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How Does Drought Affect Real Estate?

photograph of a dry corn field with brown grass

Properties can suffer damage from various causes such as hurricanes, fires, floods, vandalism, and even droughts. While droughts may not be commonly associated with property damage, they are indeed a natural disaster that can have detrimental effects on properties. By understanding how drought-related damage occurs, property owners can be better equipped to prepare for such situations.

Property Drought Damage

Droughts occur due to prolonged periods of below-average rainfall, resulting in dry conditions. In addition to causing damage to crops and vegetation, droughts can also have a significant impact on real estate.

Foundation & Structural Damage

While droughts impact agriculture and cause mass water shortages, they can also cause unanticipated commercial property damage to buildings. The primary way drought affects properties is through the drying out of soil and foundations. As the ground becomes parched from lack of water, it contracts and pulls away from the foundation, causing cracks and uneven settling. These cracks can allow water to seep into the foundation, leading to further damage and potential flooding.

For example, clay-based soil types dry and shrink when a drought occurs, resulting in uneven settling that can damage a building's foundation. While this damage may not be obvious at first, the signs of foundation cracking eventually become very apparent. When the soil shrinks, it can leave the foundation unsupported. Even deep foundations like caissons for bridge piers or drive piles for larger buildings can be affected as they rely on soil and concrete friction for stability. Low soil moisture causes contraction away from the foundation, compromising the bond. This leads to foundation cracking, damaged pipes, sloping floors, and warped windows and doors.

Infrastructure Damage

In addition to the buildings themselves, other elements of the property are susceptible to damage during a drought. Retaining walls, bridges, sidewalks, and pavement all face the risk of drought-related harm. Even asphalt is not spared, as it can experience significant strain from expansive soils during dry spells. Over time, this can lead to the development of deep cracks, along with warping of the pavement, resulting in billions of dollars in damages to streets and highways.

Fire Risk

Dry conditions brought on by droughts can increase the risk of wildfires, which can cause significant damage to land and property as a whole. Embers carried by strong winds can ignite structures, destroying homes and businesses. Additionally, smoke from wildfires can pollute the air quality for surrounding areas, making it difficult for residents to remain in their homes. Thankfully, there are things that property owners can do to protect their land from wildfires.

Decreased Property Value

Droughts not only cause physical damage to properties but can also decrease their value. A property located in an area prone to droughts may be less desirable to potential buyers, leading to a decrease in demand and ultimately reducing its market value. In addition, properties affected by drought-related issues may require costly repairs, further impacting their value.

Protecting Properties from Drought Damage

While it may not be possible to prevent droughts from occurring, there are steps that property owners can take to minimize the potential damage. These include:

  • Regularly inspecting the property for signs of foundation cracks and other issues.

  • Ensuring proper drainage around the property to prevent water buildup and soil erosion.

  • Implementing fire-resistant landscaping techniques, such as using less flammable plants and creating a buffer zone between structures and vegetation.

  • For agricultural properties, implementing water conservation measures, such as using low-flow fixtures and collecting rainwater for irrigation, can assist with mitigating the damage from droughts.

Droughts can have significant impacts on real estate, from causing foundation damage to decreasing property values. By understanding how these natural disasters can affect properties, owners can take proactive steps to protect their investments. Regular inspections, proper drainage, and implementing water conservation measures are just a few ways to mitigate the potential damage caused by droughts.

Staying informed about current climate conditions and having a plan in place can also help property owners prepare for these situations. Fortunately, there are many free resources that property owners and real estate investors can use to monitor for and prepare for droughts. For example, the National Integrated Drought Information System (NIDIS) provides this information and more.

COMING SOON: Seasonal drought risk reports for any U.S. property will soon be available in LandGate’s free property reports and our LandApp tool. 

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