Real estate offers are now associated with climate risks

Just yesterday, Zillow partnered with climate nonprofit First Street to launch a new feature that alerts for-sale listings across the country to threats from flooding, wildfires, wind, heat and air quality. In an analysis, Zillow found that more new listings last month were associated with greater climate risk than homes listed for sale five years ago.

More than half of all new homes listed in August were at major risk of extreme heat, a third were at major risk of extreme wind, nearly 17% were at major risk of wildfires and 13% were at significant air quality risk, according to the Chief economists said nearly 13% were at high risk of flooding.

So not only do we have a housing crisis driven by a lack of housing, but also an insurance crisis – one that’s particularly acute in California and Florida, where home insurers are capping their policies, refusing to write new contracts, or simply fleeing . The reason for this is the ever-increasing costs and risks caused by extreme weather conditions or weather-related events.

And by the way, climate risks and their potential catastrophic consequences for homes are also important for banks: A recent report from First Street concluded that America’s small banks could suffer devastating losses from weather-related disasters as property damage reduces the value of their portfolios.

In the Greater Riverside area, more than 70% of new listings were at high risk of wildfire in August; and in San Francisco, it’s a little less than half of all new listings last month. Not to mention, in Jacksonville, Phoenix, San Diego and Denver, more than a third of the new areas reported in August were identified as having major wildfire risks.

Zillow

Since Riverside has an extremely high risk of wildfires and we know how destructive wildfire season can be in Southern California, let’s take a look.

For one thing, it is very red, indicating a high probability of forest fires. I clicked on one of the many red dots and found a three-bedroom, two-bathroom house. The fire factor is 10 out of 10, which represents an extreme risk. and its heat factor is six out of 10, a big risk.

Once you click on the fire factor score, you’ll learn that wildfire insurance is important and you may even need a separate policy. It also says there have been 88 large wildfires within a 20-mile radius since 1984.

Zillow

This year alone, the chance of your home being caught in the middle of a wildfire is almost 3%. This value increases to 41% in 15 years and to 68% in 30 years. Given the popularity of the 30-year fixed rate mortgage and the possibility that the house will be your forever home, this is scary. The listing announced a $20,000 price cut as of yesterday, leaving the asking price currently at $599,900.

The analysis also found that the New Orleans metropolitan area had by far the largest share of new home listings with a high risk of flooding, at nearly 77%; and more than a quarter of August’s new listings in Houston, Miami, Tampa and Virginia Beach also had a major flood risk.

Zillow

So this time let’s take a look at New Orleans. There are some very blue areas on the map, indicating the likelihood of flooding and the possible depth of flooding as it gets darker. One of the properties – a four-bedroom, four-bathroom home – has a flood factor of nine out of ten, making it an extreme risk. There is a 99 percent chance of flooding in the next 30 years. Scary again. This home was listed for sale two years ago for $550,000. It has been removed and relisted and its price has dropped to $489,000.

Here’s the thing. It may be good to know, but Amy Bach, the co-founder and executive director of United Policyholders, a nonprofit that advocates for insurance consumers, once told me that the rise of technology that filters out riskier properties is making it easier for insurers Basically makes it easier to refuse coverage. And an uninsurable house isn’t great.