A new data analysis by Zillow (NASDAQ: Z, ZG) has determined the risks posed by flood, fire and extreme wind could cost the US house trillions of dollars in damage.
Zillow stated that homes with major wind risk are worth at least $17 trillion in total, equivalent to more than half of the U.S. GDP. Homes with major fire risk are valued at $9.1 trillion, and homes with major flood risk are worth a cumulative $7 trillion.
Eleven major metro areas have at least $100 billion of residential real estate with major risk of fire, with six of those areas located in California. The Los Angeles metro has the highest total value of homes at major risk of fire, at $831 billion.
Over on the East Coast, the New York City metro area has the highest total value of homes at major risk of flood and extreme wind – $593 billion for flood risk and nearly $3 trillion for major wind risk.
Zillow noted that more than 80% of home shoppers consider climate risks when looking for a new home. However, in June 2024 homes with extreme flood risk had a median list price that was 22% higher than for homes with minor risk, while the median list price for homes with extreme fire risk was 49% higher than homes with minor fire risk.
“The risk of natural disasters and rising insurance costs are profoundly reshaping the housing market. Home buyers are paying attention,” said Kara Ng, a senior economist at Zillow. “With trillions of dollars in real estate vulnerable to these risks, informed decision-making for what is the biggest purchase of many buyers’ lives has never been more critical.”
