Drilling and fracking have destroyed value of our most significant investment — our homes
Author: Adam Cox - January 18, 2013 - Updated: January 18, 2013
As the pace of oil and gas development increases in Colorado the controversy and impacts on our communities and public health have been well documented. However, one impact to Coloradans which not has received as much attention is how drilling and fracking has impacted Colorado’s real estate and the value of Coloradans’ most significant investment and nest egg — our homes.
As a managing broker of 40 realtors on the Front Range, I hear from brokers of potential buyers balk at buying a home near a drilling or fracking site, even though that’s often where the discounted homes are. The reason these homes have reduced value is that they are so close to oil and gas activity. The flip side of that same coin is that there are homeowners struggling to sell their home near these sites because of low buyer interest. They often have to sell at significantly lower prices than when originally purchased due to the oil and gas industry neighbors.
Many Coloradans describe moving into quiet suburban and ex-urban developments fully expecting to establish roots, raise families, or settle into well-earned retirements. This quintessential American dream is soon rudely interrupted when heavy industrial activity appears at their backyard fence, sometimes with little to no notice. They soon discover that oil and gas activity does not make a good neighbor. Besides the obvious intrusion of 100 foot drill rigs and 24 hour construction schedules next to bedroom windows, many nearby homeowners describe feeling like they are on the deck of an aircraft carrier rather than enjoying the solitude of a quiet suburban neighborhood or a rural ranchette. There are dramatic increases in truck traffic and noise. Nearby roads once nicely paved are soon chewed up by constant semi-truck traffic and the movement of heavy loads.
When wells are being initially drilled or fracked the sites are often illuminated 24 hours a day.
If these physical and quality of life disruptions are not enough, many Coloradans have described a litany of health impacts and irritations from living next to oil and gas drilling. In recent testimony at public hearings to attempt to establish safe distances between homes and drilling, landowners near oil and gas operations complained of nosebleeds, headaches, sick or dead animals and being afraid to drink the water for fear of potential contamination. Those concerns weigh heavily on any family looking to move to a community with an influx of drilling and fracking.
Because of drilling and fracking, we are seeing a high inventory of homes in communities where it is prevalent. There are a high number of sellers and a lack of interested buyers, leading to long turnaround times on homes in the area. Although the health of individuals should be tantamount when considering oil and gas regulations, the overall health of the community should also be considered. How healthy is a community if people are moving out of it while struggling to find buyers for homes they no longer want? Like the rest of the nation, Colorado saw a large downturn in the housing market the past few years. While our overall real estate market is one of the strongest in the country, homeowners in these areas now see their home values decline. There are broad swaths of Colorado — along the Front Range and in Western Colorado — which have been leased and are just waiting on the right market conditions to be opened for oil and gas drilling. If Colorado proceeds with this expected development, those unlucky enough to buy or invest in a home nearby could see a marked decrease in their homes value.
As our elected officials and state agencies move forward on how to address the impacts of our expected energy development, the health of Coloradans’ largest investment and the glue which keeps our communities whole — the value of our homes — should be an important part of the conversation. While we need the energy which comes out of the ground, Coloradans should not have to sacrifice our unique quality of life or trade off the integrity of our communities or the safety of our homes and neighborhoods.
Adam Cox is a district broker at Zip Realty in Morrison.