How Hurricanes Sweep Up Housing Markets: Evidence from Florida

Abstract

This paper studies the impact of hurricanes on housing markets and population turnover using microdata from Florida during 2000-2016. We find that hurricanes cause a temporary increase in home prices and a concurrent decrease in transactions, which together imply a negative transitory shock to the housing supply. Using mortgage application data, we find that incoming homeowners in this period have higher incomes, leading to an overall shift toward wealthier groups. Our findings suggest that market responses to natural disasters can lead to uneven and lasting demographic changes in affected communities, even with a full recovery in physical capital.

Keywords: natural disasters, housing markets, repeat sales method