A ‘Big Short’ investor fears an often-overlooked climate risk could see history repeating itself in the housing market.

Dave Burt, CEO of investment research firm DeltaTerra Capital, was one of the few skeptics who recognized the real estate sector was teetering on the brink of collapse in 2007.

He helped two of the protagonists of Michael Lewis’ bestselling book “The Big Short” bet against the mortgage market in the lead-up to the 2008 economic collapse. As it turned out, they were right and made millions.

Now, Burt believes the mortgage market is underestimating another systemic issue: flood risk. If realized, he warns the fallout could resemble the massive correction seen during the global financial crisis.

“Ultimately, until people have good information about what these climate-related costs are going to look like, we’re creating new problems every day. I think that’s really the crux of the matter,” Burt told CNBC.

So, why does the U.S. housing market seem to be underestimating the cost of flooding? What does this mean for homeowners and homebuyers in the U.K. and around the world? And what can be done to mitigate this risk?

Watch the video above to find out.