Properties in California's Central Valley have experienced significant value loss due to land subsidence from excessive groundwater pumping. A study revealed that homes in affected regions lost 2.4% to 5.8% of their sale value, translating to an estimated loss of $6,689 to $16,165 per home. Overall, the total losses across the Central Valley reached $1.87 billion. Groundwater extraction has increased to support agriculture during droughts, leading to severe subsidence that damages infrastructure, wildlife habitats, and water storage capacities in the region.
"Basically, the land is sinking and so are the property values," Mehdi Nemati, a UCR assistant professor of environmental economics and policy who led the study, said in a press release.
According to the study's authors, farmers in the area have been increasingly relying on groundwater to keep their fields fertile, especially during periods of drought, sending land sinking into overdrive.
Land subsidence happens when groundwater is pumped out faster than it can be naturally replenished, causing underground layers of clay and silt to pancake and the land surface to sink over time.
All told, land subsidence has resulted in $1.87 billion in total house value losses across the Central Valley, according to the 49-page analysis.
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