Zillow just launched a timely and important feature on their platform—climate risks and the insurance costs associated with that risk. “Climate risks are now a critical factor in home-buying decisions,” Skylar Olsen, chief economist at Zillow, said in a statement. “As concerns about flooding, extreme temperatures and wildfires grow — and what that might mean for future insurance costs — this tool also helps agents inform their clients in discussing climate risk, insurance and long-term affordability.” With extreme weather events such as Hurricane Helene and now Hurricane Milton expected to cause destruction, it’s never been more important to know how likely your property is to be harmed by climate disaster. Here’s how the new feature works.
RELATED: Top 10 Disaster-Prone Cities.
Present and Future Danger
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Zillow is partnering with climate modeling company First Street to show prospective home buyers the risk of current and future climate disaster, divided into the following categories: flood, wildfire, wind, heat and air quality. The data is shown for 15 years and 30 years into the future, to correlate with typical mortgage lengths.
New Flood Maps
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More than 80% of prospective homeowners consider climate risk when it comes to buying a new home, according to Zillow. Flood risk was the most concerning. “A lot of people think that they are safe from flood if they’re not in a FEMA flood zone, and that’s decidedly not true. Heavy rainfall can affect many, many people across the country, and there’s no indication from the FEMA flood zone designation that that is a risk for you,” Ed Kearns, chief science officer at First Street, tells CNBC. “We’ve created these new flood maps that do bring that into account, that will allow consumers to make that informed choice about whether they need flood insurance.”
Real Estate Pricing Adjustments
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Yes, the new information is likely to impact home prices. “I think that’s going to be the most direct impact of having scores on homes that quantify risk is that there may be some direct impact on real estate values, but a lot of that is going to go through the amount of insurance necessary to cover that home,” Kearns says.
RELATED: 39 Facts About Storms You Need to Know.
Younger Buyers More Concerned
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According to Zillow, younger buyers are more worried about the environment specifically, with 39 being the median age of home buyers today. “Climate risks impact where most prospective buyers shop for a home,” says Zillow senior population scientist Manny Garcia in a release. “While all generations juggle trade-offs like budget, floor plans and commute times, younger home shoppers are more likely to face another consideration: They want to know if their home will be safe from rising waters, extreme temperatures and wildfires.”
Breakdown Across the U.S.
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According to Zillow, certain parts of the country are more worried about climate disaster than others. “A clear majority of prospective buyers in each region of the United States consider at least one climate risk when shopping for a home,” Zillow says. “People in the West are most likely to report climate risk as very or extremely impactful in their home search, followed by those in the Northeast. On the flip side, one-third of Midwestern and Southern shoppers say climate risks are not very impactful or not at all impactful to their real estate journey.”