Colorado residents probably didn't see this coming: Once marijuana was legalized, the Denver housing market changed dramatically. Housing prices shot up, inventory tanked, and bidding wars became the norm.

There's been a huge bump in real estate prices since marijuana was legalized in Colorado, James Paine, managing partner of West Realty Advisors told CNN Money. He said it's massively pushed up the prices of raw land and industry.

In March of 2015, Denver's annual home prices increased by 10%, second only to San Francisco, according to S&P/Case-Shiller Home Price Index.

The legalization of marijuana in Colorado has done more than increase home prices. The pot industry has created new jobs beyond growers and dispensaries. The legalization of marijuana has also helped existing businesses, such as HVAC, and security companies who service growers and dispensaries.

Many transplants hide why they are moving to Denver; they don't necessarily come out and say it's because they plan to become a part of the marijuana industry.

While the new law is contributing to job growth and home prices, sometimes it works against sellers. It can be very difficult for a realtor to sell a property if one of the neighbors is growing so much that it concerns buyers.

Denver is Low on Inventory

There has been inventory shortages in the city. In a normal real estate market, Denver usually has around 24,000 listings, but right now, there are only around 4,000 homes, CNN Money reports.

How long will Denver's real estate buzz last? The market could easily run for the next five to seven years providing there aren't any economic disasters.

If more states begin to legalize marijuana, it could take away from Denver's appeal. As other states begin to start recreational laws, Denver's population should begin to slow down.

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