Homes at Risk of Natural Disaster Are Less Likely to Sell

Not only are homes in climate-risk regions of the U.S. prone to higher insurance costs, but recent data from housing market platform Zillow show homes in these regions are also much less likely to sell. As natural disasters have become more frequent in recent years, more than 80% of prospective buyers say they take these risks into consideration when determining where to purchase a home. Homes in flood-prone areas are least likely to sell. Of the homes that were listed during the most recent peak home shopping season in June 2024, 52% of high-flood-risk homes sold, compared with 71% of homes in low-flood-risk areas. Additionally, 44% of homes in flood-prone areas listed in June 2024 have yet to go pending, compared with 26% of home listings in low flood-risk areas.

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. Read more