Coastal Property Value Dynamics and Offshore Wind Development: A Hedonic Analysis of Market Responses in New Jersey

This study investigates the relationship between offshore wind energy development and coastal residential property values, employing New Jersey as a case study during the critical expansion period of 2010-2024. As the United States pursues ambitious renewable energy targets, understanding how offshore wind installations affect nearby communities' economic interests has become increasingly urgent. Despite growing policy relevance, empirical research on property value impacts in the U.S. context remains limited, creating a significant gap in knowledge that this study addresses. Employing a hedonic pricing framework integrated with a quasi-experimental difference-in-differences design and spatial econometric techniques, this study analyzes 47,832 residential transactions drawn from Zillow ZTRAX data and county assessor records across three New Jersey coastal counties. The methodology addresses spatial autocorrelation, omitted variable bias, and temporal confounders that have limited prior research. Treatment and control groups are defined based on visibility (viewshed) analysis and distance to offshore wind installations, with particular attention to the Ocean Wind 1 project. Results indicate a statistically significant negative effect of approximately 2.8% on property values for homes within the viewshed of offshore wind developments. The analysis reveals a pronounced distance-decay pattern, with effects concentrated within 15-20 kilometers of installations and dissipating rapidly beyond this threshold. Notably, temporal analysis demonstrates that construction-phase impacts peak at approximately 5.2% but attenuate to roughly 1.5% during the operational phase, suggesting market adaptation over time. Waterfront and ocean-view properties experience disproportionate effects compared to inland coastal properties. These findings contribute to hedonic pricing theory by documenting how aesthetic externalities from renewable energy infrastructure are capitalized into property values. Practically, the results inform compensation frameworks, setback policies, and community benefit agreements. The evidence suggests that while property value concerns warrant acknowledgment, they should be weighed against substantial climate benefits and may be partially addressed through thoughtful project design and stakeholder engagement. Keywords: offshore wind energy, property values, hedonic pricing, difference-in-differences, spatial econometrics, New Jersey, renewable energy externalities