Waiting after the storm: the effect of flooding on time on the housing market in coastal Virginia

Tim Komarek () and Larry Filer

Applied Economics Letters, 2020, vol. 27, issue 4, 298-301

Abstract: Flooding is the most common natural disaster experienced by many households and rising sea levels have made recurrent flooding events common in many coastal cities. This study uses a difference-in-differences model to estimate how the residential real estate market responds to significant flooding events. The analysis examines time-on-market for 137,348 residential property sales between 2007 and 2016 in southeast Virginia. This timeframe includes a Nor’easter, referred to as Nor’Ida, and Hurricane Irene. Results differentiate between high-risk (100-year flood plain) and low-risk (500-year flood plain) areas, and show that homes in the high-risk flood zones remain on the market 5–7 days longer. Our results suggest that the housing market cools down at a localized level after a severe weather event.

Date: 2020
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DOI: 10.1080/13504851.2019.1616047

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