The majority of U.S. metropolitan areas where more than half of homes experienced intense drought in August have seen more people migrate in than move out in recent months, according to a report by Redfin.
In 34 of the 129 metros analyzed by Redfin, more than 50% of homes experienced intense drought in mid-August. Of these metros, 74% saw net inflows in the second quarter, meaning more Redfin.com users looked to move into the metro areas than leave. Twenty-three of the 99 metros Redfin has 2021 data for had more than 50% of homes experiencing intense drought in mid-August. Of those 23 metros, 70% saw net inflows during the second quarter of 2021.
“Many people take climate risk into consideration when deciding where to live, but other factors, like affordability, often take precedence given that rent costs are rising and monthly mortgage payments for home buyers are up 40% from a year ago,” says Redfin economist Sebastian Sandoval-Olascoaga. “Drought 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 dent their home’s value if a lack of water forces residents to leave en masse.”
Water supply issues have been raising concerns, as some of the fastest growing new-home markets in the country are also areas with extremely stressed water resources. CR Herro, vice president of innovation at Meritage Homes, told BUILDER in June 2021 that population shifts from the North to the South and into arid regions in the Sun Belt accelerated concerns about water supply. “Higher population, coupled with unmanaged water consumption at the residential and commercial level, are really a disaster in the making,” Herro said.
Thirteen of the metros analyzed by Redfin had 100% of homes experience severe, extreme, or exceptional drought in mid-August. Of these metros, six are featured on BUILDER’s 2022 Local Leaders list, including Dallas (No. 1), Austin, Texas (No. 5), San Antonio (No. 6), Las Vegas (No. 12), Sacramento, California (No. 26), and Salt Lake City (No. 46). Sacramento had the biggest net inflow, with 9,640 more Redfin.com users looking to move in than leave in the second quarter, followed by Las Vegas (8,597), San Antonio (5,335), and Dallas (4,964).
In an effort to conserve water, Nevada passed a law last year calling for the removal of “nonfunctional” grass by the end of 2026. Starting Sept. 1, Las Vegas homeowners will not be allowed to have swimming pools larger than 600 square feet.
In Utah, population growth is one factor causing the state’s Great Salt Lake to dry up, according to Redfin. While the Salt Lake City metro experienced a net outflow in the second quarter, surrounding areas, including Wasatch County, have seen populations increase in recent years. Should the influx of migration continue and the Great Salt Lake continues to dry up, toxic chemicals in the lake bed could get picked up in wind storms and poison residents.
Roughly 25 million properties—accounting for an estimated $17 trillion in value—in the metros Redfin analyzed experienced intense drought in mid-August 2022, up 42% on a year-over-year basis from 14 million properties and $12 trillion in value. The increase in the dollar value was partially influenced by rising home prices but is also related to where drought-prone properties are located, according to Redfin. Los Angeles, San Jose, and New York—three of the most expensive housing markets—were also among the metros with the largest number of homes facing intense drought in mid-August.
A large percentage of drought-prone metros are located in the Sun Belt region, which has seen an increase in migration in recent years as many people have been priced out of expensive coastal cities. According to Redfin, more people moved into areas facing high risk from drought, heat, fire, and flood from 2016 to 2020 than moved out. The 50 U.S. counties with the largest share of homes facing high drought risk saw their populations increase by an average of 2.5% during the same four-year period due to positive net migration.
