The Great Migration: Your clients are fleeing environmental risk, and we have the data

A silent, yet powerful, force is reshaping the American real estate landscape. It isn't a job market boom or a low-interest-rate environment; it's the escalating cost of environmental risk.

In January 2025, two devastating wildfires broke out in Los Angeles, California, damaging over 13,500 properties and resulting in more than $40 billion insured losses. Just months later, heavy thunderstorms dropped more than 10 inches of rain over a single July 4th weekend and triggered the deadliest flash flood event in U.S. history since 1976, causing an estimated $1.1 billion in damage to residential buildings.

These “once in a lifetime” events are now happening more frequently, and they are tangibly influencing where people choose to live. The Sun Belt, which has been a popular migration destination for years, is now seeing noticeable declines in its housing market, with major metros in Florida and Texas experiencing price reductions.

This is the new "Great Migration": a trend driven by homeowners, investors, and businesses subtly shifting their focus from affordability and school districts to long-term adaptability. The question for real estate and financial professionals is no longer if this migration is happening, but whether you have the data to understand where your clients are going, and where your next opportunity lies.

The silent cost of risk

The traditional real estate metrics of the past (like median home price, days on market, and local employment data) are no longer sufficient. A home’s value is now fundamentally tied to its resilience. This is a lesson being learned the hard way across the country as homeowners and lenders are confronted by:

1. The coverage crunch: A growing number of major carriers are exiting or pulling back from high-risk areas, a trend particularly visible in the Wildland-Urban Interface (WUI) and coastal regions. This has driven unprecedented reliance on state-mandated insurers of last resort, such as the California FAIR Plan, whose roll-book has swelled to more than 452,000 policies in 2024, more than double the 2020 total. This contraction is also spreading inland, with reports of similar squeezes in Colorado and Oregon, leaving homeowners with few options and soaring premiums. In some wildfire-exposed regions, premiums have soared nearly 60% in five years.
2. The underinsurance shock: When total-loss events, such as the 2025 Los Angeles wildfires causing more than $40 billion in insured losses, occur, homeowners often discover that their dwelling limits, set years ago, lag true reconstruction costs by six figures or more. The scale of Los Angeles’ rebuilding task is magnified for many residents who discovered they were under-insured in the aftermath of the fires. Cotality’s analysis found that typical payouts in fire-hit Los Angeles neighborhoods do not cover rebuild estimates, leaving significant gaps that many families cannot absorb. This gap, known as an insurance-to-value (ITV) problem, is a major barrier to rebuilding and can force families into financial ruin.
3. The mortgage domino effect: The consequences of a shrinking insurance market cascade straight into mortgage underwriting. Every conforming loan requires property insurance, and the premium is counted in the borrower's debt-to-income (DTI) ratio. In regions where premiums have surged, many entry-level borrowers now fail automated underwriting or must slash their purchase budgets, creating liquidity traps and stalling the market. The financial squeeze of force-placed coverage after the 2025 fires appears in the Cotality True Standings Servicing data, which showed that in Los Angeles County, payments that are 30 to 119 days past due (DPD) climbed from 1.87% in December 2024 to 2.22% in February 2025, while Ventura and Orange counties saw their delinquency rates decrease over the same period. This proves the direct correlation between physical risk and financial stability.

These forces are directly influencing where people choose to live, whether they're buying their first home or relocating their business. As a result, a new landscape of real estate winners and losers is emerging.

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Unlocking the data: Tracking the migration with Cotality

For too long, the industry has operated with a dangerous blind spot, relying on broad, regional data that fails to capture the true, hyper-local nature of environmental risk. That era is over. Cotality’s platform provides the data to truly understand this migration, revealing how it is unfolding, not just at a national level, but at the individual property level. We analyze 99.9% of US properties to track and quantify environmental risk down to the individual address, giving us a unique, data-driven view of where people are going. Our anonymized, aggregated data reveals a clear and quantifiable trend:

• From coast to inland: While coastal cities have long been real estate hotspots, we are seeing a shift in buyer interest toward inland communities with lower risk profiles. In Virginia Beach, VA, homes stayed on the market 32% longer in 2025 than in early 2024. A Cotality study also found that homes in Miami’s 100-year flood zone saw a reduction in value of between 9% and 18% per square foot. The average Reconstruction Cost Value (RCV) of homes in lower-risk inland counties is rising at a higher rate than in comparable coastal communities.
• Wildfire exodus: In states like California and Colorado, our data shows a measurable drop in property values and a rise in days on market for homes with high wildfire risk scores, while demand for nearby, lower-risk properties is accelerating. In fact, our data shows that nearly 1.2 million homes, roughly half of all homes with elevated wildfire risk, have a very high wildfire risk. The LA County dashboard showed fewer than 50 rebuilding permits issued by late May for the thousands of homes lost in the January 2025 fires, a stark sign of recovery stalled by contractor shortages, high costs, and underinsurance.
• The floodplain fallacy: Even within a single city, we see buyers avoiding properties within or near traditional floodplains and favoring those on slightly higher ground. The July 4, 2025, Central Texas flash floods caused an estimated $1.1 billion in damage to residential buildings, with only a limited effect on primary insurers because flood insurance penetration in the region is sparse. This disaster, classified as a 1,000-year rainfall event, demonstrated that even properties outside the 500-year floodplain can suffer heavy losses, proving that a “low-risk” zone does not mean zero risk.

This data allows professionals to move beyond guesswork and into a world of concrete, actionable insights.

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The science behind the perspective

This is not a theoretical exercise. Our ability to track this migration is powered by the same engine that provides our industry-leading risk analytics:

• CoreAI-powered risk modeling: Our platform is powered by CoreAI, which is designed to see the patterns that are invisible to traditional approaches. It combines 13 industry-leading peril models with machine learning algorithms to provide a level of insight that is both comprehensive and precise. This allows us to deliver over 20 detailed risk measures, including crucial metrics like Average Annual Loss (AAL) and Probable Maximum Loss (PML) calculations.
• Data ingestion at scale: We process over 100 billion data points from a vast array of sources, including satellite imagery, weather stations, topographic surveys, and building characteristics. We use this comprehensive, granular data to create the most extensive and accurate account of physical risk available today, from fire fuel loads and slope to the precise elevation of a single property.
• Hyper-local property data: We deliver address-level insights that account for microclimates, local topography, and specific building characteristics. This is what allows us to see how even next-door neighbors can have different risk scores due to their property’s slope, aspect, fuel, surface composition, and winds. For example, Cotality’s analysis of the 2025 Los Angeles fires found that 75% of properties within the Eaton fire perimeter were rated low-to-moderate wildfire hazard but also had a high conflagration hazard, a key risk traditional models miss.
• Predictive foresight: Our models don't just tell you about the past; they forecast the likelihood of future events. We provide 30-year projections and allow you to test your strategies against multiple climate scenarios. This means you can show a client not just the current risk, but what a property's risk profile will look like in 2050, helping them make a truly informed, long-term decision.

We believe that to truly understand the future, you must combine the power of predictive models with an unprecedented level of granularity where it matters most.

The future is in your hands

The Great Migration is not a prediction; it's a measurable reality. It is a defining trend of our time, and it is reshaping the very foundation of the real estate and financial markets. For too long, the industry has operated with a blind spot, relying on outdated models and guesswork. That era is over. The professional who uses this data will not just survive; they will thrive. They will be the first to spot new opportunities, the most trusted advisor to their clients, and a key partner in building a more resilient future. The path forward is clear.

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