Zillow drops climate risk scores after agents complained of lost sales

In a surprising turn of events, Zillow has decided to eliminate climate risk scores from over 1 million property listings, just a year after their introduction. The decision follows complaints from real estate agents who argued that these scores were negatively impacting their sales. Originally integrated into the platform in September 2024, Zillow's climate risk scores were designed to inform potential buyers about the environmental vulnerabilities of homes. The company claimed that more than 80% of consumers take climate risks into account when making home purchases. However, after feedback from the California Regional Multiple Listing Service (CRMLS), Zillow has opted to replace these scores with a less prominent link to First Street, the climate analytics startup responsible for the data. Matthew Eby, a spokesperson for First Street, expressed concerns about the implications of this change. He pointed out that when buyers are not provided with clear climate-risk information, they are left to navigate one of the largest financial decisions of their lives without adequate guidance. "The risk doesn’t go away; it just shifts from a pre-purchase decision to a post-purchase liability," Eby stated in an email to TechCrunch. First Street's climate risk scores were first seen on Realtor.com in 2020 and continue to be available on Redfin and Homes.com. The New York-based startup has attracted over $50 million in investment from notable firms such as General Catalyst, Congruent Ventures, and Galvanize Climate Solutions. Art Carter, CEO of CRMLS, highlighted the significant impact that displaying flood probabilities can have on property desirability. He raised questions about the reliability of First Street’s data, suggesting that areas with no flooding history over several decades are unlikely to be at risk in the near future. This incident is not the first time that real estate agents have raised concerns about climate risk scores. During the initial rollout, an agent from Massachusetts voiced to the Boston Globe that these scores were creating unnecessary doubts about property listings. In defense of its data, First Street emphasized the scientific rigor behind its models. Eby pointed out that during the Los Angeles wildfires, their assessments accurately identified over 90% of homes that were severely or extremely at risk, outperforming official state hazard maps. As the challenges posed by climate change continue to escalate, the real estate and insurance sectors are striving to adapt. Peter Gajdoš, a partner at the proptech venture capital firm Fifth Wall, noted that the urgency of these discussions with large insurers has reached unprecedented levels. As investors and cities increasingly rely on data from companies like First Street to discern climate risks, Zillow's decision to remove these scores may complicate matters for consumers seeking transparency in the housing market.