How Hurricanes Sweep Up Housing Markets: Evidence from Florida / Joshua S. Graff Zivin, Yanjun Liao, Yann Panassie.

Format:

Book

Author/Creator:

Graff Zivin, Joshua S.

Contributor:

National Bureau of Economic Research.

Liao, Yanjun.

Panassie, Yann.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27542.

NBER working paper series no. w27542

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

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.

Notes:

Print version record

July 2020.