'Climate risk' becoming a major factor in real estate

Shopping for a home now involves trying to predict what the weather will be over the next 10 or 20 years and what effect it will have on home value.

Home buying is becoming trickier

Realtors are admitting what homebuyers have known for awhile -- "climate risk" is rapidly becoming a major factor in real estate. For decades, you could find a suitable home and make an offer without worrying about natural disasters except in a few well-known high-risk areas.

But times have changed, with the advent of more frequent weather events in established high-risk zones and just about everywhere else. More frequent and severe wildfires, floods, hurricanes, and other disasters are making people realize the tangible impacts of climate change.

Meanwhile, platforms like Zillow, Redfin, and ClimateCheck are integrating climate risk data into their listings, making it easier for buyers to see potential hazards.

Insurance & financial impacts

Insurance companies are facing increasing losses due to climate-related disasters. This is leading to higher premiums, making some properties unaffordable to insure, not just in Florida or California.

In high-risk areas, insurers are pulling back or even refusing to offer coverage, making it difficult for buyers to secure mortgages.

All this is putting pressure on property values. Properties in high-risk areas are seeing declining values as buyers become more aware of potential risks and costs. 

Investors are increasingly considering climate risk in their decisions, leading to shifts in capital towards more resilient areas.

Government policies, buyer preferences

Some jurisdictions are considering or implementing mandatory climate risk disclosures for real estate transactions.

Updated building codes are being developed to enhance resilience to climate hazards.

For their part, buyers are prioritizing features like energy efficiency, water conservation, and proximity to green spaces.

Long-term costs are also getting more attention. Buyers are factoring in potential future costs associated with climate risks, such as insurance premiums and repairs.

Overall, climate risk is no longer a niche concern. It's a significant factor that is reshaping the real estate landscape, influencing buyer behavior, investment strategies, and even government policies.