Volume 14 Issue 5
Nov.  2023
Turn off MathJax
Article Contents
Nekeisha Spencer. Wind and Water: How Extreme Weather Conditions Impact Residential Real Estate in Developing Countries[J]. International Journal of Disaster Risk Science, 2023, 14(5): 813-821. doi: 10.1007/s13753-023-00518-6
Citation: Nekeisha Spencer. Wind and Water: How Extreme Weather Conditions Impact Residential Real Estate in Developing Countries[J]. International Journal of Disaster Risk Science, 2023, 14(5): 813-821. doi: 10.1007/s13753-023-00518-6

Wind and Water: How Extreme Weather Conditions Impact Residential Real Estate in Developing Countries

doi: 10.1007/s13753-023-00518-6

This article is based on research done for the Interamerican Development Bank.

  • Accepted Date: 2023-10-14
  • Available Online: 2023-11-23
  • Publish Date: 2023-10-30
  • The damaging effects of extreme weather is concerning for many countries across the globe. Though the impact of these events on the housing market has been studied extensively, one aspect that remains unexplored is the value of mortgages. Further, there is no clarity on the impact of the specific types of homes. This study analyzed mortgages and apartment values and included residential land sale prices over 16 years for different localities across Jamaica. The analysis revealed that mortgages are adversely affected by excess rainfall while apartment sale prices are reduced by hurricanes but increased by excess rain. However, residential land prices remain unaffected by both events. The results point to the importance of climate adaptation for the local real estate market and property investment.
  • loading
  • [1]
    Apergis, N. 2020. Natural disasters and housing prices: Fresh evidence from a global country sample. International Real Estate Review 23: 815-836.
    Atreya, A., and S. Ferreira. 2015. Seeing is believing? Evidence from property prices in inundated areas. Risk Analysis 35(5): 828-848.
    Below, S., E. Beracha, and H. Skiba. 2017. The impact of hurricanes on the selling price of coastal residential real estate. Journal of Housing Research 26(2): 157-178.
    Beltrán, A., D. Maddison, and R. Elliott. 2019. The impact of flooding on property prices: A repeat-sales approach. Journal of Environmental Economics and Management 95: 62-86.
    Bin, O., and C.E. Landry. 2013. Changes in implicit flood risk premiums: Empirical evidence from the housing market. Journal of Environmental Economics and Management 65(3): 361-376.
    Boose, E.R., M.I. Serrano, and D.R. Foster. 2004. Landscape and regional impacts of hurricanes in Puerto Rico. Ecological Monographs 74(2): 335-352.
    Burgess, C.P., M.A. Taylor, N. Spencer, J. Jones, and T.S. Stephenson. 2018. Estimating damages from climate-related natural disasters for the Caribbean at 1.5℃ and 2℃ global warming above preindustrial levels. Regional Environmental Change 18(8): 2297-2312.
    Cohen, J.P., J. Barr, and E. Kim. 2021. Storm surges, informational shocks, and the price of urban real estate: An application to the case of hurricane sandy. Regional Science and Urban Economics 90: Article 103694.
    Collalti, D., and E. Strobl. 2022. Economic damages due to extreme precipitation during tropical storms: Evidence from Jamaica. Natural Hazards 110(3): 2059-2086.
    Collalti, D., N. Spencer, and E. Strobl. 2023. Flash flood detection via copula-based IDF curves: Evidence from Jamaica. Natural Hazards and Earth System Sciences. Discussion. https://doi.org/10.5194/nhess-2023-162.
    Cupal, M. 2015. Flood risk as a price-setting factor in the market value of real property. Procedia Economics and Finance 23: 658-664.
    Davies, R. 2016a. Jamaica - 1 rescued after flash floods in Montego Bay—More flood warnings issued. FloodList, 29 February 2016.
    Davies, R. 2016c. Jamaica—Heavy rain causes damaging floods and landslides. FloodList, 28 October 2016.
    Davies, R. 2016b. Jamaica—Floods wreak havoc on roads in northern parishes. FloodList, 12 December 2016.
    Davies, R. 2017a. Jamaica—Hundreds of homes damaged after floods in Clarendon. FloodList, 24 April 2017.
    Davies, R. 2017b. Jamaica—PM calls for change in response to extreme weather after Montego Bay floods. FloodList, 28 November 2017.
    Dudzińska, M., B. Prus, R. Cellmer, S. Bacior, K. Kocur-Bera, A. Klimach, and A. Trystuła. 2020. The impact of flood risk on the activity of the residential land market in a polish cultural heritage town. Sustainability 12(23): Article 10098.
    Emanuel, K. 2005. Increasing destructiveness of tropical cyclones over the past 30 years. Nature 436(7051): 686-688.
    Fang, L., L. Li, and A. Yavas. 2021. The impact of distant hurricane on local housing markets. The Journal of Real Estate Finance and Economics 66: 327-372.
    George, B., S. Banerjee, and R. Kumar. 2021. Determinants of impact of natural disaster in SAARC countries with special reference to india. Economic Research Guardian 11(1): 64-77.
    Gibbs, S. 2021. Assessment and cleanup efforts to start today following passage of tropical storm Elsa. https://iriefm.net/assessment-and-cleanup-efforts-to-start-today-following-passage-of-tropical-storm-elsa/. Accessed 11 Oct 2022.
    Goodman, L.S., and C. Mayer. 2018. Homeownership and the American dream. Journal of Economic Perspectives 32(1): 31-58.
    Gourley, P. 2021. Curb appeal: How temporary weather patterns affect house prices. The Annals of Regional Science 67(1): 107-129.
    Henry, M., N. Spencer, and E. Strobl. 2020. The impact of tropical storms on households: Evidence from panel data on consumption. Oxford Bulletin of Economics and Statistics 82(1): 1-22.
    Holland, G.J. 1980. An analytic model of the wind and pressure profiles in hurricanes. Monthly Weather Review 108(8): 1212-1218.
    Ishizawa, O.A., and J.J. Miranda. 2019. Weathering storms: Understanding the impact of natural disasters in Central America. Environmental and Resource Economics 73(1): 181-211.
    Ismail, N.H., M.Z.A. Karim, and B.H. Basri. 2016. Flood and land property values. Asian Social Science 12(5): 84-93.
    Keys, B.J., and P. Mulder. 2020. Neglected no more: Housing markets, mortgage lending, and sea level rise. Technical report. Cambridge, MA: National Bureau of Economic Research.
    Knutson, T., S.J. Camargo, J.C. Chan, K. Emanuel, C.-H. Ho, J. Kossin, M. Mohapatra, and M. Satoh et al. 2020. Tropical cyclones and climate change assessment: Part II: Projected response to anthropogenic warming. Bulletin of the American Meteorological Society 101(3): E303-E322.
    Komarek, T.M., and L. Filer. 2020. Waiting after the storm: The effect of flooding on time on the housing market in coastal Virginia. Applied Economics Letters 27(4): 298-301.
    Linton, L. 2021. Damage caused by heavy rains estimated at $803 million. Kingston, Jamaica: Jamaica Information Service.
    McAlpine, S.A., and J.R. Porter. 2018. Estimating recent local impacts of sea-level rise on current real-estate losses: A housing market case study in Miami-Dade. Florida. Population Research and Policy Review 37(6): 871-895.
    Miller, R.G., and N. Pinter. 2022. Flood risk and residential real-estate prices: Evidence from three US counties. Journal of Flood Risk Management 15(2): Article e12774.
    Murfin, J., and M. Spiegel. 2020. Is the risk of sea level rise capitalized in residential real estate?. The Review of Financial Studies 33(3): 1217-1255.
    Murphy, A., and E. Strobl. 2009. The impact of hurricanes on housing prices: Evidence from US coastal cities. https://www.researchgate.net/publication/46445159_The_Impact_of_Hurricanes_on_Housing_Prices_Evidence_from_US_Coastal_Cities. Accessed 11 Oct 2023.
    Mutlu, A., D. Roy, and T. Filatova. 2023. Capitalized value of evolving flood risks discount and nature-based solution premiums on property prices. Ecological Economics 205: Article 107682.
    National Library of Jamaica. 2012. History of hurricanes and floods in Jamaica. Technical report. https://jis.gov.jm/media/2021/05/History-of-Hurricanes-and-Floods-in-Jamaica.pdf. Accessed 11 Oct 2023.
    Norton, G. 1952. Hurricanes of 1951. Monthly Weather Review 80(1): 1-4.
    Ortega, F., and S. Taspınar. 2018. Rising sea levels and sinking property values: Hurricane sandy and New York’s housing market. Journal of Urban Economics 106: 81-100.
    Ouazad, A., and M.E. Kahn. 2022. Mortgage finance and climate change: Securitization dynamics in the aftermath of natural disasters. The Review of Financial Studies 35(8): 3617-3665.
    Planning Institute of Jamaica. 2004. Jamaica macro-socio-economic and environmental assessment of the damage done by Hurricane Ivan Sept 10-12, 2004. Technical report. Kingston, Jamaica: Planning Institute of Jamaica.
    Planning Institute of Jamaica. 2010. Macro socio-economic and environmental impact assessment of the damage and loss caused by tropical depression no.16. Technical report. Kingston, Jamaica: Planning Institute of Jamaica.
    Planning Institute of Jamaica. 2013. Jamaica macro socio-economic and environmental assessment of the damage and loss caused by Hurricane Sandy. Technical report. Kingston, Jamaica: Planning Institute of Jamaica.
    Rajapaksa, D., C. Wilson, S. Managi, V. Hoang, and B. Lee. 2016. Flood risk information, actual floods and property values: A quasi-experimental analysis. Economic Record 92: 52-67.
    Reyna, P. 1988. Jamaica’s premier reports island devastated by hurricane. Kingston, Jamaica: Associated Press. September 14.
    Saptutyningsih, E., and D.S. Dewanti. 2023. Measuring the economic impact of landslide hazard: Hedonic price approach. IOP Conference Series: Earth and Environmental Science 1180: Article 012048.
    Sawada, Y., H. Nakata, K. Sekiguchi, and Y. Okuyama. 2018. Land and real estate price sensitivity to a disaster: Evidence from the 2011 Thai floods. Economics Bulletin 38(1): 89-97.
    Seabrook, V. 2021. Climate change: 167 million homes could be wiped out by 2040, warns charity. Sky News, 9 June 2021.
    Smith, D., and A. Mandal. 2014. Flood risk in Jamaica: Recent damage and loss due to tropical cyclones in Jamaica. https://cdkn.org/sites/default/files/files/Floods-and-DRM-in-Jamaica-_with-policies_final.pdf. Accessed 11 Oct 2023.
    Spencer, N., and E. Strobl. 2019. Crime watch: Hurricanes and illegal activities. Southern Economic Journal 86(1): 318-338.
    Spencer, N., and M.-A. Urquhart. 2018. Hurricane strikes and migration: Evidence from storms in Central America and the Caribbean. Weather, Climate, and Society 10(3): 569-577.
    Spencer, N., and M.-A. Urquhart. 2021. Extreme climate and absence from work: Evidence from Jamaica. International Journal of Disaster Risk Science 12(2): 232-239.
    Strobl, E. 2012. The economic growth impact of natural disasters in developing countries: Evidence from hurricane strikes in the Central American and Caribbean regions. Journal of Development Economics 97(1): 130-141.
    Stull, W.J. 1975. Community environment, zoning, and the market value of single-family homes. The Journal of Law and Economics 18(2): 535-557.
    United Nations Office for the Coordination of Humanitarian Affairs. 2020. Natural disasters in Latin America and the Caribbean 2000-2019. Technical report. New York: United Nations Office for the Coordination of Humanitarian Affairs.
    van Veelen, E. 2020. The impact of hurricanes on residential property value. Ph.D. thesis. School of Electronics and Computer Science, University of Southampton, Southampton, UK.
    Vosper, E.L., D.M. Mitchell, and K. Emanuel. 2020. Extreme hurricane rainfall affecting the Caribbean mitigated by the Paris Agreement goals. Environmental Research Letters 15(10): Article 104053.
    Wei, F., and L. Zhao. 2022. The effect of flood risk on residential land prices. Land 11(10): Article 1612.
    World Meteorological Organization. 2021. Weather-related disasters increase over past 50 years, causing more damage but fewer deaths. Geneva: World Meteorological Organization.
    Zhai, G., T. Fukuzono, and S. Ikeda. 2003. Effect of flooding on megalopolitan land prices: A case study of the 2000 Tokai flood in Japan. Journal of Natural Disaster Science 25(1): 23-36.
    Zhang, L. 2016. Flood hazards impact on neighborhood house prices: A spatial quantile regression analysis. Regional Science and Urban Economics 60: 12-19.
  • 加载中


    通讯作者: 陈斌, bchen63@163.com
    • 1. 

      沈阳化工大学材料科学与工程学院 沈阳 110142

    1. 本站搜索
    2. 百度学术搜索
    3. 万方数据库搜索
    4. CNKI搜索

    Article Metrics

    Article views (33) PDF downloads(0) Cited by()
    Proportional views


    DownLoad:  Full-Size Img  PowerPoint