Sinkholes and Residential Property Prices: Presence, Proximity, and Density

Spatial amenities, along with structural characteristics, affect residential property values. Although the bundle of structural characteristics is typically the primary value determinant, studies have shown that externalities and risk factors can adversely affect property values. We use residential...

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Bibliographic Details
Published in:The Journal of real estate research 2018-01, Vol.40 (1), p.41-68
Main Authors: Dumm, Randy E., Sirmans, G. Stacy, Smersh, Greg T.
Format: Article
Language:English
Subjects:
Air pollution
Censuses
Density
Earthquakes
Economic models
Energy economics
Externality
Flood insurance
Homeowners
Houses
Housing prices
Hurricanes
Insurance premiums
Landfill
Outdoor air quality
Prices
Property values
Proximity
Real estate
Risk factors
Sales
Service stations
Sinkholes
State court decisions
Stone
Underground storage
Variables
Water quality
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Summary:Spatial amenities, along with structural characteristics, affect residential property values. Although the bundle of structural characteristics is typically the primary value determinant, studies have shown that externalities and risk factors can adversely affect property values. We use residential property sales data from 2010 to 2014 and sinkhole data from “sinkhole alley” in Florida to examine the effect of sinkhole presence, proximity, and density on the sale price of residential real estate. Using a spatial error regression model, the results show that sinkhole proximity and sinkhole exposure (density) create a negative externality and both have a significant negative effect on house prices. While the results show a negative effect of having a sinkhole on the property, those results are not statistically significant.
ISSN:0896-5803
2691-1175
DOI:10.1080/10835547.2018.12091491