Impact of Increasing Availability of Risk Information on the Housing Market in Eastern North Carolina

Abstract

Risk information refers to the data and knowledge that helps us understand the potential dangers and consequences associated with floods and other environmental hazards. This study examines how increasing public availability of risk information influences homebuyer decision-making. Using mixed methods, the study combines quantitative and qualitative data collection and analysis. Quantitative aspects include geospatial data acquisition and analysis using descriptive statistics, Pearson correlation, and multivariable linear regression. The qualitative approach includes semi-structured interviews with real estate professionals and data analysis using descriptive and thematic coding. This research identified properties with high flood-risk scores staying longer on the market. Estimated insurance value and sale price influence the property’s time on the market. The multiple linear regression results show that the flood risk score only explains 9.3 percent (Washington City) and 3.3 percent (Elizabeth City) of the variation in time to sell. Adding other explanatory variables, such as sale price, estimated insurance value, year property was built, and building area in square feet, increased the adjusted R2 from 0.093 and 0.033 to 0.465 and 0.102, meaning that these variables explain 46.5% and 10.2% of the variation in time to sell in Washington City and Elizabeth City, respectively and improved the model’s explanatory power. Study results identified that past hazard experience, income, and physical condition of a property shapes homebuyer behavior. Climate risk, particularly the flood risk score, does not directly affect property prices in isolation; insurance costs are the primary channel through which risk influences property values. Results consistently report that buyers’ concerns focus less on risk itself and more on the financial implications of required insurance premiums. This study recommends research into the science behind risk information communicated by third-party platforms, including coordination with FEMA maps, to address misinformation and the concerns of prospective homebuyers.