The Effects of Legalizing Marijuana on Denver's Real Estate Market
The legalization of marijuana has had a big impact on the state of Colorado, and nowhere is that more apparent than the real estate industry. Experts are saying the market has been "permanently changed" by the new laws, and those differences are reflected in everything from property values to geographical hot spots. Denver is a great example of a changed city in Colorado. Filled with houses, apartments, condos and lofts, its buy and sell rates have spiked significantly since marijuana became a legal product in the state. So what if you're moving to Denver this year? Or what if you're trying to unload your home and move away from Denver? Both possibilities will require you to understand the current real estate market, so here's a quick look at how the legalization of marijuana has changed the Denver housing industry. Rising Prices
The biggest effect of legalizing marijuana has been a spike in real estate prices. Homes are going for twice and even three times what they used to, and certain properties can even start bidding wars when they're in the right neighborhood. If you're looking for a house near a "pot shop," you might find the rents steep indeed. "It's massively pushed up raw land and industry prices," explains James Paine, a real estate advisor. According to the S&P/Case-Shiller Home Price Index, Denver was behind only San Fransisco in real estate price inflation for the beginning of the year. It spiked 10 percent in one month alone. Less Inventory Another side effect of legalizing marijuana in Denver is a flood of new buyers on the market. Everyone wants to live in Colorado, and Denver, its capital city, attracts the biggest crowd. The problem with this is that there are only so many homes to sell. A few years ago, Denver had around 24,000 houses on the market. This year there are only 4,000. While determined buyers can still find a place to live, this sudden and staggering buy-up of Denver real estate has left experts a little concerned. "It can't last," says Kelly Moye, a realtor with more than two decades of experience. She predicts that the real estate boom has maybe five years left before it reaches critical mass. A New Future As you can see, there are both benefits and drawbacks to the legalization of marijuana in Colorado. Whether you're looking to buy, sell or flip a house in Denver, make sure you understand the market before entering it.
Sources: http://money.cnn.com/2015/06/04/real_estate/marijuana-denver-housing-market/ Gennady Barsky is a real estate mogul and the CFO of JetSmarter.