There Are Some Real Estate Opportunities

by: Larry MacDonald

One way to play the commodity boom is to buy real estate in mining towns. However, real estate prices in many mining towns may have already increased substantially, so the game could be in the late innings. An exception may be places where previously abandoned mines are on the verge of reopening in response to today's higher commodity prices.

This notion came to me recently on a trip to see some retired relatives in Elliot Lake, Ontario. They bought a house there incredibly cheap about ten years ago, just after the uranium mine shut down (the money saved helped pay for the four to six months of the year they spent traveling the world). House values have gone up since they bought but are still quite reasonable (mostly under $100,000), as these listings from the Royal Lepage and ReMax offices in Elliot Lake show.

My relatives said some mining companies have staff now working on restarting mining operations in the Elliot Lake area. If plans go ahead, it should give a boost to the real estate market. True, uranium prices have corrected recently, but believers in the secular bull market for energy will have no trouble seeing past this setback.

It would be interesting to compile a list of towns with closed mines and determine if any are in the process of reopening.