Quote from @Noah Corwick:
The water scenario has not affected the AZ market much at all yet. So far the only change that has occurred because of it is that Scottsdale has banned real grass from being used on new builds or adding it to existing builds.
I think an interesting change will be if they put water restrictions on golf courses. Golf has grown so much, especially in AZ. They notoriously use large amounts of the CAP water supply and more of them are popping up.
Who knows what the future holds, but no signs are pointing to this topic slowing real estate down.
I disagree that it hasn't impacted the AZ real estate market. There is some rising concern from potential buyers that opt to "wait and see" or buy elsewhere. Based on feedback I get from clients, blogs I read here on BP, videos I watch online, when I'm interviewed for other podcasts, and some other sources, I'd say so far we have an impact of 10%+ to decreased sales. I expect this number to rise over the next 5 years, and if AZ cannot get some better water solutions in place within the next 5-10 years, it could be much more significant. The good news is that Phx has been storing drinking water underground for years and has collected quite the nest egg, for when it's needed. But, it's a rationing solution, not a long term solution.
Phoenix may be headed for trouble with its massive population, strong and population growth, and dependence upon river water from outside the state.
Interesting AZ water trivia:
-72% of AZ water use is agricultural. Of course, the majority of this use is when it's hot.
-Yuma provides 90% of the USA lettuce supply during the winter.
-The challenge is, farms providing important winter crops can not stay in business if they only farm during the fall/winter- they must also make money the rest of the year, so to stay in business they farm this dry state year-round, using a lot of water in the process.
When I first learned about the high use of water by farmers in Spring/Summer, I knee-jerked a bit. But saying they need to stop this is not realistic. However, it may be realistic to require that in the warmer months they only plant crops that use less water- there are some that are quite profitable.
My educated guess- is this would reduce AZ water use by 5-10%, which is quite significant.
All the above being said, areas that have an abundance of groundwater, like Sedona, are in great shape for water.
