Water & the impact on the future of Real Estate in the American West

The extreme fluctuations between drought and extreme rainy seasons in the western United States is only getting more tragic. Experts believe that most western states will run out of drinking water in the foreseeable future. At present, Northern States are fighting for a bigger share of The Colorado River that 60 million people rely on to exist.   What most expect are more users and less supply.

What does this have to do to real estate values, and more specifically, bank lending in drought areas? This is an issue we will all need to deal with soon. If a solution to increasing water demand and massive decline in supply is not resolved, both state and local governments will experience declining taxation revenue as a consequence.  It will not be long before real estate lenders begin to factor in the impact of water in their underwriting on homes and business in some of the driest counties in the west.

How is this fixed?  Well, most experts fear having no answer for this potentially catastrophic problem which could shut down real estate lending, causing value concerns, and taxation problems in the near future. Praying for rain is not a solution, but here are three solutions that can make a difference:

*Desalination is a costly solution, but cheaper than the alternative.

*Conservation is also helpful, but not enough to solve the problem on its own.

*Greywater systems on all new development allows for the same water to be used multiple times.

With a little investment and foresight into our water issues in the west, we can avert this potentially catastrophic event and create a stable water supply allowing growth and propriety to the area.