How Hurricanes Sweep Up Housing Markets: Evidence from Florida

60 Pages Posted: 24 Jul 2020 Last revised: 4 Oct 2022

See all articles by Joshua Graff Zivin

Joshua Graff Zivin

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS); National Bureau of Economic Research (NBER)

Yanjun Liao

Resources for the Future; Wharton Risk Center

Yann Panassie

Government Accountability Office (GAO)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2020

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.

Suggested Citation

Graff Zivin, Joshua and Liao, Yanjun and Panassie, Yann, How Hurricanes Sweep Up Housing Markets: Evidence from Florida (July 2020). NBER Working Paper No. w27542, Available at SSRN: https://ssrn.com/abstract=3658837

Joshua Graff Zivin (Contact Author)

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS) ( email )

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National Bureau of Economic Research (NBER)

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Yanjun Liao

Resources for the Future ( email )

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Wharton Risk Center ( email )

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Yann Panassie

Government Accountability Office (GAO) ( email )

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United States

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