Recreational marijuana is raising home prices, according to a new study
- Legalization of marijuana in Denver unexpectedly caused real estate prices to rise in the vicinity of cannabis stores.
- However, brokers claim that this phenomenon may not manifest itself in every city.
As recreational marijuana sales increase throughout the Bay Area, could a newly legal drug cause an unexpected rise in the real estate market?
Researchers looking at the impact of legalized recreational marijuana on prices in Denver found a surprising trend: The business that began selling recreational marijuana had "a very positive impact on neighboring property values."
Marijuana = rising real estate prices
After holiday sales became legal, homes near holiday marijuana stores saw an increase of more than 8% compared to homes a little further away. It is a small data-based study, but research - the first of its kind - could provide an important insight into the potential impact of legalization.
"We went into the project and were not sure what to expect," said James Conklin, a professor of real estate at the University of Georgia, who also wrote a paper entitled "Contact High: The External Effects of Marijuana Retailers on Home Prices in the Summer." "It simply came to our notice then. Our analysis of the project showed that no negative effect can be seen - the results show a positive effect.
Conklin and his co-authors found that after afternoon marijuana sales in Denver in early 2014, the following values appeared in families close to these stores: homes within 0.1 miles of the store were 8.4% higher than houses lying 0.1 to 0.25 mil.
They were not new stores - they were pharmacies with medical marijuana, which, when it became legal, had expanded to recreational sales.
Studies
This study is not the first to suggest a link between rising house prices and the legalization of recreational marijuana, but its authors claim that this is the first time this has happened at a highly localized level. A similar report written by two University of Mississippi professors and the FNC's real estate information company showed that legalization leads to an average 6% increase in Colorado housing prices. This paper, entitled "The Impact of Retail Marijuana Legalization on Home Values: Colorado Evidence," compared property gains in communities that received recreational use and those that did not.
Realtor.com has found that since the first recreational cannabis stores in Colorado in the first half of 2014, the price of a state home has risen from $ 248,000 to $ 298,000 in the first half of 2016. This is partly attributed to the state's population in during this period it increased by almost 2%, say researchers, but also claim that more homeowners moved here due to a change in the law.
Conklin and his co-authors did not claim to know why recreational marijuana increases home values, but theorized that this may be because legalization has led to a sharp increase in housing demand due to marijuana-related jobs, lower crime rates, or the clustering of other facilities. near marijuana shops. They also noted that in other cities, marijuana may not have the same impact on property prices.
Rick Smith, president of the Santa Clara County Real Estate Association, said he was impressed by the Colorado study. Marijuana stores should not be too close to schools, he said, adding: "Usually, things that have these types of restrictions do not affect property values."
Oakland real estate agent Kerri Naslund said Monday that she saw an increase in the value of commercial real estate near marijuana growers. However, he does not expect the values of residential houses to follow this trend.
Source: article , image: legalshowtime.com; tokeofthetown.com