Zillow, the largest real estate site in the United States, removed a feature that allowed people to see a property's exposure to the climate crisis after complaints from the industry and some homeowners that it was hurting sales.
Last September, the online real estate market introduced the tool shows the individual risk of wildfires, floods, extreme heat, wind and poor air quality for the 1 million properties listed there, explaining that “climate risks are now a deciding factor in home-buying decisions” for many Americans.
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But now Zillow has removed the climate index following complaints from real estate agents and some homeowners that the ratings appear arbitrary, cannot be challenged and are hurting home sales. The complaints included complaints from the California Regional Multiple Listing Service, which oversees the database of real estate data that Zillow relies on.
Zillow said it remains committed to helping Americans make informed real estate decisions as listings now include outbound links to the website First Streeta climate risk quantitative analysis nonprofit that provided Zillow with a tool for on-site work.
Matthew Eby, founder and chief executive of First Street, said removing climate risk information means many buyers will be “flying blind” in an era when worsening exposure to extreme weather is distorting the U.S. real estate market.
“The risk doesn’t go away; it just moves from a pre-purchase decision to a post-purchase responsibility,” Eby said. “After a flood, families discover they should have purchased flood insurance or, after a sale, find that fire insurance is unavailable or unavailable in their area.
“Access to accurate risk information before purchasing is not just helpful; it is necessary to protect consumers and prevent lifelong financial consequences.”
Eby said the move to remove First Street's ratings from Zillow comes as the real estate industry struggles, with a shortage of affordable housing and recurring climate disasters forcing insurers to raise premiums or even leave states like California.
“All of this adds to the pressure to close sales as best we can,” he said. “The climate risk data didn't suddenly become inconvenient. It became harder to ignore in a stressed market.”
As the US, like the rest of the world, has warmed up due to the burning of fossil fuels, worsening extreme weather events have caused direct damage to people's homes as well as other infrastructure.
Last year, natural disasters exacerbated by the climate crisis caused $182 billion in damage, among the highest on record, according to a government database since the Trump administration pulled the plug.
As a result of these growing risks, home insurance, which buyers need to obtain a mortgage, is becoming increasingly scarce and expensive in much of the United States. These changes are rapidly bucking a trend that has seen more Americans moving to places like Florida and the Southwest, which are increasingly exposed to threats such as devastating hurricanes and devastating heat waves.
But assigning climate risks to individual properties is causing controversy in the real estate industry, as well as among some experts who interrogated is it possible to make such judgments at such a detailed level.
Warnings of such dangers have scared off some buyers, especially if the home was already particularly expensive. Last year, a sprawling Florida mansion was put up for sale for $295 million.making it the most expensive real estate in the country, and in a location considered one of the most flood-prone in the United States. After several reductions in the asking price, the house was taken off the market.
Jesse Keenan, author and a climate risk management expert at Tulane University, said many scientists and economists argue that “proprietary risk models that produce highly uncertain estimates can have the perverse effect of undermining public confidence in climate science.
“There is growing recognition across both parties that government must play a more active role in supporting and standardizing risk assessments for properties,” Keenan said. “At the same time, the ability of science to evaluate each property is limited.
“I don’t think this is a sign that the brokerage industry is trying to hide climate risks,” he added. “Brokerage firms know they cannot stop climate risk communication as climate impacts are already being felt across the sector.”
Eby defended First Street's methods and accuracy, pointing out that the models used were built on peer-reviewed scientific research and tested on real-world results.
“So when our models are claimed to be inaccurate, we ask for evidence,” he said. “To date, all empirical evidence shows that our science works as intended and provides better understanding of risk than the tools the industry has historically relied on.”
