Why are house prices so high? Well, weed is a reason if you live in a legal state

Why are house prices so high? Well, weed is a reason if you live in a legal state

If you’ve been looking for a new home lately, you’ve probably noticed that property prices have gone up. This is especially true in weed-friendly states. But since 91% of American adults support the legalization of cannabis, it will only spread across the country and it will undoubtedly have an impact on house prices.

A new report from Clever Real Estate shows that from April 2017 through April 2021, home prices rose $ 17,113 in states that legalized recreational cannabis, compared to states that have restricted or always medicinal use is still illegal. Legalizing cannabis means not only higher property prices, but millions of dollars more to be poured into tax revenue.

The report also notes that states that legalize recreational cannabis and allow more pharmacies to be set up result in higher property value and more tax revenues than states that do not allow cannabis dispensaries to operate or use cannabis for medicinal purposes Have prevented purposes.

The results of the report are also interesting. They found that every time a city adds a new pharmacy, whether it’s recreational or medical, the value of real estate increases by $ 519. And from 2017 to 2019, house prices in legal states rose $ 6,338 higher than non-legal states. It was also the states that legalized recreational cannabis that saw the largest increases in their property values.

There are now 5 states that have already given the go-ahead for recreational marijuana, even though they haven’t started sales yet. In these states, home values ​​are projected to rise an average of $ 61,343 once sales have begun. But states where recreational cannabis is legal has seen the largest increase in home values ​​in California: $ 128,341 since 2017.

What does it all mean?

In addition, cities with more pharmacies saw a positive correlation with rising residential values, suggesting that legalizing cannabis is really excellent at stimulating economic growth and jobs.

Increased property values ​​due to cannabis legalization are a GOOD thing. Because higher tax revenues from cannabis sales also lead to new investments especially in infrastructure and public services, so your cannabis sales taxes will certainly help improve your city. All of this leads to increased demand for real estate, higher real estate values, and more property tax income.

But there are other factors that affect the value of the home. Clever Real Estate explains that this includes the condition, facilities, amenities and services available in the area, and the crime rate. Of course, cannabis legalization can affect all of these, although the effects are always positive: more demand for real estate, tourism, and business and job creation. Just look at Colorado: in 2012, it became the first state to legalize recreational marijuana. Because of this, Colorado is always considered the gold standard when it comes to studying how legalization affects a state, and the effects are always positive.

A study conducted by Penn State found that hotel revenues rose to $ 130 million in the first year after marijuana was legalized in Colorado. They also saw crime rates decline as the state saw job creation from new businesses increase. Legalization also has other positive effects that improve the quality of life of the people living there: these include better access to medicines, fewer alcohol-related problems and fewer incarcerations.

The legalization of leisure activities has the greatest impact on the values ​​of private households

There are several types of cannabis legalization, all of which come with increased home value, explains Clever Real Estate. However, their research has found that legalizing recreational activities has the greatest impact.

Through a controlled study, they found that property values ​​in areas where recreational cannabis has been legalized has increased by $ 17,113 compared to places where it’s legal or still illegal for medical use only. Medical legalization, on the other hand, added $ 1,543 more to the value of homes than in states where cannabis is still illegal.

States that recently legalized cannabis (New York, New Mexico, Montana, Virginia, Vermont) can expect changes in residential values ​​once their laws are fully implemented, especially when it comes to recreational marijuana that has been legalized . They can expect an average increase in home value of over $ 60,000 when they start selling cannabis, although it could have climbed to $ 61,343 if they had legalized recreational cannabis in 2017 – that’s $ 7,302 more than the average increase of home value of $ 54,041.

The presence of pharmacies – both medical and recreational – all have a huge impact on residential values ​​in the states in which they are located.

In states where recreational use is legal, they can add up to $ 22,090 in home sales increases compared to states that already have legal recreational use without pharmacies.

Conclusion

This is important as the economy needs some stimulation, especially as we as a nation are recovering from the financial (not to mention emotional) effects of the pandemic. States are using the taxes levied on cannabis sales wisely: investing in infrastructure, public education, criminal law reform, drug abuse treatment, and much more. In addition, states already have plans to redistribute tax revenues to local governments, which do much to improve the quality of life in communities across the United States.

* Data from Clever Real Estate

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