Bloomberg: “Older Homes for Sale in California Now Come With Wildfire Warnings”
RFF Senior Fellow Margaret Walls discusses some of her research in the context of new policy decisions in California.
“‘When you require disclosure, you see effects on home prices,‘ said Margaret Walls, a senior fellow at Resources for the Future, a Washington, DC-based nonprofit research institute.
Walls and other economists’ research has shown that disclosing climate risks results in lower home prices, but that buyers are willing to pay more for safer properties. That, in theory, should motivate sellers to improve their homes’ resilience to climate risks. But such outcomes need to be validated by further research, according to Walls.
An analysis Walls coauthored published in the journal Land Economics determined that older homes in California sold for nearly 5 percent less when subject to a general wildfire disclosure. She said correlating home sellers and buyers’ particular actions with the new disclosure requirements will prove challenging.
‘You don't really know how people interpret the information they're given,‘ said Walls. ‘But drawing attention to these risks may make people step up and do more.‘”
