By Diana Olick | CNBC
California just experienced its driest January and February ever, and the snowpack is dangerously low. As the West enters its third year of drought, water sources are drying up, and restrictions on the Colorado River are now hitting all sectors of the Western economy, including homebuilding.
While there is a shortage of water, there is also a shortage of housing. The U.S. currently needs over a million more homes just to meet the current demand, according to an estimate by the National Association of Home Builders. Other estimates are even higher. As the millennial generation hits its prime homebuying years and Gen Z enters the fray, the supply of homes for sale is at a record low. Builders are hampered by high costs for land, labor and materials, so they are focused on the West and areas like the suburbs of Phoenix, which are growing rapidly.
On a vast swath of land in Buckeye, Arizona, just west of Phoenix, the Howard Hughes Corporation is developing one of the largest master-planned communities in the nation, Douglas Ranch, flooding the desert with housing.
Howard Hughes CEO David O’Reilly says water will not be a problem.
