The ancillary benefits of legalizing cannabis are continuing to come to fruition in Denver, Colorado.
According to Re/Max real estate agent Kelly Moye, the city usually has 24,000 homes for sale during a normal market. Currently, there are only about 4,000 listings.
The limited inventory has caused a double-digit spike in home values. The S&P/Case-Shiller Home Price Index reports that Denver had the second-largest jump in the country with a 10 percent increase in March. The rental and lease side of the business has also picked up; in fact, one real estate agent reports that it is cheaper to buy a house than try to rent.
While there are several factors driving the growth, one explanation is that the marijuana industry has led to a large number of opportunities for employment.
“The pot industry is creating jobs we didn’t have before,”
said Moye, who has been an agent in Denver for more than two decades.
“It’s brand new, it adds a whole new factor to the area; you have real estate needs, housing needs, job needs.”
With so many people flocking to the city, the tech industry in the area has also experienced growth. Berkshire Hathaway Home Services agent J.P. Speers noted that mom-and-pop electricians have grown to become large companies.
Speers has seen both the positive and the negative effects marijuana has had on the housing market. The growth has sparked multiple offers and bidding wars, but has lead to a near unsustainable price escalation.
However, Speers noted that some buyers have hesitations. Many clients will not necessarily admit they have moved to Denver because of the marijuana industry. Further, in one case, Speers had difficulty moving a property because the home’s neighbors were growing a significant amount of cannabis.
People who are in the market for their first home or who need to stick to a budget may also have difficulty. With an influx of first-time buyers and steep prices, there is stiff competition in desired ares.
Moye said that as long as there is no major economic crisis, Denver could see a housing market run for the next five to seven years. Speers speculates that if other states begin to legalize recreational marijuana, it could detract from Denver’s boom.
Photo Credit: Huffington Post