Zillow lowers climate risk scores after agents complained of lost sales

Sorry, potential homebuyers. Just over a year after adding climate risk scores, Zillow removed it from more than a million listings after real estate agents complained that the information caused them to lose sales.

Zillow first added data to the site in September 2024, Saying More than 80% of buyers consider climate risks when purchasing a new home.

But last month, after objections from the California Regional Multiple Listing Service (CRMLS), Zillow removed the listings’ climate scores. Instead, there is an exact link to their records at First Street, the climate risk analysis startup that provides the data.

“When buyers lack access to clear information about climate risks, they are making the biggest financial decision of their lives flying blind,” Matthew Eby, a spokesman for First Street, told TechCrunch via email. “Risk doesn’t go away; it just moves from a pre-purchase decision to a post-purchase responsibility.”

First Street’s Climate Risk Scores appeared first on Realtor.com in 2020, where they remain. They also still appear on Redfin and Homes.com.

The New York-based startup has raised more than $50 million from investors including General Catalyst, Congruent Ventures and Galvanize Climate Solutions, according to PitchBook.

Art Carter, CEO of CRMLS, He said The New York Times noted that “showing the likelihood of a particular home flooding this year or within the next five years can have a significant impact on the perceived desirability of that property.” He also questioned the accuracy of First Street’s data, saying he doesn’t believe areas that haven’t flooded in the past 40 to 50 years are likely to flood in the next five years.

This is not the first time real estate agents have complained about climate risk scores. Last year, when Zillow introduced this feature, one agent in Massachusetts told The New York Times Boston Globe That the risk scores were “putting ideas in people’s minds about my list that normally wouldn’t exist.”

First Street defended its data. “Our models are built on a transparent, peer-reviewed scientific foundation, and are continually validated against real-world results,” Eby said.

“In the CRMLS coverage area, during the Los Angeles wildfires, our maps identified more than 90 percent of the homes that ultimately burned as being at extreme or extreme risk — our highest risk rating — and 100 percent as having some level of risk, significantly outperforming CalFire’s official state risk maps,” he added.

Official risk maps have been criticized in recent years for either being outdated or underestimating the level of risk to which a property is exposed. Nearly twice as many properties carry an annual flood risk of 1% — the so-called 100-year flood — than are listed on Federal Emergency Management Agency flood maps, which are used to determine properties required to carry flood insurance, according to Louisiana State University analysis.

The real estate and insurance industries are racing to keep up with worsening weather caused by climate change.

“If the buildings were on fire or underwater, they wouldn’t have much value,” says Peter Jagdush, a partner at venture capital firm Fifth Wall. books For TechCrunch four years ago. “We are discussing these issues with major insurance companies and the interest is unprecedented.”

Investors, insurers and cities will likely continue to use data from companies like First Street to determine where climate risks lie. By giving homebuyers access to the same data, Zillow has helped level the playing field. But thanks to objections from real estate agents, consumers have another hurdle to overcome.