Zillow will provide climate risk data on for-sale listings
If you’re a prospective homebuyer and concerned about climate risk, Zillow is about to make your search much easier. By the end of 2024, for-sale listings on Zillow’s website will include climate risk information for flood, wildfire, wind, heat, and air quality by partnering with First Street, the gold standard for climate risk financial modeling. First Street’s models are developed by leading scientists and vetted through a peer-review process to transparently calculate the past, present, and future climate risk for properties and make it available for all. This ensures the climate insights given on Zillow are both credible and actionable.
Zillow will also include insurance recommendations, climate risk scores, interactive maps, and show if and when a property has experienced past climate events. It will be the first and only real estate listing site to provide this detailed data, giving the company a significant point of differentiation.
Consumer demand
Zillow decided to provide this data based on overwhelming consumer demand. Zillow research in September 2023 showed 83% of prospective U.S. home buyers consider climate risk. That percentage varies by geography—90% in the West, 85% in the Northeast, 79% in the South, and 77% in the Midwest. The average age of a U.S. homebuyer today is 39. Millennials and Gen Z are entering the home buying market and care deeply about climate. Zillow is centering their current and future users.
A potential shift in the real estate market
This data could significantly shift the real estate market and the migration of home buyers within the U.S. because climate risk is growing more pervasive. Across all new listings in August 2024, 55.5% have a major risk of extreme heat, 1/3 for extreme wind exposure, 16.7% for wildfire, 13% for air quality, and 12.8% for flooding.
The risks vary widely by geography. Over 70% of new listings in the Riverside, California metro area have a major wildfire risk. Wildfire risks impact 47% of new listings in Sacramento, and roughly 1/3 of listings in Jacksonville, Phoenix, San Diego, and Denver. 76.8% of new listings in the New Orleans metro area have a major flood risk, while roughly 1/3 in Houston, Miami, and Tampa and over 1/4 in Virginia Beach are at risk of flooding. In general, Midwest markets hold the lowest climate risk with less than 10% of new listings having any major climate risk in Cleveland, Columbus, Milwaukee, Indianapolis, Minneapolis, Detroit, and Kansas City.
Accuracy of First Street climate risk data
Some cities and the federal government through FEMA provide some climate risk information. This includes designated flood zones that help consumers partially assess risk. However, this is not comprehensive enough to help consumers holistically gauge insurance needs and potential future risks. This is where First Street’s modeling really shows its financial value.
Consider Hurricane Debby, the storm that wreaked havoc along the U.S. east coast in August 2024. First Street’s analysis found 78% of properties flooded by Debby were outside FEMA flood zones, meaning flood insurance isn’t mandatory. 85% of these properties would have received an insurance recommendation on Zillow, highlighting how First Street’s climate risk data can inform buyers during their home search.
Climate data can change where and how we build
Not only does First Street’s data on Zillow inform prospective home buyers and real estate agents; it can also serve home builders, municipalities, and the federal government. Home builders can use it to assess the value of their potential construction sites. Municipalities can use it to assess where they need to focus their infrastructure dollars for climate resiliency and adaptation builds. The federal government can use the data to re-evaluate and assess FEMA designations for climate events and more effectively consider plans to support the expansion of the available housing market. It may also help us as a society plan for migration within the U.S. as we face climate change impacts.
What I find most refreshing about Zillow’s approach is that it’s not about politics or marketing. It’s about science and data. Zillow isn’t telling consumers which property to buy, or which risks they should consider. It’s providing the data in a clear, consistent manner so consumers can make the most clear-eyed choices possible. With this data in-hand, consumers can understand the risk they’re taking and how to prepare for it. In this risky world of ours, that’s data we all desperately need.