Realtor.com® Equips Consumers with More Data to Evaluate the Potential Impacts of Climate Risks on Their Home
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Insights
The introduction of Heat Factor™, Wind Factor™ and Air Factor™ by Realtor.com® represents a significant advancement in how consumers can assess climate-related risks when making real estate decisions. By incorporating data from First Street, a climate technology company, these tools offer a granular view of the potential impact of extreme weather conditions on property values. This is particularly relevant given the valuation of homes at risk—$19.7 trillion, which is a substantial portion of the U.S. housing market.
From a climate risk perspective, these tools could influence market dynamics significantly. Properties in high-risk zones may see decreased attractiveness to buyers, possibly leading to a decrease in property values and a shift in investment patterns. Insurers and lenders might also adjust their risk assessments based on this data, affecting insurance premiums and mortgage rates. Furthermore, the data could spur infrastructure investments aimed at mitigating these risks.
However, it's important to consider the potential for data misinterpretation. Consumers may not fully understand the implications of a given score without proper guidance, which could lead to misinformed decisions. Additionally, the long-term accuracy of these predictive models is contingent upon the quality and comprehensiveness of the underlying climate data, which is subject to change as new research emerges.
The data provided by Realtor.com® on climate risk factors introduces a new variable into the real estate valuation equation. Areas like Miami, San Francisco and others listed with high-value properties at risk could experience a restructuring of the real estate market. Investors and homebuyers might become more cautious, leading to a shift in demand towards areas with lower climate risk scores, potentially inflating prices in these 'safer' regions.
Additionally, the new climate risk scores could become a negotiating factor in real estate transactions. Sellers in high-risk areas may need to invest in resilience measures or adjust prices to maintain competitiveness. On the flip side, this transparency empowers buyers to make better-informed decisions, possibly leading to a more efficient market in the long term.
It's also worth noting that the real estate market is closely tied to local economies. As such, a decline in property values due to increased risk could have a ripple effect, impacting property tax revenues and the availability of funds for public services. This underscores the importance of adaptive strategies by local governments in response to changing climate risk landscapes.
The quantification of climate risks for properties is a critical development for the insurance industry. With $19.7 trillion in home values at stake, insurers are likely to leverage this data to refine their underwriting processes and price policies more accurately. The differentiation of risk on a property-by-property basis, rather than by broader geographic regions, enables a more nuanced approach to risk management.
For the insurance sector, this could mean a shift towards customized insurance products that reflect individual property risks. However, this might also lead to higher premiums for properties in high-risk areas, potentially making insurance unaffordable for some homeowners and creating areas of 'insurance deserts'.
Furthermore, the insurance industry may advocate for building codes and standards that improve resilience against extreme heat, wind and poor air quality. This proactive approach not only mitigates future claims but also promotes sustainability and long-term viability for both the industry and homeowners.
New research shows
"Realtor.com® currently offers users an in-depth look at fire and flood risks. When you consider the percentage of American homes, and the value at risk, against factors like extreme heat, air quality and wind, it was imperative for us to deliver more robust and comprehensive climate risk information to our users," said Mausam Bhatt, Chief Product and Technology Officer, Realtor.com®. "It's important for people to fully understand the climate risks that a home faces not only in the present, but in the future, so they can make the most informed decision for one of the biggest purchases and investments they will make in their life."
Climate Risk | Value at Risk | Share of Homes Affected |
Extreme Heat | 32.5 % | |
Extreme Wind | 18.1 % | |
Air Quality | 9.0 % |
2024 Realtor.com Climate Risk Report
Realtor.com® uses First Street's models that calculate property-level climate risk to present digestible, easy to understand information for its users. Home buyers and sellers can now more fully understand the climate risk associated with a property through maps illustrating exposure to risk factors. They can toggle between factors to see how a particular risk may affect the home's area in the present and over time, showing current exposure to risks and the expected change for each risk in 15 years, and in 30 years, the length of a typical mortgage.
Across the
More Ways to Evaluate How Climate Risks May Affect Homes
- Through Heat Factor™, users can access property-level information that displays a heat risk score between 1-10 (minimal to extreme). They can see how many days the property area experiences a heat index (measured as temperature and humidity) at or above the local definition of a "hot day" and they can see the average high "feels like" temperature in the typical hottest month, today and 30 years into the future. In 2024, approximately
32.5% of homes in theU.S. , valued at nearly$13.6 trillion - Wind Factor™ assesses property-level risk measured as the chance a property will be exposed to wind gusts exceeding 50 mph at least once, and scores it from 1-10 (minimal to extreme), today and 30 years into the future. This year, approximately
18.1% of homes in theU.S. , valued at nearly$7.7 trillion - Air Factor™ assigns a property-level air risk score from 1-10 (minimal to extreme) and shows consumers the expected change in poor air quality days (Air Quality Index over 100), today and 30 years into the future. Approximately
9.0% of homes in theU.S. , valued at nearly$6.6 trillion
Access to climate risk information including extreme heat, wind, and air quality are now available on for-sale homes listed on Realtor.com® and will be coming soon to rental properties. For more information, visit realtor.com/environmental-risk.
Metros With the Most Share of Home Values at Severe or Extreme Heat Risk*
Metro | Share of Value at Risk | Total Value of Homes at Risk |
100.0 % | ||
100.0 % | ||
100.0 % | ||
Charleston-NorthCharleston, SC | 100.0 % | |
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
99.6 % | ||
99.4 % | ||
99.2 % | ||
99.0 % | ||
98.9 % | ||
97.3 % | ||
92.1 % | ||
86.8 % | ||
82.6 % | ||
79.7 % | ||
77.9 % | ||
72.3 % | ||
59.9 % | ||
54.5 % |
*For metros having
Metros With the Most Share of Home Values at Severe or Extreme Wind Risk**
Metro | Share of Value at Risk | Total Value of Homes at Risk |
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
100.0 % | ||
Tampa-St.Petersburg- | 100.0 % | |
71.0 % | ||
51.3 % | ||
51.0 % |
**For metros having
Metros With the Most Share of Home Values at Severe or Extreme Air Quality Risk***
Metro | Share of Value at Risk | Total Value of Homes at Risk |
100.0 % | ||
100.0 % | ||
Spokane-Spokane | 100.0 % | |
100.0 % | ||
99.9 % | ||
99.9 % | ||
Boise City, ID | 99.7 % | |
99.4 % | ||
98.2 % | ||
76.8 % | ||
61.4 % |
***For metros having
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
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SOURCE Realtor.com
FAQ
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