Prospective home buyers have been able to assess flood risk on prospective homes for years. But that hasn’t held true for other kinds of natural disasters—particularly wildfires.
And as wildfires become a bigger and bigger threat to homes because of climate change, one real estate company is making it easier for homeseekers to assess the risk of wildfire damages before closing on a home.
Realtor.com and climate risk nonprofit FirstStreet Foundation are launching a model that will assign a wildfire risk score to every listing on the Realtor.com website, which they say is the first metric of its kind to address wildfire concerns.
The new wildfire risk metric, which went live on Monday, is being rolled out as this year’s wildfire season begins earlier than usual, and the intensity and duration associated with wildfires in the U.S. grows.
“We are making wildfire risk information available for free to help homeowners, buyers, and sellers make informed decisions that can help protect their properties and families,” Sara Brinton, lead product manager at Realtor.com, said in a statement made to Fortune.
Accounting for wildfire risks
The new wildfire risk model will take into account factors like what materials were used to build a home, local weather, and the distance between a property and flammable fuel sources, such as trees, grass, and other vegetation. It will also map out wildfire risk data for listings, and each property on Realtor.com’s website will be given a ranked score reflecting its vulnerability to wildfires.
So far, homeseekers have been unable to easily factor the risk of wildfires occurring near or on their property into their decision to buy a home or home insurance, unlike flooding risks, of which data has been more readily available for decades.
The National Flood Insurance Program has been in place since 1968, providing homebuyers with detailed information regarding their home’s risk to sudden floods and delivering specialized insurance policies that can cover damages.
In 2020, FirstStreet also issued its own flood risk data map, which found millions’ more homes where flood risk is unaccounted for in federal maps. FirstStreet’s data is now used by real estate companies nationwide to assess flood risk on their listings.
Wildfire risk increasing for homeowners
Publicly available data on wildfire risks may be especially welcome in states like California and Texas, which have had major problems with wildfires over the past few years.
The California Camp Fire in 2018, fueled by a lengthy drought in the state and propelled by strong winds was the deadliest and costliest wildfire in the state’s history, causing 85 deaths and destroying more than 18,000 buildings. Texas, meanwhile, has been wrapped in one of the largest wildfires in its history this spring, which has already led to more than $23 million in agriculture losses.
Those two states are most at risk of high damage costs because of wildfires, according to the model’s data, which found that in California alone, over $3 trillion worth of properties are at risk.
But the future could look even worse.
Between 2005 and 2020, wildfires burned down nearly 90,000 structures across the country, including homes and businesses, with damages steadily increasing every year. Last year was another record one for wildfires, as nearly 7.7 million acres were charred in the U.S. due to a prolonged drought and record-breaking heatwaves.
More than 30 million households nationwide will be at risk of wildfire in the next 30 years, around one in five single family homes, Realtor and FirstStreet’s model predicts, as some parts of New Jersey, North Carolina, and Florida are expected to carry the same wildfire risks that California does today. The potential property value at risk of wildfire damage over this time period is nearly $9 trillion.
The rising frequency of wildfires is creating big losses for insurance companies, which has led to higher premiums in many at-risk areas to reflect the higher intensity and increased duration of wildfire seasons in many parts of the U.S.
Higher premiums have made wildfire insurance less and less affordable for many homeowners, and vulnerable states have pushed to bring wildfire risk and premiums down. The California Department of Insurance released a new plan this February that requires insurance companies to lower their premiums if homeowners take measures to increase safety against wildfires, such as clearing the area surrounding their property of flammable materials.
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