Zillow’s decision to remove climate risk scores from home listings represents a pivotal moment in real estate transparency. While real estate agents celebrate the move, homebuyers now face greater due diligence burdens as climate-related financial risks continue to mount across vulnerable markets.
The recent quiet removal of climate risk scores from Zillow home listings has sent shockwaves through the real estate investment community. This decision, made after just one year of displaying the data, highlights the growing tension between climate transparency and property values in an increasingly volatile market.
The Backlash That Forced Zillow’s Hand
The catalyst for Zillow’s reversal came from the California Regional Multiple Listing Service (CRMLS), the nation’s largest MLS representing over 100,000 real estate agents. Art Carter, CEO of CRMLS, expressed serious concerns about the accuracy of flood risk models provided by First Street Foundation, the data provider behind the climate scores.
“When we saw entire neighborhoods with a 50% probability of the home flooding this year and a 99% probability of the home flooding in the next five years, especially in areas that haven’t flooded in the last 40 to 50 years, we grew very suspicious,” Carter told the New York Times.
The CRMLS organization, covering vast areas of California, argued that displaying specific flood probabilities could significantly impact property desirability and values. Their concerns centered on what they perceived as potentially exaggerated risk assessments for properties with no recent flooding history.
First Street Foundation’s Defense
First Street Foundation, which continues to supply climate risk data to competitors Redfin and Realtor.com, maintains that their models are scientifically sound. Founder and CEO Matthew Eby stated that their models “are built on transparent, peer-reviewed science and the full methodologies are publicly available for anyone to review on our website.”
The foundation’s research suggests climate change will cause a staggering $1.47 trillion reduction in real estate value over the next 30 years, according to their 2025 analysis Property Prices in Peril. Dr. Jeremy Porter, First Street’s head of climate implications research, emphasizes that climate change is already “transforming the economic geography of the nation” and represents “a measurable force reshaping real estate markets.”
The Financial Impact of Climate Risk Disclosure
Research from the National Bureau of Economic Research provides compelling evidence that climate risk information directly influences buyer behavior and property values. A study involving 17.5 million Redfin users found that when flood risk information was displayed alongside property listings, it affected every aspect of the home-buying process.
Key findings from the NBER working paper include:
- Buyers made trade-offs on amenities to secure properties with lower flood risk
- Flood risk information resulted in measurable changes to property prices
- The data influenced property search patterns, bidding behavior, and final purchase decisions
Zillow’s own research corroborates these findings, showing that “homes with extreme risk of flood and fire have a lower probability of being sold and a lower sales price compared to initial list price,” as documented in their climate risk analysis.
The Insurance Crisis Amplifying Climate Risks
The removal of climate risk scores comes amid a growing insurance crisis in high-risk areas. From 2020 to 2023, average property insurance premiums rose by more than 30%, with the steepest increases occurring in hurricane and wildfire-prone regions, according to National Bureau of Economic Research data.
Some parts of California and Florida have become “insurance deserts” where homeowners struggle to find coverage at any price. This insurance market disruption represents a fundamental shift in how climate risk is priced into real estate transactions, creating new due diligence requirements for both buyers and lenders.
Due Diligence in the Post-Transparency Era
With Zillow reducing the visibility of climate risk data, homebuyers must take proactive steps to assess property vulnerabilities. Approximately 26% of U.S. homes face exposure to “at least one type of severe or extreme climate risk,” according to Realtor.com’s 2025 Housing and Climate Risk Report.
Essential due diligence steps now include:
- Accessing First Street data directly through Zillow’s external links
- Reviewing state wildfire dashboards and FEMA flood maps
- Requesting comprehensive disclosure reports from real estate agents
- Verifying insurance availability and obtaining multiple quotes before making offers
- Investigating whether carriers have recently withdrawn from the area
Buyers in high-risk areas should also consider climate-resilient home improvements that may lower insurance premiums and protect their investment. These could include storm-resistant windows, upgraded drainage systems, and fire-resistant landscaping.
The Broader Market Implications
Zillow’s decision reflects a broader industry tension between transparency and market stability. As NASA climate data confirms the planet’s warming trend, the financial implications of climate risk can no longer be ignored. The question becomes whether hiding risk information serves buyers’ long-term interests or merely delays inevitable market adjustments.
Madison Condon, an associate professor of law at Boston University specializing in climate finance, cautions that current risk models may be inadequate for individual property decisions. “The First Street models might provide a good enough answer for certain questions or certain hazards,” she notes, “but what level of accuracy is good enough changes substantially if the question is about one specific property you are about to spend your life savings on.”
This perspective highlights the challenge facing both data providers and platforms: balancing scientific modeling with the practical realities of individual home purchases.
Looking Ahead: The Future of Climate Risk in Real Estate
The removal of climate scores from Zillow listings doesn’t eliminate the underlying risks—it merely shifts the burden of discovery onto buyers. As insurance costs continue rising and climate events become more frequent, the market will inevitably price these risks into property values.
For investors, this creates both challenges and opportunities. Properties in lower-risk areas may see accelerated appreciation, while high-risk properties could face declining values and liquidity issues. The key differentiator will be access to reliable climate risk information and the ability to accurately assess long-term vulnerability.
The era of climate-blind real estate investing is ending. Whether through platform transparency or individual due diligence, accounting for climate risk is becoming an essential component of sound real estate investment strategy.
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