Property risk has been underpriced for some time, and is rapidly accelerating towards actual risk costs. Certainly, mitigations are important (and preventing identified failures in the future, as you mention wrt water supply), but the risk remains.
https://www.zillow.com/research/climate-risk-home-value-3493...
https://public.tableau.com/app/profile/zillow.economic.resea...
https://firststreet.org/methodology
https://news.ycombinator.com/item?id=42450680 (relevant subthread, but more focused on GSE securities exposure)