Wildfire warnings accompany California's older home sales

"Sellers must identify wildfire hazards such as wood-shingle roofs, uncovered vents, single-pane windows and nearby vegetation. They must also indicate whether they've taken action to mitigate those threats. Experts say the law could reshape California's housing market as climate-driven disasters intensify. When you require disclosure, you see effects on home prices, Margaret Walls, a senior fellow at Resources for the Future, a Washington, D.C.-based research institute, told Bloomberg."

"She added that buyers tend to pay more for properties perceived as safer, which could encourage sellers to invest in upgrades. Nearly 91% of California homes were built before 2010 including 2 million in wildfire-prone areas. About 3% to 4% of single-family houses come on the market each year, Bloomberg said. Whether buyers act on wildfire information is less certain."

"You can give people too much information such that they ignore all of it, said Matthew Kahn, an economics professor at the University of Southern California. Still, Kahn's research suggests targeted climate disclosures matter. A 2023 study he co-authored with Redfin showed that users who viewed detailed flood risk data subsequently searched for homes with lower risk, influencing sale prices. For those homesellers who can demonstrate that they've taken proactive steps to protect their homes, they're going to sell for a price premium, Kahn said."

Sales disclosures must list wildfire hazards such as wood-shingle roofs, uncovered vents, single-pane windows and nearby vegetation and state whether mitigation steps were taken. Buyers tend to pay more for properties perceived as safer, which can incentivize sellers to invest in upgrades and yield price premiums for protected homes. Nearly 91% of California homes were built before 2010, including about 2 million in wildfire-prone areas, while roughly 3% to 4% of single-family houses list each year. Targeted climate-risk disclosures have previously shifted buyer searches and influenced sale prices, and insurers increasingly seek evidence of risk reduction.

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