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Access to property-specific flood risk information causes homebuyers to significantly shift their search toward homes with lower risk, according to a large-scale study. This behavioral change is most pronounced among buyers previously considering properties with severe or extreme flood risk, who subsequently placed bids on homes with 54% less risk after seeing the data. The findings suggest that as climate risk awareness grows, it may begin to influence property values in vulnerable areas.
A randomized controlled trial involving 17.5 million Redfin.com users revealed a direct link between information and decision-making. For a three-month period, half of the users (the treatment group) were shown a property-level flood-risk score, while the other half (the control group) were not. The flood-risk scores, provided by the First Street Foundation’s Flood Factor, rated a property's likelihood of flooding at least once over a 30-year mortgage term on a scale of 1 (minimal) to 10 (extreme).
The most significant impact was observed on users who had been viewing homes with an average flood-risk score of 8.5 (severe/extreme risk) before the study. After gaining access to the risk data, this group went on to submit offers on homes with an average risk score of 3.9 (moderate risk). In contrast, the control group, which never saw the risk scores, continued to bid on homes with an average score of 8.5. The data indicates that flood danger is a decisive factor when it is substantial.
The study also measured changes in online browsing patterns. Users who initially viewed homes with extreme risk (score of 9.5) began viewing properties with about 10% less risk after the data was introduced. This effect grew over time; after nine or more weeks, these users were viewing homes with 25% less risk than their control group counterparts. This shift occurred even during a highly competitive housing market, suggesting that climate risk is a growing priority for buyers even when facing bidding wars.
Interest in detailed flood risk information, measured by clicks into the expanded "Flood Risk" section of a listing, was highest in metros with known vulnerability. The top five metropolitan areas for click-through rates were:
| Metro Area | Click-Through Rate |
|---|---|
| Cape Coral, FL | 8.5% |
| Houston, TX | 8.1% |
| Baton Rouge, LA | 7.5% |
| McAllen, TX | 7.4% |
| New Orleans, LA | 7.3% |
This pattern demonstrates that buyers in regions frequently affected by flooding are actively seeking out information to assess their personal and financial risk.
Based on our experience assessment, the widespread availability of climate-risk data has two major implications. First, homes in high-risk areas may see downward pressure on their value as buyer demand shifts. Second, lower-risk areas may experience increased competition and rising prices.
For individual homeowners, a high flood-risk rating means understanding potential costs, including mandatory flood insurance and the possibility of depreciating value. For policymakers, this data highlights the need for strategic planning. Local leaders in lower-risk cities might consider updating zoning laws to allow for denser housing, creating more supply for households looking to relocate. Conversely, communities in high-risk areas may need to invest in climate-resilient infrastructure or consider buyout programs for the most vulnerable properties.
Prospective homebuyers should diligently research a property's flood risk, understanding that even a 'moderate' score does not mean zero risk. Consulting with insurance providers about potential costs is a critical step in the due diligence process. As one researcher involved in the study noted, with the housing market cooling, buyers now have more leverage to factor climate risks directly into their purchasing decisions.
