Federal rules for 2027 and 2028 require Arizona, California, and Nevada to cut Colorado River deliveries by 1.25 million acre-feet annually. Agents in Los Angeles, Las Vegas, Phoenix and San Diego say buyer concern is limited so far, but utility and new build costs could rise. AI Summary
Since the height of the pandemic housing market boom, markets across the Sun Belt region have witnessed an influx of housing inventory. But as some markets have been flooded with inventory, the region’s water supply has begun to dwindle.
Due to this, in mid-August, the U.S. Department of the Interior and Bureau of Reclamation finalized new operating rules for the Colorado River for 2027 and 2028. Water from the Colorado River is governed by the 1922 Colorado River Compact, which divvied up the flow of the Colorado River between upper-basin states, such as Colorado, Utah, Wyoming and New Mexico, and lower-basin states, which include California, Nevada and Arizona.
The modernization of an historic agreement
At the time of the compact’s negotiation, the annual flow of the 1,450 mile long river was estimated to be 15 million acre-feet, but it was later discovered that the river’s annual average flow is closer to 12.5 million acre-feet. Since 2020, however, the river’s average annual flow has dropped to 10.2 million acre-feet…