Housing Markets With the Highest Wildfire and Climate Risks

In This Article

I personally live in Los Angeles, so I wanted to calculate and measure which areas were already prone to wildfire risk, according to the Federal Emergency Management Agency (FEMA). Then, I took it one step further to analyze the climate risk across every market in the United States. 

Real estate investors (especially out-of-state investors) should be aware of the potential for natural disasters that may occur in their particular market, or they may want to consider investing in a more climate-resilient market altogether.

But first, let’s discuss Los Angeles.

Los Angeles’ Wildfire Risk by Census Tract

My heart goes out to the victims of the fire. I live in the San Fernando Valley, which has been relatively untouched as of now unless you count hazardous air quality. But I was particularly surprised when I saw FEMA’s breakdown of wildfire risk by census tract (census tracts can be thought of like ZIP codes for the purpose of this article):

In the middle of the map is the San Fernando Valley. If you look at the map, you’ll see the fires are occurring pretty much exactly within FEMA’s boundaries for wildfire risk (while census tracts with white “no rating,” like inner San Fernando Valley and the inner city, aren’t on fire).

Of course, just because an area is “at risk” for wildfire doesn’t mean it will catch fire, just that it might. 

Also, just because areas like the San Fernando Valley have virtually no wildfire risk (aside from poor breathable air quality), that doesn’t make them immune to other disasters like earthquakes. 

Los Angeles’ Earthquake Risk by Census Tract

If we toggle on the “Earthquake Risk Index,” we get a very different image:

Virtually all census tracts are at “Relatively Moderate” to “Very High” risk for earthquakes. 

The Los Angeles Fires: A Warning for Property Owners

Before we move on to analyzing the markets with the most (and least) climate and natural disaster risk, what lessons can real estate investors learn from the devastating Los Angeles fires?

The fires have been devastating for everyone in Los Angeles, especially those directly affected. While there are many lessons to be learned and applied at the municipal level to help better prepare for future disasters, this event should also serve as a warning for property owners to have adequate insurance. One source estimates that thousands of homes had their policies cancelled a few months before the fires, and not everyone renewed their policy in time. Renters and homeowners living in high-risk areas should also have emergency kits prepared just in case.

Markets With High Wildfire Risk

Now, let’s take a closer look at other markets that have a higher risk for wildfires and other climate-related disasters.

FEMA denotes “Risk” as the “Expected Annual Loss,” multiplied by the “Community Risk Factor” (which is their measure of how vulnerable a place is relative to its ability to prepare for anticipated disasters).

Most of the markets with the highest wildfire risk are along the West Coast and Southwest, which doesn’t surprise me. After all, the western United States generally receives less rainfall than the East Coast.

But we should also dig deeper into the data. The top five markets at the most wildfire risk are:

• San Diego-Chula Vista-Carlsbad, California
• Riverside-San Bernardino-Ontario, California
• Los Angeles-Long Beach-Anaheim, California
• St. George, Utah
• Oxnard-Thousand Oaks-Ventura, California

Factors that go into this risk score are things like “expected loss,” “housing cost burden,” “people aged 65 & older,” and more. This inherently makes sense: A community with extremely high housing costs and an elderly population would naturally be more at risk than a relatively young community with lots of housing options. 

We can see the immediate effects of the Los Angeles fires, displacing thousands of people in a market that already has a housing shortage. Now, there is an even greater imbalance between supply and demand, which will drive rents up even further.

The Least Resilient Markets

Now, let’s look at the least resilient markets overall.

Instead of looking at what FEMA defines as their “Risk Index,” I narrowed the data down to a metric they call “Expected Annual Loss Rate,” or EAL Rate for short. 

The EAL Rate is basically the amount of loss a market may expect to receive from a given disaster, divided by the total exposure a community has.

The trade-off is that this data does not include demographic information to determine communities at risk, such as the elderly and working-class population, unlike the wildfire map. I really just want to track disaster risk to existing buildings, which is exactly what the data shows:

Unsurprisingly, the riskiest areas are along the coast of the Carolinas, coastal Florida, and along the Gulf of Mexico. The majority of the West Coast is also fairly risky due to earthquakes and wildfires.

Here are the top riskiest counties:

• Galveston County, Texas (part of the Houston, Texas MSA)
  • $1 loss expected for every $123
• Orange County, Texas (part of the Beaumont, Texas MSA)
  • $1 loss expected for every $143
• McIntosh County, Georgia (part of the Brunswick, Georgia MSA)
  • $1 loss expected for every $158
• Onslow County, North Carolina (part of the Jacksonville, North Carolina MSA)
  • $1 loss expected for every $164
• Washington County, Florida (part of the Panama City, Florida MSA)
  • $1 loss expected for every $176

These markets may continue to experience severe weather events, which will damage buildings and drive up insurance costs (in addition to potential loss of life).

The Most Resilient Markets

We can also see that some of the most disaster-resilient markets are along the Great Lakes and near certain parts of the Rocky Mountains, such as:

• Monroe County, New York (part of the Rochester, New York MSA)
  • $1 loss expected for every $28,059
• Allegheny County, Pennsylvania (part of the Pittsburgh, Pennsylvania MSA)
  • $1 loss expected for every $20,660
• Kootenai County, Idaho (part of the Coeur d'Alene, Idaho MSA)
  • $1 loss expected for every $16,204
• Mesa County, Colorado (part of the Grand Junction, Colorado MSA)
  • $1 loss expected for every $14,087
• Erie County, New York (part of the Buffalo, New York MSA)
  • $1 loss expected for every $13,053

The Great Lakes states are also one of the more affordable places in the nation at the moment, and many markets there are still growing (in addition to having some of the best rent-to-price ratios). Any investor looking for cash flow and concerned with rising insurance costs may want to start looking in these markets for deals.

Final Thoughts

The 2025 Los Angeles fires have displaced thousands of people, owners and renters alike. For those affected, here is a great resource on what to do next. 

Unfortunately, this will not be the last disaster that occurs across America. There will be more, and insurance prices must go up in order to cover future catastrophic losses. Be mindful of your property’s location, and ensure you have adequate coverage (and a plan for you and your tenants) in case the worst happens. 

If you’re curious and want to learn more, feel free to browse through FEMA’s Risk Index map here.