Strategic Property Analytics, Inc.

A study conducted by Okmyung Bin and Jamie Brown Kruse gives insight to the question posed in the header title above. Their hedonic study looks at how flood risks affect house prices in Carteret County, North Carolina, a coastal area with flood-prone regions. Their research focuses specifically on coastal flood hazards between various flood zones. The authors cited other studies that found that flood risk lowers property values inland by 3% to 12%, the high premiums paid for coastal properties make flood insurance premiums less influential in overall market pricing. Using flood maps and property sales data from 2000 to 2004, Bin and Kruse found that when a property is located within a flood zone that is not subject to coastal wave action the property values are 5% to 10% lower. Properties in flood zones that face wave action have higher values due to their proximity to the water.

On average, accidents did not exert a significant influence on SFR property values. However, incidents resulting in adverse health effects, pollution of the environment, evacuations, or directives to seek refuge in place precipitated a discernible decline in the value of residences within a five-kilometer radius, ranging from 5% to 7%. This equated to an average reduction in property values ranging from $12,000 to $17,000. Individual buyers and sellers of properties in nearby housing markets exhibited heightened awareness regarding incidents with offsite effects compared to those solely involving onsite effects. Moreover, residences within two kilometers of a solitary RMP facility, regardless of any releases, tended to experience a property value diminution ranging from 2% to 4%, overall, on balance. Collectively, proximity to multiple RMP facilities increased the diminution, with residences within a kilometer of three RMP facilities experiencing a decrease in value exceeding 12% and those within 1 to 2 kilometers experiencing a 5% reduction.

The study's findings reveal significant effects on property values attributed to proximity to certain types of electrical transmission lines, which can vary based on geographic location. Notably, homes near 138 kV and 46 kV lines experienced statistically significant decreases in value, while those near 345 kV lines exhibited no negative impact and, in some cases, even show a slight positive effect.

Firstly, similar to existing literature on pipeline proximity, the data from compressor station case studies suggest no consistent adverse impact on nearby home prices. Prices per square foot for homes closest to the pipelines varied, sometimes even exceeding those at greater distances, emphasizing the need for location-specific analysis. Secondly, incidents such as fires or emissions at compressor stations did not necessarily lead to decreased nearby home prices across all studies, with some cases showing inconclusive results. Thirdly, when impacts on home prices did occur due to compressor station incidents, they tended to be temporary, lasting from a few months to a few years before returning to pre-incident levels.

The findings reveal that properties within the BPA are generally valued higher than those outside, in line with previous literature emphasizing the positive impact of environmental amenities on real estate prices (Cuculiza et al., 2021). However, following major wildfire events, properties within the BPA experience price decreases of approximately 0.9%–1.7% compared to properties outside the BPA, with the negative impact being significant in the first two years post-event and diminishing thereafter. Additionally, properties within the BPA with higher natural environmental amenities exhibit greater resilience to wildfire risk, indicating the importance of considering environmental factors in wildfire risk research within the housing market context.

Results show that age and the number of bathrooms are the only features reliably predicted by the model, with the HVTL easement not significantly impacting price. The statistical analysis, accounting for emotional factors in home buying, reveals that properties with the easement sold for up to 4.22 percent less than those without, consistent with similar studies.