Real Estate News And Analytics Study: Property Values Increase in Cities That Legalize Marijuana by Sylvia Shalhout April 18, 2019April 18, 2019 Sylvia Shalhout April 18, 2019April 18, 2019 The debate over whether the legalization of recreational marijuana can have negative or positive effects on communities is a heated one and now real estate experts, too, are joining in on the conversation. So a recent study was carried out to determine how legalized marijuana affects property values. The Study Taking a look at housing data from Zillow, three types of locations were compared to find property value trends: Cities where recreational marijuana is legal Cities where medicinal marijuana is legal Cities where marijuana is illegal The Results The study found that cities where retail dispensaries are legal witnessed an increase in property values greater than cities where cannabis is illegal. There was a difference in appreciation of $22,888 between 2014 and 2019. States that legalize recreational use were to found to experience an almost immediate increase of $6,337 in property values more than places where it’s illegal (from 2017 to 2019). This was even before dispensaries were opened up and operating in these locations. When looking at property value changes in cities where only medicinal marijuana is legal, the study found that the changes were similar to cities where it’s illegal. Essentially, only recreational marijuana legalization seems to have a significant impact on property values. In Denver, CO, for example, residential property values saw a massive increase of 67.8% since 2014 when the first dispensaries were opened. In the state of Washington, one of the first states to legalize cannabis, property values increased 57% in the 5 years since legal commercial sales began. Why do property values get such a boost? Another study from the University of Mississippi found that the legalization of marijuana attracts more property buyers ranging from users to entrepreneurs in the industry thereby driving demand for real estate. The study, in a way, disproves the common fear among homeowners and real estate investors about the legalization of marijuana- with it comes increased crime rates which inevitably leads to lower property values. Even though crime rates did increase in some cities across the states of Washington and Colorado, it was more in line with national crime rate trends, according to the study. Why This Study Matters to Real Estate Investors There are a lot of different factors a real estate investor looks into when choosing a location to buy investment property and appreciation of property values is one. While cash flow should be your main reason for investing in real estate, you should also aim to buy in locations where the appreciation will be significant in the near future. As the study shows, cities where the recreational use of marijuana has been legalized may just make for the best cities to invest in for real estate appreciation. However, keep in mind that more studies will have to be conducted on the relationship between crime rates and marijuana legalization as you should always aim to invest in cities with low crime rates. Looking for an investment property in a city where marijuana is legal? Start your search here. Sign Up to Mashvisor to stay up to date on the US housing market. Start Your Investment Property Search! START FREE TRIAL Denver COProperty ValuationWashington 0 FacebookTwitterGoogle +PinterestLinkedin Sylvia Shalhout Sylvia was the Content Marketing Manager at Mashvisor. As a real estate writer, she has been covering topics for the beginner and advanced real estate investor, helping them make smarter decisions as well as real estate agents looking to take their business to the next level. Related Posts The Amazon HQ2 Decision: How It Will Impact US Housing Markets New Airbnb Regulations Might Be Coming to the Toledo Real Estate Market Airbnb Hosts Feeling the Effect of the Coronavirus US Housing Inventory Could See a Boost New Data on Existing Home Sales Shows a Rise Second Home Demand Rises 77% Above Pre-pandemic Levels Report: Property Prices Are Still Rising in These 10 US Cities The Impact of the Government Shutdown on the US Housing Market US Median Home Prices Reach New High in Q3 2019 Forecast: A W-Shaped US Housing Market Recovery Study: Mortgage Rates Differ by State in the US Housing Market Data Shows the US Housing Market Is Heating Up Leave a Comment Cancel Reply Save my name, email, and website in this browser for the next time I comment.