When marijuana became legalized in Colorado many feared the repercussions. While late night dining establishments and 24 hour snack food emporiums may find the new law appealing for its money-making potential, homeowners and buyers alike share a less enthusiastic attitude. That being said, is the legalization of marijuana all that destructive to the Denver market?
A few things to consider in the “con” column
On some level, the legalization of marijuana has laid the groundwork for Colorado to see some decrease in interest from outsiders. You just might hear families turn down otherwise planned ski trips, or out-of-state residents reconsidering relocating to Denver. That being said, there are more tangible downsides that have seemingly cropped up since the new law went into effect. In the short time since pot has become legal, the most apparent negative impact that has sprung in the early stages is an influx of homeless on Denver streets tied to the availability and legal access of marijuana. The influx of homeless may be tied to other reasons in addition to pot, but there is a high correlation with the timing of the influx of additional homeless and the timing of the laws being enacted.
Whatever the media or locals to Denver may fear as a result of the enactment of the new law, it’s hard to disguise the equally noticeable pros.
Commercial success equals residential success?
As Denver opens its retail arms to marijuana businesses the success is translating into commercial real estate gold. What commercial real estate developers and agents are seeing is a furious rush to find suitable locations for retail and growth spots. Since the law—and not shockingly public opinion—limits locations for pot dispensaries and grow operations, industrial real estate has seen a significant boom. Other businesses in areas zoned for marijuana businesses are certainly seeing the effects of the boom in industrial space vacancies and rents. So what does this mean for Denver homeowners and home-buyers? The answer is simple: about the same.
The influx of pot dreamers looking to capitalize on opportunity need not only a space for their business, but also a roof of their own. What we see today, as a result, is an increase in rents across the city. Some neighborhoods are seeing upwards of double even. One present motivator for people to purchase rather than rent is the built in equity in homeownership. As rent continues to rise in Denver as a result of new migrating workers relocating to the city, homeownership becomes more attractive. Moreover, what industry folks, and local residents, failed to foresee is the churning in real estate values due to a burgeoning new industry. That being said, real estate developers are also having dreams of grandeur as older properties, especially in and near pot-approved zones, are being primed for remodel into new homes and condos. While this spells real estate boom for Denver, it isn’t without the inevitable critiques or the changes. Overall, marijuana legalization has spelled a swell in for the Denver housing and rental market, but it hasn’t come without its costs—that of a change in the cultural makeup of the metro.
So how do Realtors address the change?
Colorado as a whole will continue to be the model by which other state governments act in pursuit of legalizing marijuana and developing an implementation plan around it, or it will become the example used to repel legalization in other states. It’s still too early to tell due to a lack of trending data. With that said, a great feature of Colorado, and especially Denver’s, implementation has been in zoning where retail and grow operations can reside. Generally, homeowners should notice an increase in demand and home prices as the population grows, but there are things to consider when looking to buy or sell your home in Denver.
Homeowners will want to find a Realtor who is keenly aware of the location of marijuana businesses and the effects those businesses are having on the surrounding area regarding crime, property values, business migration to or from the area, and overall neighborhood condition. Secondly, if you live in an area in decline, an influx of drug use may be the thing that sends your neighborhood over the edge. Your agent can show you how to closely monitor the crime stats for your neighborhood and help you prepare for the sale if crime increases dramatically. Besides helping you save money, a good Realtor can help you spot trends, and find the information you need to determine how how your neighborhood is trending with these new conditions.
With the advent of the new law, Realtors are already coming face to face with the challenges of addressing concerns like these. While continued change—whether it continue to be positive or not—is merely an educated guess, but otherwise inevitable. The Denver market is currently in an upswing with the changing tide, and as other city and state governments look at what unfolds here it’s safe to say you’re better off being prepared to come to terms with change, and working with a Realtor who can help you navigate the new real estate environment it has created.
If marijuana sales prove to be directly responsible for the uptrend in real estate prices and demand, will this uptrend be short lived once the newness of the ability to access marijuana tires out? Also if additional states follow suit, will not being unique to favorable marijuana laws lessen demand for Denver real estate in favor of other states that recently passed similar laws? Did the marijuana laws create a future of growth in the Denver real estate market or just another real estate bubble? It’s too soon to tell right now, so all you can do is monitor your neighborhood’s statistics and just kick back and enjoy the real estate market high.