Living near a marijuana dispensary could mean higher home values, study shows

Aly J. Yale
The Mortgage Reports contributor

“High” hopes

Want a home that improves in value? Then you might want to buy near a legal marijuana dispensary. According to new data, dispensaries can boost home values by $22,000 or more.

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Home values get high

A new analysis from Clever Real Estate links rising home values to the legalization of marijuana. According to the site’s findings, home values have jumped an average of $22,888 in cities where retail marijuana dispensaries are now allowed.

In just the last two years, home values increased $6,337 when compared to cities where marijuana is not legal. A study from the CATO Institute had similar findings, concluding that homes within 0.8 miles of a retail dispensary saw an 8.4 percent uptick in value compared to homes further away.

Denver is just one such example. Since Colorado legalized marijuana in 2014, the city has seen 180 dispensaries hit the market. Over the same period, home values have jumped 67.8 percent.

Clever Real Estate researcher Luke Babich explains, “Denver is a clear-cut example of dispensaries raising residential property values, but dispensaries have helped bring up property values all around Colorado. Cities in Colorado with dispensaries have higher than average property value growth compared to the national average.”

In Sheridan, Colorado, home values are up 90 percent since legalization, while those in nearby Edgewater are up nearly 80 percent.

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A state of improvement

The jumps were seen at the state level, too.

Colorado has experienced a 58 percent uptick in home values since legalizing marijuana, while Washington’s have jumped 57 percent. Since 2014, the two states have seen some of the biggest home price growth in the nation.

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Though most states have now legalized medical marijuana, according to Clever’s findings, these dispensaries don’t have the same impact on property values as recreational marijuana does.

According to Babich, “While there are tax benefits to legalizing marijuana medicinally, there was not a statistically significant increase in cities where only medicinal marijuana is legal.”

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Considering buying a house in one of these high-value markets? Then shop around and see what mortgage rates you qualify for today.

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