From Fireside Intentions to Housing Market Frictions: Evidence from a Major Forest Fire

Patrick Bigler, Marie-Laure Breuillé, Camille Grivault, Sébastien Houde, Julie Le Gallo and Alexandra Verlhiac

No 13103, CESifo Working Paper Series from CESifo

Abstract: We study how different parties active in housing markets react to a climate-risk shock in the form of a large and salient wildfire. We combine administrative and tracked real estate platform data and characterize a clear divergence between intended and realized adjustment due to market dynamics resulting in housing frictions. Housing supply increases substantially and prospective buyers’ interest in exposed locations is lower. Despite the resulting supply-demand imbalance, transaction and offer prices remain stable, consistent with price rigidity preventing intended sales from materializing. Instead, we find evidence consistent with some excess properties being increasingly redirected toward long-term and short-term rental markets. The results reveal an asymmetry: prospective buyers’ demand responds in a manner consistent with increased risk awareness, while owners’ asking prices adjust little. As a result, the shock induces substantial intended housing-market adjustment that does not translate into comparable spatial adjustment, with patterns consistent with market frictions and asset reallocation contributing to this wedge.

Keywords: climate risks; residential mobility; housing frictions; climate adaptation (search for similar items in EconPapers)
JEL-codes: C31 Q54 R21 R23 R31 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp13103.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_13103

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().