The Impact of Hurricanes on the Selling Price of Coastal Residential Real Estate

Abstract We investigate the extent to which hurricanes affect the prices of residential real estate in Dare County, NC from 1999 through 2012. We find a price discount of roughly 3.8% in the 60 days following a storm. However, this discount is only temporary and becomes unobservable beyond 60 days post-storm. The discount is larger for lower quality properties and those purchased by local buyers and appears to be concentrated in inland properties. Overall, our results provide valuable insight into the pricing inefficiencies exhibited in the coastal residential real estate markets following exogenous major weather events.