U.S. cities where recreational cannabis is legal see significant rise in home values

Emma Spears - thegrowthop.com Posted 5 years ago
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American cities, where recreational cannabis has been legalized, are enjoying an unexpected benefit: Homeowners have seen their property values increase by over USD$6000 more than in regions where the drug remains verboten.

 

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According to a new study from Clever Real Estate, which analyzed home valuations using data from real estate site Zillow, residences in cities with access to legal, adult use cannabis saw an uptick of USD$6,337 per home from 2017 to 2019. Homes in areas with easy access to legal cannabis retail shops saw an even bigger upsurge in value, averaging out to an additional USD$22,888 more per domicile from 2014 to this year.

“States that legalize recreational cannabis see an immediate bump in home values following legalization, even without retail dispensaries opening up,” reads the study.

The first two states to legalize recreational cannabis, Colorado and Washington, enjoyed the biggest increases of all since changing legislation to allow adult use cannabis sales and consumption in 2012. Denver, in particular, has seen a significant boost.

“Since Denver retail dispensaries opened their doors on January 1, 2014, residential property values have increased 67.8%, the most significant growth in over two decades,” the study notes.

1a GettyImages 1129469194 e1554993099756 U.S. cities where recreational cannabis is legal see significant rise in home values

Homes in areas with easy access to legal cannabis retail shops saw an even bigger upsurge in value, averaging out to an additional USD$22,888 more per domicile from 2014 to this year.

Recreational cannabis is currently legal in Alaska, California, Colorado, District of Columbia, Guam, Maine, Massachusetts, Michigan, Nevada, Vermont, and Washington–with over a dozen additional states having recently decriminalized the drug, and even more allowing its use for medical purposes.

Regions that only allow the use of medical cannabis, however, are not seeing the same increases.

“For cities where only medicinal marijuana is legal, home values increased at a comparable rate to cities where marijuana is illegal; a statistically significant increase in home values could not be attributed to medicinal marijuana legalization,” reads the study.

However, “data suggests real estate investors can find blazing housing markets in cities where recreational cannabis is legalized.” Despite its popularity Stateside, cannabis remains illegal under federal law and is classified by the DEA as a Schedule I narcotic.

 

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