Building Codes, Wind Contours, and House Prices

26 Pages Posted: 28 Mar 2012

See all articles by Randy E. Dumm

Randy E. Dumm

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law

G. Stacy Sirmans

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law

Greg Smersh

University of South Florida

Date Written: 2012

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% 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% 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.

Keywords: building code, Florida, risk exposure, hurricane

Suggested Citation

Dumm, Randy E. and Sirmans, G. Stacy and Smersh, Greg, Building Codes, Wind Contours, and House Prices (2012). Journal of Real Estate Research, Vol. 34, No. 1, 2012, Available at SSRN: https://ssrn.com/abstract=2029741

Randy E. Dumm (Contact Author)

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law ( email )

College of Business
Tallahassee, FL 32306
United States

G. Stacy Sirmans

Florida State University - Department of Risk Management/Insurance, Real Estate and Business Law ( email )

College of Business
Tallahassee, FL 32306
United States
850-644-8214 (Phone)
850-644-4077 (Fax)

Greg Smersh

University of South Florida ( email )

College of Business Administration Dept. of Finance
St. Petersburg, FL 33701
United States
727-553-1619 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
43
Abstract Views
542
PlumX Metrics