Falling Water Levels, Sinking Home Prices
Some Canadian homeowners are having a stressful start to the summer season; falling water levels at Ghost Lake reservoir have also led to falling property values.
Ghost Lake is a popular draw for tourists from nearby Calgary, but the local province has kept water levels low this season to protect the city from the risk of floods. Deputy Mayor Warren Wilson warns that property values could drop by up to 25% in the lakeside village.
Trans-Alta controls the water levels in the reservoir, and this year they’re keeping extra space in reserve for flood mitigation, almost 65 million cubic meters. Trans-Alta and the province government might bring the water levels up in mid-July, but have offered residents few assurances.
“It could take two to three weeks to refill the lake, which means we won’t be up to natural levels till the first of August,” said Mike Weinert, owner of the Ghost Lake Marina.
Weinert says that his business can’t survive multiple summers with no water available to boaters and tourists.
“They just keep telling us it’s an experimental thing, but we strongly believe that’s what they’re going to keep doing,” said the Deputy Mayor. “They say they are going to work with us but so far they’re not doing anything.”
Lake house property values are particularly prone to fluctuation with changing water levels.
“Typically a lake view and backyard access to boating and other watersports has commanded a substantial property premium,” said Chris England, Broker in Charge at Hampton Lake in Bluffton, South Carolina. “So it’s not surprising that home values will fluctuate in areas with high rainfall volatility that inhibits the use of the recreation or degrades the view.”
In California, lake house owners are suffering a similar drop in home prices; however, their problem is a lack of water, not a risk of floods.
Dramatic pictures of falling water levels in California’s Lake Oroville have come to symbolize the devastating drought. And even though there are still nearly 10,000 acres of water available for boaters, many Californians think the lake bed is bone dry.
As the second largest reservoir in California continues to dry up, so will the property value of nearby homes.
“The ability of a property owner (and prospective buyers) to predict how weather patterns and the local water management system will impact the usability of their lake likely holds a strong correlation to how much property values might be impacted,” said England.