The paper studies the effects of climate change on housing search. Using data on the Italian real estate market, it investigates the consequences of an increase in the number of days with extremely high temperatures for online and physical searches for residential properties, for realized transactions, and for asking prices in the biggest Italian cities.
The occurrence of very high temperatures reduces the number of searches for properties (leading to increased time to sale and a decline in transactions) and redirects buyers' preferences towards homes that are better prepared for extreme temperatures (with high energy efficiency and outdoor spaces where people can cool down during heat waves). The result is a persistent decline in sellers' asking prices for homes deemed less suitable and in average prices within cities overall.
