PDF Marijuana and Real Estate: A Budding Issue

Marijuana and Real Estate: A Budding Issue

November 2018

National Association of REALTORS? Research Group

Residential Real Estate

Residential Real Estate Trends

and growing in home or common areas.

NAR surveyed its membership regarding their interaction with marijuana and the real estate sector in states where

Six percent report that homeowner associations did allow growing or smoking in home or common areas.

marijuana is legal. This report is a

Selling a Grow House

summary of the findings. One percent of Approximately three-quarters of members

members were marijuana specialists in

in states where marijuana is legal had

residential real estate. As marijuana

never tried selling a grow house. One in

intersects with real estate, the demand for twenty of these residential members had

both residential and commercial

sold a grow house in the past. Among

properties is a growing market. Currently, residential members who have sold a grow

only one to two percent of residential

house, 27 percent in states where medical

respondents where marijuana is legal for marijuana is legal had a difficult time selling

medical or for medical and recreational a grow house. Thirty-three percent of

use were aware of their MLS containing a members in states where both medical

specific marijuana field.

and recreational marijuana is legal had

The highest share of respondents

difficulty selling a grow house.

reported they currently have residential Among members who had sold a grow

inventory available in their market. Between 11 and 15 percent of respondents in states where marijuana is

house, seven in 10 did disclose the house was used as a grow house. Among those who sold a grow house in the past, nine in

legal to some extent believe inventory was 10 had no title issues selling the grow

tight for multiple reasons, including all-cash house.

purchases from the marijuana industry.

More than three-quarters of members Three percent of members who had sold a

have not seen a change in residential

grow house in states where medical

property values near dispensaries. One- marijuana is legal and one percent where

tenth have seen an increase and 12 to 14 medical and prescription use is legal used a

percent have seen a decrease in residential specialized company for the title. Five

property values near dispensaries.

percent of members who had sold a grow

house in states where medical marijuana is

Approximately two-thirds of respondents legal and one percent where medical and

said that homeowner associations often prescription use is legal were not able to

have rules and restrictions against smoking find a title company for the home sale.

NAR 2018 ? Marijuana and Real Estate: A Budding Issue

Residential Real Estate

Property Management

would take cash for rent, and about one-

About one-third of members had seen fifth of those where marijuana is legal for addendums added to leases which restrict both prescription and recreational use growing or smoking on properties. Forty- would take cash for rent.

three percent of members in states where

medical marijuana is legal and 36 percent

of members in states where both medical

and recreation marijuana is legal had no

issues leasing a property after the growth

or use of marijuana in a property. The

most common issue was the smell, which

nearly one in five members had

encountered. Moisture issues were more

common in areas where only prescription

use is legal.

Some states allow growing on personal property. When a tenant is allowed to grow marijuana in their rental property, it was most common for the tenant to pay the utility costs. When tenants were allowed to grow marijuana in their rental units, nine percent of those in states with legal medical marijuana said self-contained machine/boxes were required.This was also the case among six percent of those in states where both medical and recreational marijuana is legal.

As marijuana is an all-cash business, earnings from those in the business were cash proceeds. About one-quarter of landlords were unwilling to take cash for rent. About one-quarter of those in states where prescription marijuana is legal

NAR 2018 ? Marijuana and Real Estate: A Budding Issue

Residential Real Estate

NAR 2018 ? Marijuana and Real Estate: A Budding Issue

MLS Contains Marijuana Fields

As marijuana in real estate is a growing market, currently only one to two percent of residential respondents were aware of their MLS containing a specific marijuana field.

MLS Contains Marijuana Fields

DOES NOT CONTAIN MLS FIELD

73% 61%

DON'T KNOW

26% 37%

1% DOES CONTAIN MLS FIELD

2%

0%

20%

40%

60%

80%

Only Prescription is Legal

Both Recreational & Prescription Are Legal

NAR 2018 ? Marijuana and Real Estate: A Budding Issue

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