BOSTON (November 3, 2018) – Nearly 10 percent of Realtors® reported an increase in property values located near marijuana dispensaries, according to a new report discussing the impact of marijuana legalization on residential and commercial real estate released during a session titled “High Times in Real Estate” at NAR’s 2018 REALTORS® Conference & Expo.
The report, “Marijuana and Real Estate: A Budding Issue,” which surveyed Realtors® in states where marijuana is legal regarding their interaction with marijuana and the real estate sector, was discussed by a panel of real estate research, policy and marketing experts. The report’s results were divided into states which have legalized marijuana for both medical and recreational use, and medical use only.
“Members in states where marijuana has been legalized to some extent have been asking us to conduct this kind of research because it is directly affecting their business,” said Jessica Lautz, NAR director of behavioral and demographic trends. “Whether it is influencing property values, the number of all-cash purchases or demand for various types of commercial properties, it is clear that this billion dollar industry is making an impact.”
According to the report, when it comes to the impact dispensaries have on nearby residential values of properties, more than three-quarters of members in states where marijuana is legal in some form had not seen a change. However, one-tenth of members in these states saw an increase, while 12 to 14 percent reported a decrease in values. One-fifth of commercial practitioners reported an increase in property value from being near a dispensary, and even more reported in an increase (nearly one-quarter) from being near growing land.
Among residential members who had sold a grow house, a majority said that they had no difficulty making the sale (73 percent in prescription only states, 67 percent in both recreation and prescription legal). Nine in 10 of those same respondents said they had no issues surrounding the home’s title when selling the grow house. Seven in 10 also disclosed that the home was used as a grow house at sale.
However, it is clear that some customers still feel uncomfortable having marijuana businesses in their communities. “While less than 10 percent of members indicated there is an increase in actual crime around dispensaries, 16 to 18 percent indicated that there is an increase in the perception of crime,” said Lautz.
The panel also discussed the legal implications facing property owners when it comes to leasing to marijuana-based businesses. As banks cannot be FDIC compliant and take money from marijuana operations, Civil Asset Forfeiture allows the government to seize property and finances that have been involved in certain criminal activities. This means that the federal government could potentially seize a property leased as a dispensary or a grow operation.
“Have they done it? No. Do we think they are going to do it? No. But they could if they wanted to,” said Megan Booth, director of federal housing and commercial policy.
The 2018 Marijuana and Real Estate survey was sent through email in September 2018 to a random sample of 75,000 NAR members who practice residential real estate and 62,000 NAR members who practice commercial real estate. The survey received 6,987 responses from residential members and 949 responses from commercial members for an overall response rate of 5.8 percent.
The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.
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