Searsville's economy depended entirely on logging. The forests of the Santa Cruz Mountain foothills supplied lumber for the growing communities of the San Francisco Peninsula, and Sears positioned his hotel and ranch to serve the men who did the cutting. The town sat at the confluence of several creeks, in a valley that was both productive and vulnerable. As the surrounding forests were depleted, the logging economy declined. Sears eventually sold his property and moved to La Honda in 1862, purchasing 400 acres there after his Searsville holdings were acquired by the Spring Valley Water Company.

In 1892, one year after Stanford University was founded nearby, the Spring Valley Water Company completed a masonry dam on Corte Madera Creek. The dam created Searsville Reservoir, which partially inundated the remains of the town. The hotel, the ranch buildings, and whatever remained of the logging community disappeared beneath the rising water. The dam was built to supply water, but ironically, Searsville Dam today provides neither potable water, nor flood control, nor hydropower. It simply exists, holding back a reservoir that slowly fills with sediment.

Searsville joins a small but notable category of California towns drowned by reservoirs. Unlike most such places, which were submerged to supply water to growing cities, Searsville's inundation served no lasting purpose -- the dam's original water supply function was eventually superseded by other sources. The town's memory persists mainly through the dam and reservoir that replaced it, and through the Jasper Ridge Biological Preserve that now protects the surrounding landscape. Somewhere beneath the reservoir's silt, the foundations of Sears's hotel and the stumps of logged redwoods share the same underwater darkness.