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Home Values Have Increased Significantly More In States That Legalized Marijuana Than Those That Kept Criminalization, Real Estate Study Finds
Home values have grown at a significantly higher rate in states that have legalized marijuana compared to non-legal states over the past decade—with the average price of a home in a legalization state now 41 percent higher than those that have continues to criminalize cannabis—according to a new report on real estate trends.
The study from Real Estate Witch and Leafly explored average home prices from 2014 to 2023, looking at the potential impact of regulated cannabis access for medical or recreational purposes on real estate value.
The analysis found that, during the time period reviewed, the average price of a home in states that had legalized for adult use appreciated by $185,075 since 2014, versus $136,092 in non-legal states. The average home value in a recreational state reached $417,625, while non-recreational state home prices averaged out at $295,338—a 41 percent difference.
The report also showed that home price growth in medical cannabis states outpaced that of states which have yet to enact the reform. Medical marijuana states saw their home values grow by $166,609 on average compared to prohibition states where home prices increased by $137,320 since 2014.
“It’s not surprising that states across the U.S. have seen significant increases in property values, given that the value of real estate generally increases over time,” the report says. “But the growing gap between home values in legal and illegal states sticks out like a green thumb.”
What’s more, the study seemed to identify an association between home value and access to regulated dispensaries at the local level. Cities with licensed retailers in legal states saw their average home prices increase by $168,292 since 2014. The mean home value in cities without dispensaries, meanwhile, increased by $100,933. That’s a $67,359 difference.
“This report stands as a testament to what insiders in the cannabis community have long known to be true: The presence of legal cannabis in cities and states does not diminish property values. In fact, it’s quite the opposite,” Josh deBerge, vice president of brand and communications for Leafly, said in a press release. “Regulated cannabis offers a slew of economic benefits to local communities, and that is something this report makes quite clear.”
🍃 NEW data in collaboration with @Leafly: The typical home in a state where recreational cannabis is legal is worth $417,625 — 41%, ($122,287) higher than non-recreational states ($295,338).
Read more on how #cannabislegalization impacts #homevalues 👇 https://t.co/onA9Bpg4el pic.twitter.com/vVV8Erc0th
— Clever Real Estate (@ListWithClever) October 31, 2023
The report authors don’t attempt to dissect the reasons why legalization appears linked to increased home value, but multiple factors could be at play. Previous studies have indicated that regulated access could influence some people to move to certain states over others, for example.
Prior analyses, including one published in 2021 that used data from online real estate marketplace Zillow, have similarly shown that marijuana legalization is associated with higher home property values. “Home values increased $6,338 more in states where marijuana is legal in some form, compared to states that haven’t legalized marijuana,” that report concluded.
In 2020, a separate analysis from economists at the University of Oklahoma similarly found that states that legalize marijuana see a boost in housing prices, with the effect most pronounced once nearby retail outlets open for business.
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Photo courtesy of Max Pixel.
