12-08-2025
Sinking land is driving down home values in California's Central Valley, study shows
Sinking ground in California's Central Valley is causing property values to sink, according to a new study by UC Riverside.
"When we see droughts, we see larger subsidence, we see more extraction of groundwater, we see larger subsidence, and that's a sign for many other problems, like water availability, job availability and so on," said Mehdi Nemati, author and UC Riverside Enviro Economics and Policy assistant professor.
Professor Nemati is part of a group of researchers looking into how excessive groundwater pumping is impacting the housing market.
To determine how this sinking is impacting home values, researchers used satellite-based radar data to measure ground-level changes.
They compared data on impacted areas in eight counties to nearly 200,000 home sale transactions, including San Joaquin and Stanislaus counties.
Researchers found the average losses ranged between $6,689 to as much as $16,165 per home. They estimated that losses totaled $1.87 billion across the region from 2015 to 2021.
One of the areas most impacted is San Joaquin County.
"What we see is in areas that are heavily dependent on agriculture jobs, and these areas also see larger impact of subsidence on housing value, which, again, that means subsidence is a sign of many other things, including labor market," Nemati said. "If you heavily depend on agriculture, that means less jobs and other things, which translates into housing value."
He also points to home buyers not wanting to buy properties where the land is unstable. Insurance limitations and higher maintenance costs from bad foundations and sinking roads are also making an impact, according to the study.
CBS Sacramento asked a realtor in Lodi if they've had any discussions about land subsidence impacting home values in the area.
"We do have regular meetings once a week at the board, which is a meeting and tour, and there's discussions of a variety of things, and there hasn't been any discussion of that at all," Schaffer and Co Realtors Co-Owner Margo Cook shared.
While realtors say the sinking ground hasn't swallowed up the housing boom just yet, researchers say the concern is there so long as the ground continues to drop.
"We can come up with a better understanding of where we are, what are the costs, and so, what are some of the benefits and what we can do in terms of policy in general?" Nemati said.
Nemanti said this issue isn't unique to just California. Desert communities like those in Arizona and Utah are also experiencing significant sinking of the land.
He hopes this study and the methods they used can be utilized by other areas in the U.S. and around the world.
