Modeling Real Estate Market Responses to Climate Change in the Coastal Zone

Changing flood risks threaten the value of billions of dollars worth of coastal real estate as well as the viability of coastal communities. This paper presents an agent-based model to capture some of the main features of the housing market that emerges from interactions between autonomous buyers and sellers. We use this model to investigate the adaptive responses of real estate markets to changing patterns of flooding and alternative flood insurance policies. The model includes interactions among households and government through land use regulations, property tax collection and dissemination of flooding risk information. We use detailed data from a flood-prone coastal community in New Jersey, USA to calibrate our model.