Is AZ going to run out of water!?

29 Replies

Originally posted by @Joe Splitrock :

@Thomas Corley there is something unsettling to me about a place where no natural water exists. If I dig a hole in my back yard, it will fill with water. I find that reassuring. I grew up in the land of 10,000 lakes, where you couldn't drive in any direction without running into a body of water in less than 10 minutes. 

There is only so much water in the rivers and other states need the water too. Of course the ocean contains a large supply of water and desalination is a viable solution.

I think we really put it in perspective when lake Baikal has something like 30 to 50% of all the fresh water on earth :)

Ag takes the vast majority of the water.  those are the industry that will be or could be really hurt in certain areas.

and of course we need food .. and Cotton  etc. 

Originally posted by @Thomas Corley :

Where are my AZ investors at!? I want to hear your thoughts on the water shortage in AZ (Phoenix area) and what you think it means for investors?

Is it something to think about if you’re a buy and hold investor?

Hi Thomas.

It's not an Arizona question of water shortage. Some areas, like Sedona, have an ample (500+ yr) supply of underground crystal clear, delicious water. However, Phoenix not only does NOT have sufficient underground water, and they do NOT get enough rain for their huge and quickly growing population. Phoenix water is 99% brought in from elsewhere. Specifically, from 2 main sources: the SRP (Salt River and Verde River) & the CAP (Colorado River). Any time a huge and quickly growing population relies so extensively upon water brought from elsewhere, I think the question of "Is this sustainable?", should be asked. In this case, I'd say definitely no.

Quite a few large lakes are drying up- lakes that are supported by these rivers. This indicates a problem. These lakes are drying and might actually disappear. Lake Powell, for example, is getting quite low and still dropping. If Lake Powell disappears, Lake Pleasant will go next. And on and on.

I believe this is a solvable problem. But we aren't there, yet. I've raised concern about this Phoenix water issue repeatedly in the past. I'm concerned the problem won't be solved until quite a bit of permanent ecosystem damage is done, as well as drastically impacting some of the stunning recreational sources our state has to offer.

Originally posted by @Chad McMahan :
Phoenix water is 99% brought in from elsewhere. Specifically, from 2 main sources: the SRP (Salt River and Verde River) & the CAP (Colorado River). Any time a huge and quickly growing population relies so extensively upon water brought from elsewhere, I think the question of "Is this sustainable?", should be asked. In this case, I'd say definitely no.

Phoenix has like 300 years of water reserves that they haven't even tapped. The city uses the same amount of water that it used 60 years ago, despite the population growing 7x.

Right now they are pushing the boundaries of direct potable reuse, but recycled water is still only 2% of their supply, because it costs about 100x more than surface water. Water is still dirt cheap there.

But keep in mind this is a place that hasn't really even tried to reduce water consumption. They don't have the same restrictions that even California has on residential use. There are no showerhead inspections required. People with older lots can still flood irrigate. They still grow alfalfa in the desert outside the city.



Originally posted by @Seth Borman :
Originally posted by @Chad McMahan:
Phoenix water is 99% brought in from elsewhere. Specifically, from 2 main sources: the SRP (Salt River and Verde River) & the CAP (Colorado River). Any time a huge and quickly growing population relies so extensively upon water brought from elsewhere, I think the question of "Is this sustainable?", should be asked. In this case, I'd say definitely no.

Phoenix has like 300 years of water reserves that they haven't even tapped. The city uses the same amount of water that it used 60 years ago, despite the population growing 7x.

Right now they are pushing the boundaries of direct potable reuse, but recycled water is still only 2% of their supply, because it costs about 100x more than surface water. Water is still dirt cheap there.

But keep in mind this is a place that hasn't really even tried to reduce water consumption. They don't have the same restrictions that even California has on residential use. There are no showerhead inspections required. People with older lots can still flood irrigate. They still grow alfalfa in the desert outside the city.

Hi Seth.

I definitely see the wisdom in general non-concern for the public. I sincerely appreciate that you are not concerned and see everything working out just fine. You are probably right, that it will be okay.

However, AZ and Phx government are working on the issue. And yes- it IS an issue. There is a lot of AZ/Phoenix government data showing water shortage is not a concern- which is the default response from government to many problems the government is facing and responsible for solving- and water supply is definitely a government responsibility and concern.

I've researched this issue pretty extensively for quite a few years, and I've lived in AZ for 30 years, which has given me perspective on how the state has changed due to drought over that time. This doesn't mean I'm perfect and I know everything- FAR from it. I've learned the embarrassing truth that I'm wrong sometimes. When I discover this I certainly change my position and move on. So far, I haven't seen anything that has assured me there is not a drought problem, impacting parts of AZ, or that Phx, specifically, is not impacted and needing to improve it's water usage and water supply in order to move out of the risk category.

If you cannot find good sources that reflect this, I recommend you read between the lines at http://www.arizonawaterfacts.c...

There are also other legitimate sources that provide facts on the issue, so everyone can form their own opinion.

More relevant to Bigger Pockets as an investment support platform, regarding AZ real estate:

Every state has it's issues. In this case, as I've been saying for several years, AZ buyers should be in great shape, with little to no investment impact from drought or water related issues, for quite a few years. Areas like Sedona are on the opposite side of this problem- I get calls all the time from buyers concerned about water, and they are happy to pay more to buy in Sedona, knowing they get a 500+ year clean water aquifer supply for a small population area (Not dependent upon sourcing from elsewhere), in addition to our strong ROI's, market appreciation, and the beauty Sedona has to offer.

To clarify my investment viewpoint- Phoenix is a GREAT place to invest short and long term. I recommend the Phx market in MANY real estate investing situations. Phx has great returns, demand, lots of buying options, across the board. The water issue is simply an important thing to be aware of, so you can monitor it, if public opinion turns the Phx market sour, or if Lake Powell, Lake Mead, Lake Pleasant or others disappear, the issue will be elevated, which will in turn change public opinion which can change the market.

I invest in Arizona, because we have great returns, great growth, and landlord-friendly government. AZ Economic projections I've seen look really good. I'm informed about many of the AZ issues, so I can stay ahead.

As another example, I also day trade in crypto- but I invest while understanding the volatility of the cryptos I invest in. I try to stay informed about crypto pros and cons, and support systems, as well as government and other attempts to undermine crypto. Being informed helps me to yield a better return, which in turn, fuels my real estate investing. I really don't care if others invest in crypto- my point is that I will always strive to be self-informed with pros and cons with anything I invest in. I'm sure you do the same, as you seem intelligent and simply reading and posting on BP is an amazing way to get informed. I love the audience here at BP. Great attitudes and lots of energy.

Real estate investing is the bee's knees. Everyone keep it up.

I'll button up my interaction with with this particular thread, as my goal is NOT to change anyone's mind, it's to inform. But if anyone has further questions, I'm happy to answer, just reach out to me privately.

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