How Climate Risk Is Changing Home Prices and Insurance Costs in LA

By Tammy Jerome

Tammy Jerome is an award-winning broker and host of “Selling Los Angeles” on the acclaimed American Dream TV show, with over two decades of experience and more than 1,500 successful transactions.

When searching for a home, most people notice the granite countertops and the view, not flood zones or wildfire maps. That’s normal. But those fine-print details are starting to matter more than ever.

Across the country, climate risks like flooding, wildfires, and extreme heat are no longer just environmental concerns. They are actively shaping home values, insurance rates, and even whether a bank will approve your loan. Mother Nature has officially entered the housing market.

If you’re buying, selling, or just trying to understand your community, you need to know how these risks influence real estate and what you can do about them.

Flood risks. While these are nothing new, the frequency and speed of these events have changed the game. In many parts of the country, properties that never flooded before are seeing record-high water levels.

FEMA has been updating its flood maps, which can suddenly shift a home from a “safe” zone to a “special flood hazard area.”

Here’s the kicker: if your home is in a high-risk zone, lenders will require flood insurance. This insurance is not cheap. A new map designation can quickly turn a previously affordable home into one that is out of reach for many buyers.

For sellers, you may need to adjust your price expectations or highlight your home’s resiliency. Features like raised foundations, proper drainage, or flood vents can reassure potential buyers.

For homebuyers, before you fall in love with a property near water, check the FEMA Flood Map Service Center. A few minutes of research can save you from a massive headache and a hefty premium later.

Wildfire zones. A mountain or canyon view can be hard to beat, until fire season arrives.

In many parts of the West and South, wildfire risk has become a major concern for insurance companies. Some insurers have stopped offering coverage in high-risk areas. Others are raising premiums or requiring homeowners to make specific improvements before issuing a policy.

Because of this, buyers are now asking a new question early in the process:

Will I even be able to get insurance for this home?

That question alone can change demand.

Some homeowners are getting ahead of the issue by creating defensible space around their homes, installing ember-resistant vents, or using non-combustible materials. These steps make homes safer and can sometimes lead to insurance discounts or wildfire-resilient certifications.

In parts of California, communities with strong fire-prevention programs, such as neighborhood fire breaks and hardscaping, are holding their value better than similar areas without these measures. Preparation makes a difference.

Extreme heatwaves. Extreme heat may not feel as dramatic as a flood or wildfire, but its effects add up over time.

Higher temperatures impact comfort, energy bills, and long-term livability. Many cities are now mapping urban heat islands, areas that stay hotter because of dense pavement and limited tree cover.

Buyers are beginning to notice the difference between a home shaded by mature trees and one exposed to the sun all day. Appraisers are noticing it too.

Neighborhoods that handle rising temperatures better, through green space, energy-efficient materials, and thoughtful design, are becoming more desirable. Think of heat resiliency as the new curb appeal. Homes that stay cooler are more comfortable to live in and tend to hold value better.

What can you do to protect your home? Climate risk does not mean you should avoid certain areas. It means you should be informed.

Most importantly, talk to your insurance agent at the beginning of your search. Don’t wait until you are in escrow to find out that coverage is limited or sky-high. Being informed is the best way to make sure your dream home doesn’t become a financial burden.

If you have questions or need help figuring out where to start, feel free to call, text, or email me anytime at (818) 903-5854 or tammyjerome@gmail.com. I’m here for you 24/7