Growing evidence suggests air quality and environmental issues are playing a bigger role in how buyers and even insurers estimate property value. There are a number of ways real estate agencies can make use of available environmental insights in order to improve buyer engagement with their real estate listings and build trust over the long term.
Buyers Will Pay More for Good Air Quality
Modern home buyers are becoming more environmentally aware and less willing to compromise on factors such as air quality. Some realtors estimate that higher air pollution can reduce property value by up to 15% in comparison to properties with similar features and statistics in better air quality areas.
After studying data from 85 Chinese cities and looking at PM10 levels, income and economic activity, researchers concluded that “the willingness to pay for clean air increases about 2.8 times if the average resident gets a higher income. Households in larger cities (first-tier) are 3 times more willing to pay for clean air.
In another REALTORS® survey, 59% of Realtors say they’ve found clients are interested in sustainability, and according to the National Association of Home Builders, energy efficiency and indoor air quality are top buyer preferences: “…the most attractive green features for home buyers are those that help them save money on energy costs as well as those that improve the air quality inside their homes,” said Rose Quint, AVP of survey research at NAHB.
Wildfire-Prone Zones Result in Higher Insurance Premiums
A 2021 Wildfire Risk Analysis by Verisk identified over 4.8 million US homes as facing a “high” or “extreme” risk of wildfire damage. Due to the devastation of record-breaking wildfire years and the increasing unpredictability in wildfire seasons, many traditional insurers have stopped renewing policies and refuse to insure properties in known wildfire zones.
This implied liability of wildfires is already affecting insurer decisions regarding policies and premiums and may cause affordability issues: RAND researchers project that by 2055 some of California’s highest-risk zip codes will see a 5% point drop in insurance market share, an 18% point increase in premiums per $1,000 coverage, a 6.5% point drop in coverage/property value ratios, and a $121 increase in deductibles per $1,000 of coverage.
How Real Estate Agencies Can Communicate Pollution Risk
a) Add Live Environmental Data to Real Estate Listings
Ensuring real estate online listings get seen represents an ongoing challenge for many property companies. The key to success here is highly engaging and sticky content that will keep prospective buyers returning to a particular online experience, and even recommend it to their friends.
Visualizations of environmental risk through dynamic color-coded air quality heatmap visualizations can also deliver new added layers of comparative context to prospective and current buyers while boosting engagement with web and app real estate shop fronts in new creative ways:
b) Deliver Personalized Pollution & Environmental Risk Reports
One of the most effective ways property companies can improve transparency is to provide potential homebuyers with a personalized view of their property’s environmental risk.
The below example from addressreport.com demonstrates how real estate companies can include environmental risk context in their reporting:
c) Help Predict Future Value by Charting Historical Environmental Exposure
A live air quality report only shows a property’s environmental conditions in a given time but where real estate investment is concerned, long-term exposure is also important to consider.
In the USA, a study that compared 20 air pollution level changes and housing prices in ‘non-attainment’ and ‘attainment’ areas (counties that met or failed to meet federal air pollution control efforts), found home prices increased more in non-attainment counties by about 4.8% in the first decade and 3.9% in the second decade, translating to an estimated $80+ billion and $50 billion in aggregate economic gains, respectively.
Historical environmental data can be used to display and compare averages of pollution exposure over certain periods of time, and communicate significant changes in trends. This added context can help buyers understand the future potential investment value of a property according to its environmental risk – is the property becoming more or less exposed to climate hazards such as air pollution and wildfires?
Real Estate Agencies: Win Trust by Taking Air Pollution & Climate Risk Seriously
Integrating air quality data and analytics into real estate listings via air pollution heatmaps, web widgets, or historical environmental data reports enables realtors to differentiate themselves from competitors and establish a reputable brand that provides full visibility into a property’s true potential environmental risk.
It’s a win-win scenario: as buyers receive a personally relevant and in-depth look into the environmental risk of the houses they’re considering, realtors improve their chance of creating online experiences that stand out and help to close deals.
