Is climate change impacting real estate in the Southwest?
In the United States today, according to the real estate site Zillow, the two cities in the most trouble are Phoenix, where a little more than half than half of all homeowners are underwater — where debt outweighs the equity — and Las Vegas, where an astounding 70% of homeowners are underwater.
Is it a coincidence that these are the two biggest cities in the Southwest, where climate change is expected to hit brutally hard? Could climate change be contributing to this mega-downturn now?
Until someone goes out and starts doing some serious interviewing of folks in the real estate market, we're not going to know for sure, but we do have Tom Ashbrook's show on the subject from January, On Point: Can the Southwest Survive Climate Change? which was especially good. (To give an example of its quality, when an author of a book about the grim future of the Southwest claims he's not "in the prediction business," Ashbrook has a little fit, and forces him to answer.)
Ashbrook points out that we had record wildfires, record drought, and record temperatures in the Southwest last year He looks at two books, A Great Aridness: Climate Change and the future of the American Southwest, by William deBuys, and Bird on Fire: Lessons from the World's Least Sustainable City, and talks to the authors.
William deBuys points out that the predictions for temperature change in the Southwest have been underestimates, and that this century Phoenix will get 4-6 degrees C hotter. Andrew Ross points out that the growth in Phoenix and the Southwest has been largely driven by growth itself: People making money on construction, buying their own homes, buidling more. Growth has stopped now, and — as Ashbrook said — developments have been all but abandoned. Ross doubts it will return, and points out that Phoenix in our times has yet to experience a mega-drought (of sixty years or more) which are shockingly common in the long-term record. Could the suburbanization of the desert be over?
Included in the discussion s a notable figure in Phoenix, Grady Grammage, an attorney, developer, and believer in climate change, who sees high temps as the factor most likely to bring down his business. Yet Grammage insists that Phoenix is accustomed to planning for drought, that the region could support many millions of more people, and that growth will return.
Grammage in my personal experience is a more thoughtful and reflective figure than one usually encounters in real estate, but even so his claims that Phoenix is "fine" fails to convince.
"We call these places deserts for a reason," as Ashbrook said, "because they are often deserted."
From on high, NASA looked at a related issue — the urban heat island index in Phoenix — and by cross-referencing satellite data with sociological data found that the rich were clustering in areas of vegetation and permeable soil (green), while the poor were shunted towards downtown Phoenix, with impermeable surfaces and buildings reflecting heat (blue).
This week it reached 108 in Phoenix — 12 degrees above average for May.