The only proof you need that many Californians are still living in a water fairy tale is the fact that California real estate prices haven’t yet collapsed. Even as the California Governor has declared a state of emergency — and emergency water rationing is under way — there are still people purchasing commercial and residential real estate in precisely the areas that will be hardest hit by that rationing. What is the value of a home or business that has no functioning connection to a water system? Essentially ZERO.

How many California homes and businesses are headed for a zero-water future? Many millions. How many Californians are aware of all this and already have their homes on the market so they can move somewhere else? A very small number… a tiny fraction of the total number of home and property owners invested there. What these people are unfortunately not yet seeing is the catastrophic consequences of a continued drought and how it can utterly destroy the value of their property.

To understand what’s coming, you first need to understand the dynamics of real estate valuations. Here’s a question for you: How many homeowners selling their homes does it take to collapse real estate prices? The answer may surprise you. On any given day in most areas, fewer than 1% of homes are for sale. (99+% of homes are not for sale.) FULL REPORT