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How Hurricanes Sweep Up Housing Markets: Evidence from Florida

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  • Joshua S. Graff Zivin
  • Yanjun Liao
  • Yann Panassie

Abstract

This paper examines the impacts of hurricanes on the housing market and the associated implications for local population turnover. We first characterize the post-hurricane equilibrium dynamics in local housing markets using microdata from Florida during 2000-2016. Our results show that hurricanes cause an increase in equilibrium prices and a concurrent decrease in transactions in affected areas, both lasting up to three years. Together, these dynamics imply a negative transitory shock to the housing supply as a consequence of the hurricane. Furthermore, we match buyer characteristics from mortgage applications to provide the first buyer-level evidence on population turnover. We find that incoming homeowners in this period have higher incomes, leading to an overall shift in the local economic profile toward higher-income groups. Our findings suggest that market responses to destructive natural disasters can lead to uneven and lasting demographic changes in affected communities, even with a full recovery in physical capital.

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  • Joshua S. Graff Zivin & Yanjun Liao & Yann Panassie, 2020. "How Hurricanes Sweep Up Housing Markets: Evidence from Florida," NBER Working Papers 27542, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:27542
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    2. Liao, Yanjun (Penny) & Mulder, Philip, 2021. "What's at Stake? Understanding the Role of Home Equity in Flood Insurance Demand," RFF Working Paper Series 21-25, Resources for the Future.
    3. Perugia, Francesca & Rowley, Steven & Swapan, Mohammad, 2023. "Improving Australian climate change adaption strategies: learning from international experience," SocArXiv mjw8y, Center for Open Science.

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    More about this item

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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