Why are home values higher in gay neighborhoods?
NEW YORK – June 17, 2015 – Home values in predominantly gay neighborhoods tend to sell for more money than comparable homes in predominantly heterosexual neighborhoods.
Why? Experts aren't sure.
A 2001 study rationalized that the faster pace of appreciation in housing sub-markets with the highest concentration of same-sex couples was caused by their proximity to bustling centers of technological progress and innovation, and that open-minded neighborhoods tend to be economically vibrant.
However, a new analysis from Trulia housing economist Ralph McLaughlin says the "gayborhood effect" cannot be explained simply by the fact that same-sex couples tend to be found in cities with dynamic economies. Higher gayborhood prices are still found when comparing these neighborhoods to broader metro areas.
McLaughlin found that from 2012 to 2015, home prices rose 23 percent on average in zip codes with high concentrations of male same-sex couples and 18 percent in ones with high concentrations of female same-sex couples.
McLaughlin also determined that home prices in the gayborhoods of West Hollywood, Calif., and Provincetown, Mass., were 123 percent and 119 percent more expensive, respectively, than their surrounding metro areas.
"As it turns out, home prices in almost all of the gayborhoods that we looked at in this study are more expensive than their metros as a whole," he said, adding that neighborhoods with high concentrations of female same-sex couples are currently appreciating faster than those with high concentrations of male same-sex couples.
McLaughlin thinks female same-sex neighborhoods now may be seeing a higher rate of home value increases because they're 2.4 times more likely than male same-sex couples to have children and may be more likely to look for up-and-coming neighborhoods with good schools.
Source: Fortune (06/11/15) Matthews, Chris
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