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Building Codes, Wind Contours, and House Prices

Author

Listed:
  • Randy E. Dumm

    () (Florida State University)

  • G. Stacy Sirmans

    () (Florida State University)

  • Greg T. Smersh

    () (University of South Florida)

Abstract

A hedonic pricing model estimates the effect on house prices of the stricter 2002 Florida Building Code for three geographical areas with varying degrees of risk exposure in the Jacksonville, Florida area. Results show that houses built under the new, stricter code sold for an average premium of 12.33 percent relative to houses built under the less-strict code. Results also show that new-code properties in the riskiest Windborne Debris Region sold for about 4.7 percent more than houses built under the older, less strict code. The interior zones show that houses built under the stricter code sold for greater premiums. The post-catastrophe variables show that the two consecutive seasons of devastating hurricanes in 2004 and 2005 had an effect on buyer behavior and generally increased the building code premium.

Suggested Citation

  • Randy E. Dumm & G. Stacy Sirmans & Greg T. Smersh, 2012. "Building Codes, Wind Contours, and House Prices," Journal of Real Estate Research, American Real Estate Society, vol. 34(1), pages 73-98.
  • Handle: RePEc:jre:issued:v:34:n:1:2012:p:73-98
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    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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