When most people think about what affects a home’s value, they consider things like square footage, curb appeal, or school districts. But there’s a new factor quietly reshaping real estate markets across the country: climate risk.

From rising sea levels to wildfire threats and record-breaking heat, climate change is no longer a distant possibility — it’s a present-day reality. And it's starting to show up in the numbers, influencing both short-term property values and long-term buyer behavior.

🔥 Floods, Fires, and Home Prices

Natural disasters are becoming more frequent and severe, and that’s forcing homeowners, buyers, insurers, and appraisers to pay closer attention.

According to a recent Redfin report, home values in flood-prone areas grew about 5% slower than homes in low-risk zones between 2013 and 2022. Meanwhile, wildfire-prone regions in the West — including parts of California, Oregon, and Colorado — have seen insurance premiums skyrocket, sometimes making homes uninsurable or unaffordable.

It’s not just about whether a property has been damaged; it’s about whether it’s likely to be damaged in the future. As predictive risk modeling gets more sophisticated, those probabilities are starting to be baked into AVMs and appraisal values.

🏘️ Micro-Markets: Same City, Different Risk

Climate risk isn’t spread evenly. Two homes in the same zip code could face dramatically different risks — and therefore different valuations.

For example:

• A home three blocks inland might have a lower flood risk than one closer to a bay or canal.
• A house near the edge of a forest may be flagged for wildfire exposure, while one in a more urban area may not.
• Properties with older infrastructure or poor drainage may carry more risk, even if they’ve never flooded before.

That’s why tools like FEMA flood maps, climate risk scores, and even Google Earth terrain data are increasingly being used to analyze risk at the parcel level.

💰 Insurance: The New Wild Card

Perhaps the biggest climate-driven change to home values is tied to homeowners insurance. In high-risk areas, premiums have increased dramatically — or insurers have stopped writing new policies altogether.

In Florida and California, for instance, major insurers like State Farm and Allstate have pulled back or exited entirely from certain zip codes. This leaves homeowners with expensive last-resort insurance or limited coverage — both of which affect affordability and desirability.

If a buyer can’t get affordable coverage, the sale might not go through — or the buyer might demand a price reduction to compensate for the extra cost.

🧠 Smart Buyers Are Doing Climate Homework

Today’s buyers are more data-savvy than ever. Many are checking:

• Flood Factor scores from nonprofit research firm First Street Foundation
• Climate-Check risk ratings (fire, drought, flood, storm, and heat)
• Historical insurance costs and availability
• Local ordinances or FEMA zone reclassifications

And real estate agents are increasingly being asked: “What’s the climate risk here?” That puts pressure on sellers to disclose known risks and prepare for more scrutiny during the sale process.

🌱 How Sellers Can Respond

If you’re selling a home in a climate-sensitive area, it’s not all bad news. Here are a few steps that can protect value:

• Elevate or reinforce your home if in a flood-prone area
• Clear defensible space around homes in wildfire zones
• Install energy-efficient windows and cooling systems
• Disclose mitigation efforts to show buyers you're proactive

Taking visible steps to reduce climate risk doesn’t just make your property safer — it can also reassure buyers and support your asking price.

🔍 The Bottom Line

Climate risk isn’t just an environmental issue — it’s a real estate issue. Buyers, insurers, and investors are already changing how they assess value, and AVMs are beginning to reflect that shift.

At Eppraisal, we believe that understanding your home’s value means looking at more than just comps. It’s about being informed, proactive, and realistic about the world we live in — and the one we’re building for tomorrow.

Curious how climate risk might impact your home’s value? Start with a free home estimate from Eppraisal.com, then talk to a local expert who understands the landscape — literally.