Tuesday, April 4, 2017

The "Green Rush" and Humboldt County, CA Real Estate

The “Green Rush” is on!  People from all over California and  all over the nation are rushing to Humboldt County to buy up “grow properties,” land suitable for the growing of marijuana.  Has it affected the real estate market in Humboldt County?  I teased out some simple statistics to get a broad overview of this issue.
To get a baseline of the real estate market without the influence of “grow properties, “ I pulled up all of the single family homes sold in Humboldt County on city lots over the last 4 years.  These homes, by and large, shouldn’t be affected by the marijuana industry.  What I saw was a 17.6% increase in the average price of a home over a four year period, 2013 through 2016, with the number of units sold between 492 in 2014 and 520 in 2016.  That’s an average annual increase of approximately 4.4%, roughly on par with national trends.
Next I pulled all properties that have sold over the same 4 year period with at least 20 acres, including both homesteads and raw land.  While not all of these properties will be used to grow marijuana, most “grow properties” will fit into this sample.  These properties experienced an increased average sales price of 92% over the same four years, and a 69.6% increase over last year alone!
There’s no question that the “Green Rush” has had a huge impact in the Humboldt County real estate market, but it does seem that, for now, the effect is mostly limited to large agricultural parcels suitable for growing, and not general single family residential homes.