MYworldfix

A recent legal dispute has brought to the forefront the contentious issue of climate risk data in the real estate market. A New York couple, Andrew and Eri Uerkwitz from Chappaqua, has initiated legal action against Zillow and First Street Technology, claiming that inaccurate flood risk information displayed on their home listing severely impacted its sale. This case underscores a growing concern among homeowners and industry professionals regarding the potential for such data to misrepresent properties and cause financial detriment.

The Uerkwitzes put their Chappaqua residence, a 2,313-square-foot home with three bedrooms and four bathrooms, on the market for $1.15 million in April 2025. They had purchased the property in June 2022 for $1.1 million. Despite the local median time on market being just seven days, their home languished for months. The couple reported accepting two offers that were subsequently withdrawn, with prospective buyers citing the property's \"extreme\" flood risk rating of 9/10 on Zillow, powered by First Street Technology data, as the reason for their withdrawal. Other interested parties also reportedly shied away due to this flood risk assessment.

First Street Technology began its partnership with Zillow to provide climate risk data in September 2024. The Uerkwitzes' lawsuit, filed in mid-June, contends that the 9/10 flood risk rating inaccurately \"stigmatized\" their property as virtually unsellable at its true market value. They are seeking $500,000 in damages. Their complaint highlights that their property is not within a FEMA flood zone, has no history of flooding, does not necessitate flood insurance, and possesses physical features that should preclude a credible flood risk. Despite these claims, the home eventually sold for $999,000 in mid-August, resulting in a $100,000 loss for the couple.

The controversy extends beyond just flood risk. Zillow's platform provides climate risk ratings for various factors, including fire, wind, heat, and air pollution, each scored out of ten. While buyers can see the numerical rating on Zillow, detailed reports are accessible only through a paid subscription to First Street. For the Uerkwitzes' property, a 9/10 flood risk rating implied an 18% chance of one inch of flooding in the current year, a 96% chance in 15 years, and a 99% chance in 30 years. The lawsuit directly disputes the factual accuracy of this assessment.

The incident has also reignited a broader debate within the real estate sector. Robert Reffkin, CEO of Compass, has previously voiced concerns about listing portals displaying information like days on market, price reductions, crime reports, and climate risk data, arguing it disserves homeowners. He views such data as a negative insight used to attract buyers, akin to tabloids using sensational headlines. Reffkin's firm is currently engaged in a lawsuit against Zillow over its listing access policies, which ban listings publicly advertised for more than one business day before being entered into the MLS. Compass's marketing strategy often involves keeping listings private initially to generate interest before a formal market debut.

In response to the growing criticism, Zillow has defended its approach, with Chief Industry Development Officer Errol Samuelson emphasizing the importance of transparency for a healthy housing market. He argues that hiding information puts buyers at a significant disadvantage and that widely available listings enable buyers to make informed decisions. Since the Uerkwitzes' lawsuit was filed, Zillow has started incorporating FEMA flood rating information alongside First Street's data, with a disclaimer noting potential discrepancies. However, the Uerkwitzes assert that neither the FEMA rating nor the disclaimer were present when their home was first listed.

This ongoing legal battle and industry discussion highlight the delicate balance between transparency and potential stigmatization in the real estate market. The case raises critical questions about the responsibility of platforms providing climate risk data and the impact such information has on property values and market dynamics. As climate concerns become more prominent, the accuracy and contextualization of environmental data in real estate listings will likely remain a significant point of contention and evolution.