Colorado Housing Market Enjoying A Major High

When Colorado legalized marijuana in 2012, most financial experts predicted that it would have a booming economic impact for the Centennial State. While cynics made snide remarks about the state being truly “mile high”, and the number “420” used in as many jokes as possible, Coloradans are having the last laugh. Or at least the last giggle.

Over the past 18 months, the state has benefited from legalizing weed. From a lower crime rate (10% decrease in overall crime, including a 5% drop in violent crime), to $10 million in taxes from retail sales of the sticky-icky, the economy has flourished since the opening of the state’s first cannabis shop. But beside this good news, and besides the new jobs and medical merits of state-grown weed, the underrated benefit has been the boost to the housing market.

In Denver, home prices have spiked up by double-digits, while inventory has dipped, as multiple offers and bidding wars have become the norm. In fact as far as major cities go, Denver has experienced the second-largest jump in annual home prices at 10%, with San Francisco coming in at a close second. How much of this housing good news is due to legally selling pot? According to James Paine, managing partner at West Realty Advisors, quite a bit. “There has been a huge bump in real estate prices due to the legalization of marijuana. It’s massively pushed up raw land and industry prices.”

It’s believed that one of the main reasons why more people are moving to Colorado, to Denver in particular, is the legalization of marijuana. The idea of having the freedom to spark up has people flocking to Denver and house hunting. Although not everyone wants to admit that they’re coming to Colorado to be part of the marijuana community, since pot smokers are still seen in negative light. However, with Colorado leading the way, we now have Washington, Oregon and Alaska as states who have legalized marijuana for both recreational and medical use.

Activists believe that there is no difference between having marijuana shops and having bars that serve alcohol. With nation-wide polls showing that a majority of Americans support some form of weed legalization (last Gallop had it at 51%), it appears that the stigma attached to smoking marijuana is slowly evaporating.

On the business side of the housing industry, there has been an increase in lease-to-purchase, and home rentals, for tenants looking to start growing operations. One downside is that sellers are having difficulties selling some properties due to neighbors growing too much. Also, if any first-time home buyers are looking for a home at the lower-end of the market, they may be in for harsh times. In general though, Colorado’s economic housing market has greatly benefited from these new “high times”.

How long can this real estate buzz last? Well like any financial boom, you can expect another five to seven years before a big bust. Colorado’s bubble may burst sooner than that, if more states legalize marijuana. At least they can always say that they were first and show off all of their initial accomplishments.