house: orzeczenie/iStock; smoker: WilliamSherman/Getty Images
Denver’s housing market has been hot, hot, hot this year; in some months, prices have risen more steeply there than in any other city.
We’ve often attributed that to the rise of the tech sector there. After all, those jobs tend to pay very well and, generally speaking, the higher paying the jobs, the more meteoric a market’s rise.
But perhaps there’s a more “homegrown” reason for the rise. According to the New Republic, a cannabis boom may be responsible for an outright housing availability crisis.
“In 2014, Colorado marijuana sales totaled $700 million, and the state expects to collect $94 million annually in cannabis taxes by 2016,” the New Republic reported. “But economic analyses about weed’s success never mention skyrocketing housing prices in Denver, a city that’s rapidly becoming unaffordable for all but the wealthy.”
Early on, the pot business was seen as a boon for Denver real estate.
“There has been a huge bump in real estate prices due to the legalization of marijuana,” James Paine, managing partner at West Realty Advisors, told CNN Money in June. “It’s massively pushed up raw land and industry prices.”
But, they said back then, it was still “relatively affordable.”
And what about now? The median home price in Denver, $350,500, is up 15.9% from this time last year. Vacancy rates in all sectors—residential, commercial, industrial—are all down, and so is unemployment. Home sales are up 3.1% from last year.
Coincidence? Maybe, maybe not—it’s hard to separate the boom in pot from the growth of other industries in Denver.
What’s for sure is that the city’s economic health has led to a serious increase in home values. While some folks are worried about the city’s affordability, others are basking in the glow of a market that has gotten very … high.
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