New Realtor.com® Data Highlights the Impact of Wildfire and Flood Risk on Consumer Behavior and Home Prices

Rhea-AI Summary

New data from Realtor.com reveals a shifting trend in homebuyer preferences, with a noticeable preference for homes with lower climate risks such as flooding and wildfires. Homes at low flood risk appreciate 1.5 percentage points faster than those at high risk. This gap widened to 1.7 points during the last flood season. Wildfire risk sees an even greater appreciation difference of 3.7 points. Also, 71% of recent homebuyers are considering natural disaster risks when relocating, indicating a growing awareness of environmental factors influencing home values.

Positive

• 71% of recent homebuyers consider natural disaster risk, indicating consumer awareness.
• Homes with lower climate risks appreciate faster, with significant growth rates documented.

Negative

• Moderate-to-high risk properties account for over $15.3 trillion in home value, indicating potential market vulnerability.
• Consumer interest in properties at higher risks remains in certain areas, reflecting price sensitivity.

Homebuyers show stronger demand for safer homes in at-risk areas; safer homes appreciate slightly faster than those with higher risk

SANTA CLARA, Calif., Nov. 16, 2022 /PRNewswire/ -- More than $8.8 trillion in home value is at moderate-to-high risk of wildfire and $6.5 trillion in home value is at moderate-to-high risk of flood damage over the next 30 years, according to data from Realtor.com^® and First Street Foundation. As the frequency and intensity of weather events increases, it's not surprising that consumers are taking these issues into account when looking for a home. New research released today by Realtor.com^® found that homebuyers generally show a preference for lower risk homes, which in turn appreciate at a slightly faster pace, and that the preference can be more pronounced in some areas of higher risk where awareness may be greater.

Homes with less climate risk appreciate faster
Homes with a low risk of flood damage appreciate at 1.5 percentage points faster than homes with a high risk of flood damage. During the last flood-related disaster season (July - Sept. 2021), the growth rate gap increased to 1.7 percentage points, suggesting that flood risk was top-of-mind for buyers. Homes at low risk of wildfire appreciate at 3.7 percentage points faster than homes at high risk of wildfire. During the last wildfire season (July - Sept. 2021), the growth rate gap held steady at 3.7 percentage points, suggesting that awareness may be lower for wildfire than it is for flood.

A recent Realtor.com^® survey found that 71% of recent homebuyers considered the risk of natural disasters when deciding where to move and 47% are more concerned about natural disasters today than they were five years ago. Additionally, a 2021 Realtor.com^® survey found that 34% of homeowners would consider moving or selling their home due to concerns about natural disasters.

"Our data shows that users have a small but consistent preference toward lower risk homes. Buying a home is an extremely personal decision and many people are willing to take on more risk in order to have a water view or find a more affordable property," said Danielle Hale, Chief Economist at Realtor.com^®. "Consumers are increasingly aware of the risk that wildfires and flooding can have on their home. However, it's important to keep in mind that while climate-related risk is a factor that consumers might take into account, it is one of many considerations when deciding where to live and what home to purchase."

Homebuyers weighing climate risks when shopping
Home shoppers on Realtor.com^® who interact with the flood feature tend to shift toward viewing homes with lower risk than where they began. This is especially true in Florida, Louisiana and South Carolina where consumers shift to viewing details for homes with 5-7% lower risk scores. On the other hand, users in Mississippi shift from viewing homes with lower risk to homes with a higher risk of flooding, indicating that the users are willing to take some risk to find a property that meets their needs and may be more price sensitive.

Wildfires seem to be less top-of-mind for home shoppers. In California, Oregon and Utah consumers who interact with the tool continue to look at homes with the same or similar risk scores. However, in Arizona, Florida and Mississippi, users of the tool tend to shift toward properties with higher risk, suggesting that awareness of wildfire risk might be lower than for flood or that consumers might be more price sensitive.

"We felt that it was important to add natural disaster information to Realtor.com^® to help home shoppers and homeowners better understand their risks and take preventative steps to help mitigate that risk," said Sara Brinton, lead product manager at Realtor.com^®. "In the two years since we added flood risk data to the site, it has become one of our most popular features and we're proud to be able to provide this important information to consumers so that they can make informed decisions during the home shopping process."

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^®.

Media Contact
press@realtor.com

View original content:https://www.prnewswire.com/news-releases/new-realtorcom-data-highlights-the-impact-of-wildfire-and-flood-risk-on-consumer-behavior-and-home-prices-301679503.html

SOURCE Realtor.com

FAQ

How much home value is at risk from wildfires and floods according to Realtor.com?

Realtor.com reports over $8.8 trillion in home value is at moderate-to-high risk of wildfires and $6.5 trillion at risk of flooding.

What percentage of homebuyers consider natural disaster risks when moving?

A recent survey found that 71% of homebuyers consider natural disaster risk when deciding where to move.

How much faster do homes with low flood risk appreciate compared to high-risk homes?

Homes with low flood risk appreciate at a rate 1.5 percentage points faster than those with high flood risk.

What impact does climate risk have on homebuyer behavior?

Homebuyers are increasingly favoring properties with lower climate risks, affecting purchasing decisions.

What was the appreciation gap for wildfire-risk homes during the last wildfire season?

During the last wildfire season, homes at low wildfire risk appreciated 3.7 percentage points faster than high-risk homes.