Abstract
- Hurricanes impact home values, the willingness of home-buyers to purchase homes and the overall housing market. The goal of this article is to examine data from the Cape Fear region of North Carolina, an area at elevated hurricane risk, to answer the question: Does the market become “forgetful” after a period of unprecedented hurricane activity or do elements of the market’s measured fear of hurricane exposure become embedded in local home prices? This article reports that home values and buyer sentiment are clearly impacted by the storms and that the market recovered far more slowly following Hurricane Floyd in 1999 than with three earlier storms. Buyers and sellers seem to develop an aversion to the risks in the area after four hurricane landfalls in as many hurricane seasons, and are slow to become “forgetful.” However, in time, sentiment returns to normal, and homebuyer willingness to buy is restored.