Zillow Removes Climate Risk Scores After Agent Complaints

Zillow Removes Climate Risk Scores Following Agent Complaints

Zillow has taken down climate risk scores from over a million property listings. This decision follows pushback from real estate agents who asserted the information negatively impacted their sales.

The data was initially integrated into the platform in September 2024. Zillow cited that a significant majority – over 80% – of homebuyers factor climate-related risks into their purchasing decisions.

CRMLS Objections and Data Access

However, in response to concerns raised by the California Regional Multiple Listing Service (CRMLS), Zillow removed the direct climate scores from listings last month.

Currently, a discreet link directs users to First Street, the climate risk analytics company providing the underlying data, for more information.

Impact on Homebuyers

Matthew Eby, a spokesperson for First Street, expressed concern over the removal. He stated to TechCrunch that withholding climate risk information leaves buyers unprepared for potential future liabilities.

“The inherent risk doesn’t disappear; it simply shifts from being considered before a purchase to becoming a post-purchase financial burden,” Eby explained.

Availability on Other Platforms

First Street’s climate risk assessments remain accessible on other real estate websites, including Realtor.com, Redfin, and Homes.com.

The New York-based startup has secured over $50 million in funding from investors such as General Catalyst, Congruent Ventures, and Galvanize Climate Solutions, as reported by PitchBook.

Concerns Regarding Accuracy

Art Carter, CEO of CRMLS, conveyed to The New York Times that displaying probabilities of flooding can significantly diminish a property’s appeal.

He also voiced skepticism about the accuracy of First Street’s data, suggesting that areas with no recent flood history are unlikely to experience flooding in the near future.

Previous Agent Concerns

This is not the first instance of real estate professionals expressing dissatisfaction with climate risk scores.

Last year, an agent in Massachusetts informed the Boston Globe that the scores introduced concerns among potential buyers that wouldn't have otherwise arisen.

First Street Defends Methodology

First Street maintains the validity of its data. Eby affirmed that their models are based on transparent, peer-reviewed scientific principles and are continuously validated against actual events.

During the Los Angeles wildfires, First Street’s maps accurately identified over 90% of homes that ultimately burned as being at severe or extreme risk, exceeding the performance of CalFire’s official hazard maps.

Limitations of Official Hazard Maps

Official hazard maps have faced criticism for being outdated or underestimating risk levels.

A Louisiana State University analysis revealed that nearly twice as many properties face a 1% annual flood risk – a “100-year flood” – compared to those identified on Federal Emergency Management Agency (FEMA) flood maps, which determine flood insurance requirements.

Industry Response to Climate Change

The real estate and insurance sectors are actively adapting to the escalating impacts of climate change.

Peter Gajdoš, a partner at Fifth Wall, a proptech venture capital firm, noted four years ago that properties damaged by fire or water have limited value, and interest from insurers in this area is unprecedented.

Continued Use of Climate Risk Data

Investors, insurers, and municipalities will likely continue to utilize data from companies like First Street to assess climate risks.

By providing homebuyers with access to this information, Zillow initially promoted transparency. However, due to objections from real estate agents, consumers now face an additional obstacle in accessing crucial data.