17 November 2018

Bitcoin Mining Reshapes Real Estate In Washington Town

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Eager to escape the traffic and congestion of the Seattle area, Nia Collins has her eye on a model home in a new gated community in Wenatchee, Wash., about 150 miles to the east. She expects the home will go on the market for around $700,000. But she doesn’t know exactly—because nobody has returned her calls.

“There’s so much going on they can’t keep up,” says Ms. Collins, a 58-year-old interior designer.

Houses are not so easy to find in Wenatchee these days. The real-estate market in this town of 33,000 residents has been roiled by an infusion of bitcoin miners looking for cheap electricity to run and cool computers that generate new units of cryptocurrencies. Located on the Columbia River, Wenatchee is powered by hydroelectric dams and has some of the lowest rates in the country.

Real-estate agents have been getting calls for months from prospective home buyers and renters looking for properties with a detached garage or shed—places where a bitcoin miner could store servers, says Jamie Wallace, president of the North Central Washington Association of Realtors. Separately, Wenatchee properties are being advertised to bitcoin miners in online classifieds and on social media, according to Chelan County Public Utility District, which serves the county that includes Wenatchee.

In February the Wenatchee City Council imposed a one-year ban on cryptocurrency mining in residential and mixed-use zones, citing safety concerns and potential strains on the electrical grid. Last month, the utility district declared a moratorium on applications for cryptocurrency and other data-related activities. The commissioners also directed staff to take all available steps to halt unauthorized crypto operations.

The influx of cryptocurrency mining comes on top of an uptick in buyers looking for a home in Wenatchee and the surrounding area. Exiles from Seattle and California, both retirees and younger couples, have been relocating to the area, which has more affordable homes and extensive outdoor recreation, such as hiking, water sports and skiing in the nearby Cascade Mountain Range. Last year, Forbes magazine named Wenatchee one of the 25 best places to retire, another factor fueling demand, real-estate agents say.

Home prices in Wenatchee grew 11% in February compared with a year earlier, while supply remained tight, with the number of active listings down 19%, according to Wenatchee-based Pacific Appraisal Associates, which also says there are currently seven homes on the market priced at over $1 million.

Home building is also on the rise—there were 26 single-family dwelling permits issued through February, more than double the 12 permits issued in the same period of 2017. But developers say they’re stymied by limited buildable land and a shortage of construction labor. Real-estate agents say a two-bedroom rental house that went for $600 a month a couple of years ago is now getting rates around $1,500 a month.

“We looked and looked,” says Jim Wonn, a retired tech executive who moved to Wenatchee after buying a lot and building a house last year for $450,000, moving in in November. Mr. Wonn says he’s heard about the fires caused by bitcoin-mining computers overloading electric-service wiring, but all the people he knows who have moved to Wenatchee in the past few years are retirees or second-home owners who plan to eventually retire there.

Chris Holt, 50, just finished building a new 2,700-square-foot house for $290,000, which he considers a good deal: He now rents the 1,000-square-foot house where he was living before for $1,400 a month. Mr. Holt, an automobile dealer, says he made the decision to build and rent in part because building costs haven’t gone up as fast as rents. Changes in Wenatchee are happening at “an alarming rate” he says—especially an increase in traffic.

Still, Ms. Collins, the interior designer, says traffic conditions are still better in Wenatchee than in Seattle. When she started her house hunt, she set a $300,000 price point. But when she couldn’t find much, she doubled it. Even that may not be enough. A couple weekends ago she looked at a 10,000-square-foot house in Wenatchee, advertised as a castle, with a saltwater swimming pool and an acre of landscaped property listed for $1.7985 million, but decided it was too big and old. So the hunt continues.

“I’m just looking for peace,” she says.

Click here for the original article from The Wall Street Journal.
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