Realtor.com® Equips Consumers with More Data to Evaluate the Potential Impacts of Climate Risks on Their Home

Rhea-AI Summary

Realtor.com® launches three new climate risk factor scores to help consumers understand the risks associated with extreme heat, wind, and air quality, revealing that 32.5% of homes are at risk of extreme heat, 18.1% at risk of wind gusts exceeding 50 mph, and 9% at risk of poor air quality in the US.

Climate Risk Analyst

The introduction of Heat Factor™, Wind Factor™ and Air Factor™ by Realtor.com® represents a significant advancement in how consumers can assess climate-related risks when making real estate decisions. By incorporating data from First Street, a climate technology company, these tools offer a granular view of the potential impact of extreme weather conditions on property values. This is particularly relevant given the valuation of homes at risk—$19.7 trillion, which is a substantial portion of the U.S. housing market.

From a climate risk perspective, these tools could influence market dynamics significantly. Properties in high-risk zones may see decreased attractiveness to buyers, possibly leading to a decrease in property values and a shift in investment patterns. Insurers and lenders might also adjust their risk assessments based on this data, affecting insurance premiums and mortgage rates. Furthermore, the data could spur infrastructure investments aimed at mitigating these risks.

However, it's important to consider the potential for data misinterpretation. Consumers may not fully understand the implications of a given score without proper guidance, which could lead to misinformed decisions. Additionally, the long-term accuracy of these predictive models is contingent upon the quality and comprehensiveness of the underlying climate data, which is subject to change as new research emerges.

Real Estate Market Analyst

The data provided by Realtor.com® on climate risk factors introduces a new variable into the real estate valuation equation. Areas like Miami, San Francisco and others listed with high-value properties at risk could experience a restructuring of the real estate market. Investors and homebuyers might become more cautious, leading to a shift in demand towards areas with lower climate risk scores, potentially inflating prices in these 'safer' regions.

Additionally, the new climate risk scores could become a negotiating factor in real estate transactions. Sellers in high-risk areas may need to invest in resilience measures or adjust prices to maintain competitiveness. On the flip side, this transparency empowers buyers to make better-informed decisions, possibly leading to a more efficient market in the long term.

It's also worth noting that the real estate market is closely tied to local economies. As such, a decline in property values due to increased risk could have a ripple effect, impacting property tax revenues and the availability of funds for public services. This underscores the importance of adaptive strategies by local governments in response to changing climate risk landscapes.

Insurance Industry Expert

The quantification of climate risks for properties is a critical development for the insurance industry. With $19.7 trillion in home values at stake, insurers are likely to leverage this data to refine their underwriting processes and price policies more accurately. The differentiation of risk on a property-by-property basis, rather than by broader geographic regions, enables a more nuanced approach to risk management.

For the insurance sector, this could mean a shift towards customized insurance products that reflect individual property risks. However, this might also lead to higher premiums for properties in high-risk areas, potentially making insurance unaffordable for some homeowners and creating areas of 'insurance deserts'.

Furthermore, the insurance industry may advocate for building codes and standards that improve resilience against extreme heat, wind and poor air quality. This proactive approach not only mitigates future claims but also promotes sustainability and long-term viability for both the industry and homeowners.

New research shows 32.5% of homes are at risk of extreme heat, 18.1% are at risk of wind (gusts exceeding 50 mph) and 9% are at risk of poor air quality

SANTA CLARA, Calif., March 13, 2024 /PRNewswire/ -- In the United States, 40.4% of homes, valued at $19.7 trillion, are at severe or extreme risk when it comes to heat, wind and air quality. To help consumers make more informed home buying and selling decisions, Realtor.com^® announces the launch of three new climate risk factor scores on its website including Heat Factor™, Wind Factor™, and Air Factor™, with data from First Street, a leading climate technology company with expertise in climate change and the connection of climate risk to financial risk.

"Realtor.com^® currently offers users an in-depth look at fire and flood risks. When you consider the percentage of American homes, and the value at risk, against factors like extreme heat, air quality and wind, it was imperative for us to deliver more robust and comprehensive climate risk information to our users," said Mausam Bhatt, Chief Product and Technology Officer, Realtor.com^®. "It's important for people to fully understand the climate risks that a home faces not only in the present, but in the future, so they can make the most informed decision for one of the biggest purchases and investments they will make in their life."

Climate Risk	Value at Risk	Share of Homes Affected
Extreme Heat	$13.6 trillion	32.5 %
Extreme Wind	$7.7 trillion	18.1 %
Air Quality	$6.6 trillion	9.0 %

2024 Realtor.com Climate Risk Report 

Realtor.com^® uses First Street's models that calculate property-level climate risk to present digestible, easy to understand information for its users. Home buyers and sellers can now more fully understand the climate risk associated with a property through maps illustrating exposure to risk factors. They can toggle between factors to see how a particular risk may affect the home's area in the present and over time, showing current exposure to risks and the expected change for each risk in 15 years, and in 30 years, the length of a typical mortgage.  

Across the U.S., certain areas have more value at risk relative to specific climate factors. For example, Miami holds the highest total value of homes at risk for severe or extreme heat (valued at $1,258 billion) and wind (valued at $1,276 billion), while San Francisco has the highest total value at risk of homes at severe or extreme air quality (valued at $1,455 billion). See more market level details here. 

More Ways to Evaluate How Climate Risks May Affect Homes 

• Through Heat Factor™, users can access property-level information that displays a heat risk score between 1-10 (minimal to extreme). They can see how many days the property area experiences a heat index (measured as temperature and humidity) at or above the local definition of a "hot day" and they can see the average high "feels like" temperature in the typical hottest month, today and 30 years into the future. In 2024, approximately 32.5% of homes in the U.S., valued at nearly $13.6 trillion, will face severe or extreme risk of heat exposure.
  
  
• Wind Factor™ assesses property-level risk measured as the chance a property will be exposed to wind gusts exceeding 50 mph at least once, and scores it from 1-10 (minimal to extreme), today and 30 years into the future. This year, approximately 18.1% of homes in the U.S., valued at nearly $7.7 trillion, will face severe or extreme risk of hurricane wind damage.
  
  
• Air Factor™ assigns a property-level air risk score from 1-10 (minimal to extreme) and shows consumers the expected change in poor air quality days (Air Quality Index over 100), today and 30 years into the future.  Approximately 9.0% of homes in the U.S., valued at nearly $6.6 trillion, will face severe or extreme air quality risk in 2024.

Access to climate risk information including extreme heat, wind, and air quality are now available on for-sale homes listed on Realtor.com^® and will be coming soon to rental properties. For more information, visit realtor.com/environmental-risk.

Metros With the Most Share of Home Values at Severe or Extreme Heat Risk*

Metro	Share of Value at Risk	Total Value of Homes at Risk
Austin-Round Rock-Georgetown, TX	100.0 %	$372.7B
Baton Rouge, LA	100.0 %	$67.4B
Cape Coral-Fort Myers, FL	100.0 %	$180.0B
Charleston-NorthCharleston, SC	100.0 %	$155.2B
Deltona-Daytona Beach-Ormond Beach, FL	100.0 %	$101.3B
Houston-The Woodlands-Sugar Land, TX	100.0 %	$732.6B
Jacksonville, FL	100.0 %	$233.7B
Lakeland-Winter Haven, FL	100.0 %	$72.4B
McAllen-Edinburg-Mission, TX	100.0 %	$38.0B
Miami-Fort Lauderdale-Pompano Beach, FL	100.0 %	$1,258.0B
Myrtle Beach-Conway-North Myrtle Beach, SC-NC	100.0 %	$91.6B
New Orleans-Metairie, LA	100.0 %	$106.8B
North Port-Sarasota-Bradenton, FL	100.0 %	$213.7B
Orlando-Kissimmee-Sanford, FL	100.0 %	$356.7B
Palm Bay-Melbourne-Titusville, FL	100.0 %	$97.5B
Tampa-St. Petersburg-Clearwater, FL	100.0 %	$463.6B
Virginia Beach-Norfolk-Newport News, VA-NC	100.0 %	$47.8B
Phoenix-Mesa-Chandler, AZ	99.6 %	$821.3B
Tucson, AZ	99.4 %	$123.9B
San Antonio-New Braunfels, TX	99.2 %	$246.5B
Fresno, CA	99.0 %	$96.1B
Dallas-Fort Worth-Arlington, TX	98.9 %	$939.1B
Las Vegas-Henderson-Paradise, NV	97.3 %	$326.3B
Bakersfield, CA	92.1 %	$70.6B
Richmond, VA	86.8 %	$124.4B
Sacramento-Roseville-Folsom, CA	82.6 %	$339.3B
Augusta-Richmond County, GA-SC	79.7 %	$42.0B
Riverside-San Bernardino-Ontario, CA	77.9 %	$552.1B
Stockton, CA	72.3 %	$72.7B
Baltimore-Columbia-Towson, MD	59.9 %	$195.2B
Washington-Arlington-Alexandria, DC-VA-MD-WV	54.5 %	$525.5B

*For metros having 50%+ of total home values at risk

Metros With the Most Share of Home Values at Severe or Extreme Wind Risk**

Metro	Share of Value at Risk	Total Value of Homes at Risk
Baton Rouge, LA	100.0 %	$67.4B
Cape Coral-Fort Myers, FL	100.0 %	$180.3B
Charleston-North Charleston, SC	100.0 %	$155.7B
Deltona-Daytona Beach-Ormond Beach, FL	100.0 %	$101.6B
Houston-The Woodlands-Sugar Land, TX	100.0 %	$732.6B
Jacksonville, FL	100.0 %	$233.7B
Lakeland-Winter Haven, FL	100.0 %	$72.5B
McAllen-Edinburg-Mission, TX	100.0 %	$38.0B
Miami-Fort Lauderdale-Pompano Beach, FL	100.0 %	$1,276.3B
Myrtle Beach-Conway-North Myrtle Beach, SC-NC	100.0 %	$91.7B
New Orleans-Metairie, LA	100.0 %	$106.8B
North Port-Sarasota-Bradenton, FL	100.0 %	$213.7B
Orlando-Kissimmee-Sanford, FL	100.0 %	$356.8B
Palm Bay-Melbourne-Titusville, FL	100.0 %	$97.5B
Tampa-St.Petersburg-Clearwater, FL	100.0 %	$463.7B
Virginia Beach-Norfolk-Newport News, VA-NC	71.0 %	$33.9B
Austin-Round Rock-Georgetown, TX	51.3 %	$191.2B
Providence-Warwick, RI-MA	51.0 %	$112.3B

**For metros having 50%+ of total home values at risk

Metros With the Most Share of Home Values at Severe or Extreme Air Quality Risk***

Metro	Share of Value at Risk	Total Value of Homes at Risk
Fresno, CA	100.0 %	$97.2B
Sacramento-Roseville-Folsom, CA	100.0 %	$410.6B
Spokane-Spokane Valley, WA	100.0 %	$72.1B
Stockton, CA	100.0 %	$100.6B
Portland-Vancouver-Hillsboro, OR-WA	99.9 %	$400.5B
San Jose-Sunnyvale-Santa Clara, CA	99.9 %	$793.5B
Boise City, ID	99.7 %	$132.4B
Bakersfield, CA	99.4 %	$77.0B
San Francisco-Oakland-Berkeley, CA	98.2 %	$1,455.2B
Seattle-Tacoma-Bellevue, WA	76.8 %	$700.6B
Riverside-San Bernardino-Ontario, CA	61.4 %	$441.2B

***For metros having 50%+ of total home values at risk

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^®.

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SOURCE Realtor.com

What are the new climate risk factor scores launched by Realtor.com®?

Realtor.com® has introduced Heat Factor™, Wind Factor™, and Air Factor™ to provide users with comprehensive climate risk information.

What percentage of homes are at risk of extreme heat according to the PR?

The press release mentions that 32.5% of homes in the US are at risk of extreme heat.

Which company provided the data for the climate risk factors?

First Street, a leading climate technology company, provided the data for the climate risk factors.

What is the total value at risk for extreme wind exposure?

The total value at risk for extreme wind exposure is $7.7 trillion, affecting 18.1% of homes in the US.

How can users access property-level information about heat risk?

Users can access property-level heat risk information through Heat Factor™, which assigns a heat risk score between 1-10.

Which metro has the highest total value of homes at risk for severe or extreme heat?

Miami-Fort Lauderdale-Pompano Beach, FL, holds the highest total value of homes at risk for severe or extreme heat.