According to analysis from Zillow, US homes with major wind risk are worth at least US$17 trillion in total, equivalent to more than half of the country’s GDP.
Properties with major fire risk are valued at US$9.1 trillion, while homes with major flood risk represent a cumulative US$7 trillion.
The Los Angeles metro area has the highest total value of homes at major risk of fire, at US$831 billion.
Six of the eleven major metro areas with at least US$100 billion of residential real estate at major fire risk are located in California.
New York City leads all major markets with the highest total value of homes at major risk of both flood and extreme wind.
For flood risk, New York properties valued at US$593 billion narrowly edge out Miami at US$580 billion, with no other major metro exceeding US$300 billion at risk.
“The risk of natural disasters and rising insurance costs are profoundly reshaping the housing market. Home buyers are paying attention,” Kara Ng, a senior economist at Zillow said.
“With trillions of dollars in real estate vulnerable to these risks, informed decision-making for what is the biggest purchase of many buyers’ lives has never been more critical.”
Despite these risks, many high-risk areas remain desirable and often command premium prices.
Of homes with extreme flood risk listed for sale in June 2024, the median list price was 22 per cent higher than for homes with minor risk scores.
The median list price for homes with extreme fire risk was 49% higher than homes with minor fire risk.
Homes with extreme flood risk are worth just under US$2 trillion nationwide, while properties with extreme fire risk are valued at a total of US$447 billion.
This suggests that despite awareness of environmental risks, other factors continue to drive property values in vulnerable areas.
More than 80 per cent of home shoppers consider climate risks when looking for a new home, according to the report.
To assist with this decision-making process, Zillow now provides risk data directly on for-sale listings, including insights into five key risks: flood, wildfire, wind, heat and air quality.
This information helps potential buyers evaluate long-term factors affecting homeownership, such as safety, resilience and potential future costs associated with living in areas prone to natural disasters.
The analysis also revealed that in the wind risk category, New York homes with major risk total approximately US$3 trillion in value, with Miami and Boston homes at risk also exceeding US$1 trillion each.
“With trillions of dollars in real estate vulnerable to these risks, informed decision-making for what is the biggest purchase of many buyers’ lives has never been more critical,” Kara Ng said.