{"id":3456,"date":"2022-08-31T16:14:02","date_gmt":"2022-08-31T16:14:02","guid":{"rendered":"https:\/\/www.realtrends.com\/blog\/2022\/08\/31\/homebuyers-are-not-turned-off-by-intense-drought\/"},"modified":"2025-03-13T02:46:29","modified_gmt":"2025-03-13T02:46:29","slug":"homebuyers-are-not-turned-off-by-intense-drought","status":"publish","type":"post","link":"https:\/\/www.realtrends.com\/blog\/2022\/08\/31\/homebuyers-are-not-turned-off-by-intense-drought\/","title":{"rendered":"Homebuyers are not turned off by intense drought"},"content":{"rendered":"\n

More people are moving in than out of places experiencing intense drought conditions<\/a>, according to a report<\/a> from Redfin<\/strong> published Wednesday.<\/p>\n\n\n\n

In 34 out of the 129 (26%) metros analyzed, more than 50% of homes experienced intense drought in mid-August. Of those 34 metros, 25 saw net inflows in the second quarter of the year.<\/p>\n\n\n\n

A year ago, just 23% of the metro areas analyzed by Redfin had more than 50% of homes experiencing intense drought in mid-August and just 70% of those metros saw net inflows during the second quarter of 2021.<\/p>\n\n\n\n

\u201cMany people take climate risk into\u00a0consideration<\/a>\u00a0when deciding where to live, but other factors, like affordability, often take precedence given that rent costs are\u00a0rising<\/a>\u00a0and monthly mortgage payments for homebuyers are up nearly\u00a040%<\/a>\u00a0from a year ago,\u201d Sebastian Sandoval-Olascoaga, a Redfin economist, said in a statement. <\/p>\n\n\n\n

\u201cDrought may also not be scaring people off to the same extent as fires or flooding, which can physically decimate homes. Still, homeowners and buyers should be aware that drought danger could ultimately\u00a0dent<\/a>\u00a0their home\u2019s value if a lack of water forces residents to leave en masse.\u201d<\/p>\n\n\n\n

Redfin sees the influx of people to areas experiencing intense drought conditions as a part of a larger trend<\/a> of people moving to areas with greater climate risks. The brokerage found<\/a> that between 2016 to 2020, the 50 counties with the largest percentage of homes facing high fire<\/a> and flood risk<\/a> saw their populations grow an average of 3% and 1.9%, respectively. In addition, over the past two years, as interest and demand for second homes has grown, purchases of secondary homes with high flood, storm and\/or heat risk have risen nearly 40%.<\/p>\n\n\n\n

According to Redfin, roughly 25 million properties worth an estimated $17 trillion, experienced intense drought conditions in August, up 42% from a year ago, when just $12 trillion worth of homes were experiencing intense drought conditions. <\/p>\n\n\n\n

Redfin attributes part of this increase to strong home-price appreciation over the past year. In addition, many of the most expensive metro areas are drought prone, such as Los Angeles and San Jose, while other drought-prone metros lie in the Sun Belt, which has seen massive home-price growth over the course of the pandemic.<\/p>\n\n\n\n

Of the areas analyzed, 13 metros saw 100% of homes experiencing intense drought in August. California metros included Bakersfield, Visalia, Chico, Fresno and Salinas. Nevada metros included Las Vegas and Reno. Texas metros included Austin, Killeen, San Antonio, and Dallas. Salt Lake City also made the list. In all but Visalia and Salt Lake City, more people looked at moving into the area than out in the second quarter.<\/p>\n\n\n\n

Sacramento saw the largest net inflow of the 13 metro areas with 9,640 more Redfin.com users looking to move in than leave in the second quarter. Las Vegas, (8,597), San Antonio (5,335), Dallas (4,964), and Bakersfield (2,576) rounded out the top five.<\/p>\n\n\n\n

The water supply for many of these metro areas is the Colorado River<\/a>. After World War I, states in the Southwest came together to promote the development of the region. Part of this development was the negotiation of the\u00a01922 Colorado River Compact<\/strong><\/a>,\u00a0which divvied up the flow of the Colorado River<\/a>\u00a0between upper-basin states, such as Colorado, Utah, and New Mexico, and lower-basin states, which include California, Nevada and Arizona.<\/p>\n\n\n\n

The compact states that the upper-basin states must leave 75 million acre-feet in the river over each decade or an average of 7.5 million acre-feet per year, based on measurements where the river enters northern Arizona at Lee\u2019s Ferry. In addition, lower basin states can \u201ccall\u201d for more water during dry times and, thanks to a 1944 international treaty, 1.5 million acre-feet must remain in the river for Mexico.<\/p>\n\n\n\n

At the time of the compact\u2019s negotiation, the annual flow of the 1,450 mile long river was estimated to be 15 million acre-feet, but it was later discovered that the river\u2019s annual average flow is closer to 12.5 million acre-feet. <\/p>\n\n\n\n

In mid-June, federal officials, including\u00a0U.S. Bureau of Reclamation Commissioner Camille Touton<\/strong>,\u00a0announced<\/a>\u00a0that the seven Colorado River basin states must conserve an additional 2 to 4 million acre-feet of water just to protect critical reservoir levels in 2023.<\/p>\n\n\n\n

To curb water usage, Nevada passed a law<\/a> in 2021, calling for the removal of \u201cnonfunctional\u201d grass by the end of 2026. In addition, starting on Sept. 1, Las Vegas homeowners will not be able to have swimming pools<\/a> larger than 600 square feet.<\/p>\n\n\n\n

\u201cHomebuyers are expressing concerns about drought, especially now that the shrinking<\/a> of Lake Mead is all over the news, but drought risk isn\u2019t a dealbreaker for most of my clients,\u201d Lori Garlick, a Las Vegas-based Redfin agent, said in a statement. \u201cI did have one buyer back out of moving to Vegas because they were worried there wouldn\u2019t be any water in a few years, but they ended up moving to Arizona, which is also endangered by drought.<\/p>\n\n\n\n

\u201cIt will be interesting to see whether new water restrictions will affect migration to Las Vegas,\u201d Garlick said. \u201cSay you\u2019re a green thumb from California who\u2019s used to trees and lawns, and you\u2019re wavering between drought-prone Las Vegas and drought-prone Colorado. The rules limiting vegetation in Vegas might cause you to opt for Colorado.\u201d<\/p>\n\n\n\n

Over in Utah, population growth is one of the reasons why the Great Salt Lake is drying up. Experts say that if the water level continues to recede<\/a>, toxic chemicals in the lakebed could get picked up in windstorms and poison residents. Although the Salt Lake City metro area recorded a net outflow during the second quarter of 2022, surrounding areas, such as Wasatch County, have seen their populations grow in recent years.<\/p>\n","protected":false},"excerpt":{"rendered":"

Drought may not be scaring people off to the same extent as fires or flooding, which can physically decimate homes, Redfin says.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760],"class_list":["post-3456","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"\nHomebuyers are not turned off by intense drought - RealTrends - Blog<\/title>\n<meta name=\"description\" content=\"As the supply of fresh water dwindles, many of the metro ares impacted by intense drought continue to remain popular with homebuyers.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realtrends.com\/blog\/2022\/08\/31\/homebuyers-are-not-turned-off-by-intense-drought\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Homebuyers are not turned off by intense drought\" \/>\n<meta property=\"og:description\" content=\"As the supply of fresh water dwindles, many of the metro ares impacted by intense drought continue to remain popular with homebuyers.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.realtrends.com\/blog\/2022\/08\/31\/homebuyers-are-not-turned-off-by-intense-drought\/\" \/>\n<meta property=\"og:site_name\" content=\"RealTrends - 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