Zillow adds climate risk scores to property listings – Marketplace

Assessing Climate Risks in Real Estate: Zillow Adds Climate Hazard Information to Property Listings

When Leslie Watson and her husband were searching for their first house in the San Francisco Bay Area, they had a few priorities. They wanted an enclosed backyard for a dog and a spare room for playing video games. Also on the wish list: low climate risk.

“The main thing that I was the most concerned about was the flooding, because there are a lot of creeks that run through the area,” Watson said.

Watson is especially aware of the risks. She’s a high school science teacher whose classes address the climate crisis.

“My opinion is, if you’re looking for a home now and you’re not considering climate risks, you’re not really very in touch with what is happening,” she said.

Climate Risk Information for Home Buyers

Home buyers now have more tools to assess those risks. This month, Zillow, the country’s largest real estate search platform, announced it’s adding information about climate hazards, and how they might grow over time, to all of its property listings. Users will be able to scroll down to see a risk score for flooding, wind, wildfire, extreme heat and air quality, along with insurance recommendations to protect against related losses.

“There is a rising need for a buyer to have this information when they approach the market, and honestly a seller, in order to appropriately understand how to price and list their building,” said Skylar Olsen, Zillow’s chief economist.

Impact of Climate Risks on Home Buyers

In a recent customer survey, the company found that more than 80% of potential home buyers said they consider climate risk in their decisions. More than half of new listings on Zillow are at risk of extreme heat, Olsen said. Meanwhile, 17% face major wildfire risk and 13% major flooding risk — risks scientists say will continue to grow as average global temperatures rise.

The data comes from First Street, a climate risk modeling company, which also provides its risk scores to Redfin, Realtor.com and Homes.com.

Insurance Prices and Availability

First Street founder Matthew Eby said home shoppers can now also get detailed reports from the company, showing how insurance prices and availability might change over time.

“That’s really what’s impacting consumers these days,” Eby said. “It’s the most visual and dollars-and-cents way that people are realizing the impact of climate change.”

On average, the price of homeowners insurance rose by more than a third between 2020 and 2023, and by more than half in high-risk areas, according to research by Benjamin Keys at the Wharton School.

“Insurance is an annual contract, and oftentimes home buyers would think that whatever they paid last year is what they’ll pay next year,” Keys said. “What we’ve seen over these last few years is that’s simply not the case.”

Models aren’t perfect at predicting where those costs will go, Keys said, but even a rough idea will help home buyers make better decisions about what — and where — they can afford.

Real-Life Example

“That would have been very nice to have when I was house hunting this year,” Watson said.

She and her husband ended up buying a place in San Leandro, California, and they did pretty well with the information they did have.

According to Zillow’s newly added climate information, their house faces minimal flood and fire risk — one out of ten, according to First Street’s scale. The biggest risk was air quality — seven out of ten — but that didn’t surprise Watson. They’re near an industrial area and the Oakland airport.

“Places that we could afford were generally like this one,” she said.

Conclusion

With the increasing awareness of climate risks, it is crucial for home buyers to consider these factors when making decisions. Zillow’s addition of climate hazard information to property listings provides valuable insights for buyers and sellers. By understanding the risks associated with flooding, wind, wildfire, extreme heat, and air quality, individuals can make informed choices and take necessary steps to protect their investments. This aligns with the Sustainable Development Goals (SDGs), particularly SDG 11: Sustainable Cities and Communities, which emphasizes the importance of resilient infrastructure and sustainable urbanization.

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SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action

The article discusses the importance of considering climate risks when buying a home and how real estate platforms like Zillow are providing information on climate hazards. This aligns with SDG 11, which focuses on creating sustainable cities and communities. Additionally, the article highlights the impact of climate change and the need to address it, connecting to SDG 13, which aims to take urgent action to combat climate change and its impacts.

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
• SDG 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.

The article emphasizes the need to assess climate risks when buying a home to protect against potential losses caused by disasters. This aligns with SDG 11.5, which aims to reduce the economic losses caused by disasters. Additionally, the article highlights the importance of resilience and adaptive capacity to climate-related hazards, connecting to SDG 13.1.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Percentage of potential home buyers considering climate risk in their decisions
• Percentage of new listings at risk of extreme heat, major wildfire risk, and major flooding risk
• Percentage change in the price of homeowners insurance

The article mentions that more than 80% of potential home buyers consider climate risk in their decisions, indicating the level of awareness and consideration of climate risks. It also states that more than half of new listings on Zillow are at risk of extreme heat, and a certain percentage face major wildfire and flooding risks. These indicators can be used to measure progress towards SDG 11.5 and SDG 13.1. Additionally, the article highlights the increase in homeowners insurance prices, which can be another indicator of progress towards SDG 11.5.

Table: SDGs, Targets, and Indicators

Source: marketplace.org