Could A New Seattle Sports Arena Send Housing Values Soaring?

Well the battle for a new Seattle sports arena has begun.  On one side we have basketball (and hockey) fans arguing that a new arena is good for the community and on the other we have the naysayers who insist that a new sports arena would just cost the city a lot of money.  But could it be that a new sports arena will have a ripple effect on the housing values of the entire city and even the outlying areas?  There are some who insist that a sports arena would have a positive shockwave effect on the economy.

According to a study performed by Xia Feng and Brad Humphreys, not only does a new sports arena impact the economy in terms of creating new jobs during and after construction, it can send the value of surrounding real estate into an upward trajectory.  The study found that a new sports arena could increase the value of real estate located within a one mile radius by millions of dollars.  That benefit would dissipate slightly the farther the real estate is located from the arena; but it would still have an impact. Microsoft CEO Steve Ballmer, who is a huge basketball fan, has argued that Seattle’s lack of a basketball team is at it’s core a real estate problem.

“I think the challenges there are real estate challenges, honestly. I am not talking about where the location has to be, or anything else. But the building that is Key Arena would not be able to have an NBA team in it that would be competitive. The simple economics are: If you don’t have a nice enough building, you can’t sell enough of the right kind of tickets at the right kind of prices. And if you can’t do that, you can’t pay the players the right amount of money to compete. And if you can’t compete, you can’t fill the seats.”

Building the right type of sports arena would attract tourists and could encourage local residents to spend more time and money in the downtown area.  Local businesses and homeowners stand to benefit from sports fans spending in the area.

So if the sports arena is good news for real estate and for the local economy, what’s the delay?  The truth is that Seattle has seen its fair share of “sports arena” fails.  Losing the Super Sonics and getting saddled with the underutilized Key Arena has been a hard pill to swallow.  But if the city decides to approach the new sports arena as a long-term investment which will help protect real estate values in future recessions, they may be more willing to do the work necessary to put Seattle back on the sporting map.

 

Please feel free to leave any comments or questions! 🙂

1 reply
  1. gulshan homz
    gulshan homz says:

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    Reply

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