Terrance R. Skantz & Thomas H. Strickland, 1987. "House Prices and a Flood Event: An Empirical Investigation of Market Efficiency," Journal of Real Estate Research, American Real Estate Society, vol. 2(2), pages 75-83.
- Shilling, James D. & Sirmans, C. F. & Benjamin, John D., 1989. "Flood insurance, wealth redistribution, and urban property values," Journal of Urban Economics, Elsevier, vol. 26(1), pages 43-53, July.
- Benson, Earl D & Hansen, Julia L. & Schwartz Jr., Arthur & Smersh, Greg T., 1998. "Pricing Residential Amenities: The Value of a View," The Journal of Real Estate Finance and Economics, Springer, vol. 16(1), pages 55-73, January.
- Gatzlaff Dean H. & Ling David C., 1994. "Measuring Changes in Local House Prices: An Empirical Investigation of Alternative Methodologies," Journal of Urban Economics, Elsevier, vol. 35(2), pages 221-244, March.
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