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