We estimate the effect of 33 derailments involving hazardous materials on property values in New York State between 2004 and 2013. Difference-in-differences analyses show that, on average, a derailment depreciates housing values within a one-mile radius by 5%–8%. The prices of affected properties return to pre-accident levels after about 480 days. In addition, we find that the impacts of derailments on property values are limited to the local area. These results provide evidence for evaluating the economic costs of rail transportation to nearby communities and for considering policy options in the current era of U.S. energy transformation resulting in substantial increases in the rail shipment of fuels.