An alluvial fan is the dirt, sand, gravel, rocks, and boulders which a mountain stream emerging from a canyon deposits at the mouth of the canyon. The alluvial fan Crestone is on extends for about 1 mile south and west from the mouth of North Crestone Canyon. Burnt Gulch, a intermittent stream east of Crestone, has also contributed material to the alluvial fan.
During normal stream flow Crestone Creek flows in a confined bed, but during flash floods it may escape its bed and establish a new course. It is hard for substantial tropical moisture to enter the San Luis Valley, but if unusual conditions exist it can and a substantial flood can occur. This can result in houses being washed away and a new course being established for the creek.