November 8th isn't just a day to choose our next President. Voters in California, Massachusetts, Maine, Arizona, and Nevada will also decide whether to legalize recreational marijuana, say Realtor.com writers Yuqing Pan and Clare Trapasso. States that vote yes will join Alaska, Colorado, Oregon, and Washington, which permit the recreational use and sale of marijuana, and Washington, DC, which allows recreational use but not retail sales.
A yes vote to legalize may also have a significant impact on the economy and housing prices--it could create a number of new jobs and increase the country's tax revenue, which in turn would stimulate the housing market. Home prices have already risen in the four states where it’s legal. The Realtor.com data team analyzed residential real estate in the recreational marijuana states and found that certain kinds of cities typically benefit more than others. Here's what they found:
Simply put, more people seem to move to states with legalized marijuana, boosting home prices. “The legalization affects both the demand and the supply in the residential housing market,” says University of Mississippi economics professor Cheng Cheng, one of the authors of a study on how legalizing retail marijuana in Colorado has given a lift to local real estate. Areas where it’s legal are “going to attract more home buyers, including marijuana users as well as entrepreneurs and job seekers.”
But some marijuana businesses are bad for local home values. Within the areas that have legalized marijuana, there’s a bit of a cannabis caste system. Colorado homes within a half-mile of a marijuana business often have lower property value than homes in the same county that are farther out. But not all marijuana business are a buzzkill for home values. Neighborhoods with grow houses are the least desirable, with an 8.4% price discount. But retail shops, especially with the rise of the new generation of stylish pot boutiques, have almost no negative impact.