For many years, a perplexing phenomenon has made its way into real estate markets across the country: where there is a high concentration of same-sex couples, real estate tends to be more expensive and appreciate in value faster.
The trend was made famous by a 2001 study by Richard Florida and Gary Gates, which found that there was a higher concentration of those identifying as gay in cities that were also vibrant centers of technological progress and innovation. Their theory was that places that were open-minded would also be economically vibrant.
But even as same-sex marriage and gay culture is increasingly accepted across the United States, this trend has continued, according to a new analysis from Ralph McLaughlin, a housing economist at the real estate website Trulia. McLaughlin studied the prices and price appreciation of homes, from 2012 through 2015, in neighborhoods with the highest concentration of married same-sex couples, both among male and female pairs. He found home prices increased on average 23% in zip codes with high concentrations of male same-sex couples and 18% for neighborhoods with high concentration female same-sex couples.
What’s even more interesting, and perplexing, about McLaughlin’s analysis is that the “gayborhood effect” isn’t simply a product of the fact that same-sex couples live in cities that have dynamic economies. That’s because when you compare the neighborhoods with high concentrations of same-sex couples to the broader metro areas where these neighborhoods exist, you still find higher prices in the so-called gayborhoods. Writes McLaughlin:
Furthermore, when looking at home price appreciation rather than absolute value, McLaughlin found that neighborhoods with high concentrations of female same-sex couples are appreciating faster than than neighborhoods with high concentrations of male same-sex couples. Here’s the possible explanation he offers:
Either way, this analysis would seem to contradict Florida and Gates’ original hypothesis that it was the city-wide culture that made places with high concentration of gays more expensive than other cities, because even neighborhood-by-neighborhood, more gay couples mean higher home prices.