Real Estate Interests Say Lack of Jobs, Not Fracking, Hurts Home Values

June 5, 2014
By

LOVELAND — It’s an article of faith among fracking foes that oil and gas production depresses housing prices, but that hasn’t been the experience of Bob Skillman, president-elect of the Loveland-Berthoud Association of Realtors.

Skillman says he sells a lot of houses in Weld County, the heart of the state’s oil and gas boom, and “that’s never been an issue.” In fact, he worries that Colorado’s anti-fracking movement may cause real-estate prices to dip by kicking the legs out from under the state’s economy.

He’s already seeing it happen, even though the statewide anti-fracking initiatives proposed by Democratic Rep. Jared Polis are still awaiting the results of a challenge before the Colorado Supreme Court.

“Statewide, I’ve already talked to clients who have said they’re going to sell their jobs and rent because they don’t know if they’re going to have a job after all these votes go through,” said Skillman. “They’re in the oil industry, and that’s a big chunk of our income, too.”

He’s hardly alone among realtors. The association voted last week to oppose Loveland’s Question 1, the proposed two-year fracking moratorium on the June 24 ballot.

The pro-business group Vital for Colorado last week released a list of 2,400 Colorado leaders, businesses and community associations that oppose the statewide anti-fracking push, including at least eight realty companies.

Rachel Nance, Vital for Colorado senior consultant, said she’s spoken to a number of real-estate brokers and property managers who say the demand for housing has driven up prices and tightened inventory in communities near oil and gas development.

“I’ve talked to several property managers who say, ‘My clients are these great people making an excellent wage up here, have been doing so for more than a year, and are now asking, “Hey, can you help me go buy a home? Because it looks like I’m going to be here for the long term,”’” she said.

Even so, Protect Our Loveland organizers warn that property values are at risk unless voters approve Question 1.

“It’s been proven now–in the articles I’ve been pulling, the realtors are saying people won’t even look at a home that’s anywhere near fracking,” said Protect Our Loveland volunteer Sharon Anhorn.

Polis said Sunday in an interview on Fox31 that research indicates fracking is tough on housing prices.

“A recent study shows it reduces your property values by 4 to 15 percent,” said Polis. “In many cases, it can put you underwater on your mortgage. Of course people are going to be upset. And that’s really the reaction that you’re hearing right now.”

He appeared to be referring to a University of Denver Daniels School of Business survey released in August that showed a 5 to 15 percent reduction in bids for homes “located proximate to fracking scenarios,” said professor Ron Throupe in a press release.

The DU study has been hammered by critics as slanted. Rather than examining trends in housing prices, researchers called 550 homeowners in Houston and the Florida-Alabama panhandle and asked them to “imagine that they were going to consider bidding on a house,” according to the release.

“They were told that an energy company had bought the rights to inject a pressurized mixture of water, sand and chemicals into a lower groundwater aquifer to recover natural gas under the property they were considering buying,” said the release. “The drilling equipment was over a quarter mile away and visible from the house. The house is on well water from a shallow aquifer, separate from the lower aquifer the natural gas is being recovered from. The process, they were told, was expected to go on for five years.”

Simon Lomax, Denver-based spokesman for Energy In Depth, an industry-backed research and advocacy group, called the “so-called study” a “joke.” He noted, for example, that fracking in Colorado takes place in shale and rock formations a mile underground, not groundwater aquifers.

In addition, the fracking process lasts about 3 to 4 days, not five years, in the life of a 30-year well. A typical drilling operation lasts about a month, after which the area undergoes reclamation and a completion station replaces the tower and construction site.

Lomax called the DU survey “nothing more than a telephone push poll that asks loaded questions based on the talking points of anti-energy activist groups.”

“The findings are totally debunked by the experience of Weld County, where home values and oil and gas development are rising together, and even the realtors from the congressman’s district say he’s wrong,” said Lomax.

Mindy McLoughan, CEO of the Loveland Chamber of Commerce, said the bottom line is that if people don’t have jobs, they don’t purchase homes.

“Real estate is taking the chamber’s side, because oil and gas brings people to the community by bringing jobs,” said McLoughan. “Those individuals buy houses.”

Comments made by visitors are not representative of The Colorado Observer staff.

2 Responses to Real Estate Interests Say Lack of Jobs, Not Fracking, Hurts Home Values

  1. Brooks Imperial
    June 5, 2014 at 12:45 pm

    Without misinformation and propaganda, the Left would have nothing to say.

  2. Brian Mcfarlane
    June 5, 2014 at 10:04 pm

    How far did home prices go down starting around 2009 … %50? In 2008-2012 the economy was very slow historically. Home prices were way down because people were losing jobs. Prices are finally returning, a “ban” on drilling would certainly affect employment and home prices negatively.

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