Submitted by Susan Rogers, Azusa, California, and answered by Dave Wald, visiting associate in geophysics at Caltech, and U.S. Geological Survey geophysicist.
When considering earthquake damage, it is important to distinguish between the effects of ground shaking and ground deformation (landslides, liquefaction, ground settling). In the Northridge earthquake, most of the damage was due to the strong shaking of buildings and their contents, but there was also a substantial amount of damage to foundations of buildings and residences caused by landslides and permanent ground settling.
Now, ground shaking is only marginally affected by the level of the water table. Whether or not the near-surface sediments are saturated with water does not significantly change the passing of seismic waves. So for shaking, for the most part, the level of the water table is not that important.
However, if the shallow sediments are water saturated (shallow water table) there is an increased chance of settling and landslides. If in addition the sediment is very sandy, the possibility of liquefaction is greatly increased and, therefore, the damage in such an area may be more widespread than if the water table had been deeper.