Colorado is raking in the revenue, thanks to its legality of both medical and recreational marijuana. But one issue that the state may not have looked into that deeply was the effect that legalization would have on the housing market, especially in Denver.
According to an article in CNN Money, “home prices have shot up by double-digits, inventory has fallen dramatically and multiple offers with bidding wars have become common.”
According to the S&P/Case-Shiller Home Price Index, in March, Denver had the second-largest jump in annual home prices at 10 percent, just behind always -pricey San Francisco.
One of the prime reasons for the rise in housing prices is the influx of job seekers coming in from out of state looking to get into the marijuana industry. Those jobs create real estate needs, housing needs and of course, job needs. The jobs aren’t just limited directly to marijuana businesess. Legalization has also created a need for security and electrical companies.
According to CNN Money, Denver and its surrounding areas have also become a hot spot for the tech industry and that has added to people heading there to search for employment.
Some real estate companies have also noticed an increase in lease-to-purchase or home rentals for tenants looking to start growing operations. That could create an issue. Another issue that presents itself is that although there is a rush for jobs in Colorado, some homeowners might be weary to sell or rent because of the fear of having an illegal marijuana operation being run on their property.
Colorado real estate agents warn that first-time buyers and anyone looking for a home at the lower-end of the market wil be dealing with major competition. Inventory has also been an issue in Denver. Usually, the city has around 24,000 listings. As of now, there are only around 4,000.