The Central Valley in California is accustomed to dealing with natural calamities like wildfires, earthquakes, and floods. However, the real challenge affecting the housing market isn’t any of these familiar issues.

The issue that is having a huge effect on property prices in California’s Central Valley is the ever-sinking ground. 

Scientists have been worried about the Central Valley’s sinking for over a century, and now it’s time for real estate agents to worry too.

A recent study has revealed that the sinking is now affecting the local housing market, according to SFGATE. 

The ground level is sinking significantly, descending by nearly an inch per year. This rapid decline has led to a depreciation in property values of up to 5.8%, according to a study conducted by UC Riverside. 

In terms of dollars, homes in these subsiding areas have lost between $6,689 and $16,165 in value. 

Chen Zhao, the head of economics research at Redfin, mentioned to SFGATE that although home prices have been increasing in the area according to their data, the absence of this problem would likely have resulted in slightly higher growth. 

The total loss of all homes in subsiding areas came to a staggering $1.87 billion, the study estimated. 

‘Basically, the land is sinking and so are the property values,’ said Mehdi Nemati, a UCR assistant professor of environmental economics and policy who led the study. 

‘This is the first time anyone has quantified how much land subsidence costs homeowners in this region.’ 

California’s Central Valley incorporates Sacramento Valley in the north and San Joaquin Valley in the south. The area houses Sacramento, Fresno and Bakersfield, amongst other lesser-known cities. 

Land subsidence, which is what these areas are facing, occurs when groundwater is pumped out faster than it is replenished – which causes underground clay and silt layers to compact. 

The result of this is a gradual – but sometimes irreversible – sinking of land surface.

‘Think of a sponge,’ Nemati explained. ‘If you squeeze water out and never let it soak again, it flattens and hardens. That’s what’s happening underground.’ 

Authors of the study gathered subsidence data and compared it against almost 200,000 home sales across San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare and Kern counties.

They determined its effect on the home prices through applied statistical models. 

As the public becomes more aware of California’s sinking ground, it is becoming as much of a concern for homeowners as flood or fire risk. 

Subsidence has been an issue in the Central Valley since the 1920s, and the land has sunk as much as 30 feet in some places. 

This problem is not unique to California. Other areas worldwide are dealing with subsidence – including the Gulf Coast and the East Coast, where land subsidence can reduce home values by an average of 6 percent in affected areas.

Venice, Italy is well-known for its sinking land and both Jakarta, Indonesia, and Ho Chi Minh City, Vietnam, are seeing rapid subsidence – making both cities vulnerable to rising sea levels. 

The Indonesian government are even relocating the capital due to the city’s fast sinking.