In a significant pivot impacting the digital real estate landscape, Zillow, a prominent online property marketplace, has opted to remove comprehensive climate risk scores from over one million property listings. This decision, enacted last month, follows a period of intense pressure and complaints from real estate agents who argued that the inclusion of such data was directly contributing to a decline in property sales. The move reopens a critical debate about transparency in real estate, the financial implications of climate change, and the responsibilities of platforms that connect buyers and sellers.

The Genesis of Climate Risk Disclosure

Zillow initially integrated climate risk data into its platform in September 2024, a move heralded by the company as a response to evolving consumer demands. At the time of its introduction, Zillow publicly asserted that more than 80% of prospective homebuyers considered climate-related risks when evaluating a potential new residence. This statistic underscored a growing societal awareness of the escalating threats posed by a changing climate, from more frequent and intense wildfires to devastating floods and powerful storms. The intention was clear: to empower buyers with crucial information to make informed decisions about what is often the largest financial commitment of their lives.

The data itself was sourced from First Street Foundation, a New York-based non-profit research and technology group specializing in climate risk analytics. First Street Foundation has garnered substantial support, raising over $50 million from notable investors including General Catalyst, Congruent Ventures, and Galvanize Climate Solutions. Their models provide granular, property-specific risk assessments for various perils, including flood, fire, and wind. Prior to its integration on Zillow, First Street’s climate risk scores had already been adopted by other major real estate portals like Realtor.com (since 2020), Redfin, and Homes.com, where they continue to be displayed, highlighting Zillow’s unique reversal in this trend.

Industry Pushback and the "Chilling Effect"

The enthusiasm for climate risk transparency, however, quickly met with resistance from a segment of the real estate industry. Complaints began to surface shortly after the feature’s launch, with agents expressing concern over what they perceived as a detrimental impact on property desirability and, consequently, sales volumes. One agent in Massachusetts, speaking to the Boston Globe in 2024, articulated this sentiment by stating that the risk scores were "putting thoughts in people’s minds about my listing that normally wouldn’t be there." This sentiment gained traction, culminating in formal objections from influential industry bodies.

The California Regional Multiple Listing Service (CRMLS), a significant voice representing real estate professionals across the state, became a vocal opponent of the climate scores. Art Carter, CEO of CRMLS, conveyed his concerns to the New York Times, specifically questioning the accuracy of First Street’s data and highlighting the profound impact that displaying the "probability of a specific home flooding this year or within the next five years can have on the perceived desirability of that property." Carter further expressed skepticism regarding the likelihood of flooding in areas that had not experienced such events in the preceding 40 to 50 years, suggesting that First Street’s projections might be overly alarmist or inaccurate. This stance reflects a common tension in real estate: the desire to present properties in the most favorable light to facilitate transactions, often clashing with the imperative for full disclosure of potential risks.

The Debate Over Data Accuracy and Disclosure

In response to the mounting criticism, Zillow ultimately decided to remove the prominently displayed climate scores. In their place, the platform now provides a less conspicuous link to First Street’s records, requiring users to actively seek out the information rather than having it presented upfront. This change has drawn sharp criticism from First Street Foundation itself. Matthew Eby, a spokesperson for the organization, expressed profound concern, telling TechCrunch that "When buyers lack access to clear climate-risk information, they make the biggest financial decision of their lives while flying blind. The risk doesn’t go away; it just moves from a pre-purchase decision into a post-purchase liability.” This statement underscores a core ethical and economic argument: that suppressing risk data does not eliminate the risk, but merely transfers the burden and potential financial catastrophe from the seller to an uninformed buyer.

First Street Foundation has consistently defended its methodology and the robustness of its data. Eby emphasized that their models are "built on transparent, peer-reviewed science and are continuously validated against real-world outcomes." To substantiate these claims, First Street cited the devastating Los Angeles wildfires, where their maps accurately identified over 90% of ultimately burned homes as being at severe or extreme risk, their highest rating. Furthermore, 100% of these properties were flagged as having some level of risk, a performance First Street asserts significantly outperformed CalFire’s official state hazard maps. This example highlights a crucial aspect of the debate: the potential inadequacy of traditional, government-issued hazard maps.

The Broader Context of Outdated Risk Assessments

Indeed, official hazard maps, particularly those from the Federal Emergency Management Agency (FEMA) used to designate flood insurance requirements, have faced increasing scrutiny and criticism in recent years. Experts and analyses frequently point out that these maps are often outdated, failing to reflect current environmental conditions, new development patterns, or the accelerating impacts of climate change. A Louisiana State University analysis, for instance, revealed that nearly twice as many properties in the U.S. carry a 1% annual risk of flooding – often colloquially referred to as a "100-year flood" – than are actually listed on FEMA’s official flood maps. This disparity means a vast number of homeowners may be unaware of their true flood risk and, consequently, may not carry adequate flood insurance, leaving them financially vulnerable.

The discrepancy between official and private-sector climate risk data creates a significant knowledge gap. While real estate agents and sellers may prefer to rely on less alarming official assessments, the reality of climate risk is being increasingly factored into the decisions of other powerful market players.

The Financial Sector’s Response to Climate Risk

The real estate and insurance industries, in particular, are grappling with the profound implications of worsening weather patterns driven by climate change. Insurers, faced with mounting payouts from extreme events, are increasingly utilizing sophisticated climate data to assess risk, adjust premiums, or even withdraw coverage from high-risk areas. This trend is already evident in regions prone to wildfires, hurricanes, and floods, where property insurance has become exorbitantly expensive or entirely unavailable.

Peter Gajdoš, a partner at proptech venture capital firm Fifth Wall, succinctly captured the stark reality four years ago when he wrote for TechCrunch, "If buildings are on fire or underwater, they don’t have much value." He further noted the "unprecedented" interest from large insurers in discussing these issues, underscoring the urgency with which the financial sector is approaching climate risk. Investors, mortgage lenders, and cities are also increasingly integrating climate data into their long-term planning and investment strategies, recognizing that physical assets in vulnerable locations represent growing financial liabilities. The availability of robust, forward-looking climate analytics from firms like First Street Foundation is becoming indispensable for these entities to accurately price risk and allocate capital.

Market, Social, and Cultural Impacts of Disclosure (or Lack Thereof)

Zillow’s decision to scale back climate risk disclosure has multifaceted impacts across the housing market and society:

• For Homebuyers: The most immediate effect is reduced transparency. Buyers, especially those without specialized knowledge or access to alternative data sources, might inadvertently purchase properties in high-risk zones, unknowingly assuming significant future financial liabilities related to insurance costs, maintenance, and potential disaster recovery. This creates an information asymmetry where sellers and agents may possess more complete information about risks than buyers, potentially leading to suboptimal decisions for consumers.
• For Real Estate Agents and Sellers: In the short term, the removal of prominent risk scores may alleviate immediate sales friction, potentially making it easier to market properties that might otherwise appear less desirable. However, this is a temporary reprieve. As climate impacts intensify and other market forces (like insurance costs and lender requirements) increasingly price in climate risk, these properties could become "stranded assets," difficult to sell or insure at any reasonable price in the long run. The ethical question of full disclosure also remains a latent concern.
• For the Housing Market: The absence of clear, standardized climate risk disclosure can lead to an inefficient market where properties are mispriced relative to their true risk profiles. This can delay the necessary adaptation and mitigation efforts, as market signals are muted. It also risks exacerbating social inequalities, as less affluent buyers, often with fewer resources for due diligence, may be disproportionately exposed to climate risks.
• Cultural Shift: There is a growing cultural expectation for transparency and environmental responsibility. While some agents may resist, a younger generation of homebuyers and a broader public are increasingly demanding access to information that impacts their long-term well-being and financial security. The tension between immediate economic interests and the long-term imperative of climate resilience is a defining feature of this era.

The Path Forward: Inevitable Integration

Despite Zillow’s recent reversal, the broader trend toward integrating climate risk into real estate decisions appears irreversible. While Zillow has opted for a less direct approach, other major platforms continue to offer detailed climate risk data. Furthermore, the financial sector’s reliance on such analytics will only grow, influencing mortgage rates, insurance availability, and property valuations regardless of how listings are presented to the public.

It is highly probable that regulatory bodies will eventually step in to mandate standardized climate risk disclosure, similar to existing requirements for flood zones or lead paint. Several states and municipalities are already exploring or implementing such legislation, recognizing the public good inherent in providing comprehensive risk information. The push for greater transparency is not merely about identifying risks but also about fostering resilience and guiding development away from the most vulnerable areas.

In essence, Zillow’s decision highlights a fundamental conflict: the immediate commercial interests of facilitating property transactions versus the imperative of empowering consumers with full knowledge of evolving climate risks. While the immediate friction for agents may have been reduced, the underlying risks associated with climate change persist, and the demand for clear, accessible information on these risks is unlikely to diminish in the long run. The future of real estate will undoubtedly be shaped by how effectively and transparently these critical climate factors are integrated into the home buying and selling process.