A new Zillow analysis finds homes with higher risk of flood and fire are less likely to sell, or even go pending, and those that do sell are more likely to sell for less than the original list price. These trends have increased in recent years.

With the growing frequency and severity of natural disasters such as storms, floods and wildfires, more than 80% of home shoppers consider climate risks when looking for a new home. Zillow’s latest research — which compared for-sale homes that have an extreme flood and fire risk score of 9 or 10 to for-sale listings with a low climate risk score of 1 or 2 — underscores how that scrutiny is affecting homes for sale in high-risk areas.

Despite these marketplace challenges, in general, home values remain strong in areas of higher flood and fire risk. Among for-sale listings in June 2024, the median list price for flood-prone homes was 22% higher than in low-risk areas, while the median list price for fire-prone homes was 49% higher than homes with low fire risk. That’s because, while home buyers are considering climate risk, they are also considering a multitude of other factors, such as proximity to family, job opportunities or amenities. Many high-risk areas are desirable places to live for other reasons, like being near the ocean. 

Flood-prone homes are affected the most.

Among climate risks, flood risk most often affects where buyers shop for homes, according to Zillow’s Consumer Housing Trends Report. Zillow’s new analysis supports that finding, as homes associated with extreme flood risk are seeing more severe impacts than homes associated with extreme fire risk when listed for sale. 

Failure to sell: Of U.S. homes listed in June 2024 — the peak of the most recent home shopping season — 52% of high-flood-risk homes have sold, compared to 71% of low-flood-risk homes. Homes may fail to sell if they don’t receive an attractive offer, resulting in the house never going pending. Notably, 44% of flood-prone homes listed in June 2024 have yet to go pending, compared to 26% of listings with low flood-risk scores. A home also may fail to sell if the transaction falls through, which explains the discrepancy between the share of homes that have gone pending and sold. This can happen for various reasons, such as inspection contingencies, in which the buyer uncovers deal-breaking issues, or financing complications, including when the buyer receives a low appraisal compared to the sale price or when the buyer learns that affordable insurance is not available—a challenge that’s increasingly common in markets with higher risk of climate-related natural disasters. 

Selling later and for less: Across the country, flood-prone homes also take longer to sell, and they typically sell for less than the initial list price. High-flood-risk homes from the June 2024 sample took a median of 31 days to final pending, versus 19 days for listings with low flood risk. Between price cuts or the buyer’s acceptance of a below-list offer, flood-prone homes typically sold for 6% below the initial list price. That’s compared to 3% lower than the initial list price for homes with a low flood-risk score. 

Markets with the biggest effects: Homes face the biggest flood-risk effects in Florida, Texas and Alabama. Of Florida listings in June, 35% of high-flood-risk homes have sold, compared to 56% of low-flood-risk homes. Of the homes that did sell, the average discount from initial list price was 3% greater for high-flood-risk homes.

High-flood-risk homes in Texas and Alabama had a 20% and 19% lower probability of selling, respectively. But on average, the homes that sold had a relatively small ding compared to initial list price — a 1.5% greater discount for high-flood-risk homes. 

New Jersey deserves an honorable mention: While the share of homes that successfully sold was only 11% lower for high-flood-risk homes (70% for high-flood-risk homes versus 81% for low-flood-risk homes), the drop in sales-to-initial-list-price was higher: On average, high-flood-risk homes sold 3% below list, while low-flood-risk homes sold 3% above list.

Homes with fire risk face smaller effects than homes with flood risk.

Compared to listings that have a low fire risk, homes listed in June 2024 with high fire risk faced an 8% lower chance of selling, 6% higher chance of never going pending, 12 days longer on the market for those that were sold, and a 1.4% lower sale price compared to initial list price.

Market effects in California and Texas: In California, where the recent Los Angeles wildfires are estimated to have cost tens of billions of dollars in property damage, fire-prone listings faced a 9% lower chance of selling and 5% higher chance of never going pending. Homes that eventually sold spent nine days longer on the market and sold for 3% lower when compared to initial list price than low-fire-risk homes.

The impact was similar in Texas, where fire-prone listings faced an 8% lower chance of selling, 10% higher chance of never going pending and homes that eventually sold took nine days longer to sell than low-fire-risk homes. However, the difference in sale price compared to initial list price was only 0.6%.

Impacts have increased in recent years.

Zillow’s analysis shows that high-flood-risk homes have had a consistently lower chance of selling since at least 2018, the earliest data available. For the majority of that period, the same has been true for homes with high fire risk. In recent years, the gap between the share of flood-prone listings that sell and low-flood-risk homes that sell has widened.