Will the California drought affect real estate?

Everyone is thinking it, so why not say it? Will the California drought affect real estate? Well, yes. But only to a small degree. The drought is a serious situation but I don’t see tons of people headed for either the Oregon or Nevada borders just yet.


We all have to watch our water consumption right now. My wife and I have to let our lawn go. The landscape of California will change, but prices in the Bay area will also go up as a result of the drought- not down. You see, there is an enormous opportunity to save water by mandating drought resistant plants. I know, this is easier said than done and not an immediate fix. But this small change can be part of the bigger solution. Instead of watering lawns, desert landscape or rock may have to be how homes are decorated from here on out. And, switching out high water crops – like almonds- may have to become the “norm” for now.

Within the Bay area, new development will have to become more limited. We can’t afford more people draining the water- literally. So, growth opportunities will have be stopped and this mean that the current housing will become more valuable and the pricing will go up! For the bay are the most extreme effect would be to limit new development which would make property values rise. The drought and dry Beijing has not reduced the real estate prices there. Instead, water was diverted from the Southern China to Beijing and home prices went up.

We didn’t make a lifestyle change in time to avoid the current situation and drought. We, as people, will have to change our water habits and the landscapes around our homes. This said, the drought panic isn’t real when it comes to real estate. Your home prices will stay the same – if not go up- if you’re asking me to look into my magic ball.

Until next time,

Sam Benson