Central Valley home values sink with the land

In parts of the San Joaquin Valley, sinking land has become such a serious problem, it is beginning to depress home prices, new research shows.

- By Ian JAMES AND GRACE TOOHEY

SUBSIDENCE due to overpumping of water in the Central Valley has hurt home prices, a study found.

Homes in large portions of California’s Central Valley have been sinking, as have roads, bridges, canals and levees, as too much water is drawn out of underground aquifers.

Now researchers at UC Riverside have found that home sale prices are 2.4% to 5.4% lower than they would be if the land were stable, translating to per-home losses of $6,689 to $16,165. The paper looks at sales between 2015 and 2021.

Mehdi Nemati, a UC Riverside assistant professor of environmental economics and policy who led the study, said his team knew that sinking land was already affecting homes and homeowners across the Central Valley, with cracking foundations, dry wells, higher insurance premiums and increased stress. But he said they were startled by their results.

“We were surprised because land subsidence is not like flooding or wildfires,” Nemati said, describing those climate-fueled disasters as much more visual and sudden. “Land subsidence is a very slow problem.”

The economists found that land subsidence has lowered the value of homes across eight counties in the San Joaquin Valley by $1.87 billion over the six-year period.

“What this study does is tells us that it’s not just ground sinking, it’s a billion-dollar problem tied to decades of groundwater overuse,” Nemati said.

The study, published in the journal Land Economics, analyzed home sales and “vertical land surface displacement” across the San Joaquin Valley.