Does the LGBT community pay a premium for living in a gay neighborhood? The answer may surprise you.
Quentin Fottrell of MarketWatch.com takes an in-depth look at the housing market for the LGBT community in this article from MarketWatch.com.
At the nadir of the housing market in 2012, homebuyers had to pay an average premium of almost 29%, or $209 per square foot, to live in communities with a higher share of gay, lesbian and bisexual residents. This year, homebuyers will need to pay a premium of nearly 37%, or $320 per square foot, to live in these same neighborhoods, according to a study released Thursday by real-estate website Trulia and online dating site OKCupid IAC, -3.42% The conclusion? “Clearly, America’s gay neighborhoods have recovered at a faster rate than non-gay neighborhoods.”
Typically, researchers had to use U.S. Census data on same-sex couples in order to determine where gay populations concentrate. There is an obvious downside to that methodology, however: Not all LGBT people are in relationships and, as such, researchers may be inaccurately measuring where they live. To address this, Trulia and OKCupid developed the “Neighborhood Pride Score,” using OKCupid data on the location of gay singles combined with U.S. Census data on the location of gay couples. The researchers then cross-referenced this with house prices in those areas.
High costs for a busy city:
The highest premiums were in West Hollywood, the Castro District in San Francisco, Uptown in Dallas, Palm Springs, Hillcrest in San Diego and Edgewater in Chicago. On the one hand, the legalization of same-sex marriage in June 2015 may have led to more married couples buying homes together in those neighborhoods. On the other, since gay individuals and couples tend to have fewer children and higher disposable incomes, they may also seek to live in neighborhoods with more desirable amenities, or they may simply attract such amenities after they move in.
Another theory: “If you are not raising children, you have two male incomes and have more money to devote to improve their home environment,” says Gary Gates, the recently retired distinguished scholar at the Williams Institute for Sexual Orientation Law and Public Policy at the University of California. There are possible limitations to house-price rises within a “gayborhood.” It may need to be “socially liberal” for an increase in same-sex households to increase house prices, a 2011 study by researchers at Konkuk University in Seoul and Tulane University in New Orleans found.