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Homeownership

Trulia observes equity spikes in “Pride neighborhoods”

(HOMEOWNERSHIP) If a home is located in one of these Pride neighborhood, even better news is coming about equity spikes.

pride community

Pride Month investigation

During the last five years, the premium to live in neighborhoods with the largest gay populations has grown substantially.

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In honor of Pride Month, Trulia partnered with OkCupid, the online dating site, so that they could more accurately measure gay, or what are also referred to as Pride neighborhoods.

Wait, how?

Because sexual orientation is not a part of the census, others looking for this kind of data would only have the data that the U.S. Census offered on same-sex couples. The glaring issue with that, however, is that not all gay individuals are in relationships and not everyone declares those relationships (or their orientation) on the census.

Also worth noting is that just because researchers have made measurements from that data does not mean that those researchers measured correctly.

In their infinite wisdom, Trulia and OkCupid came up with the Neighborhood Pride Score using OkCupid data about where gay singles (gay, lesbian and bisexual) are combined with U.S. Census data.

Using this new measure, they found that the premium to live in a neighborhood with a high Neighborhood Pride Score has increased from $209 per square foot in 2012 (a 28.9 percent premium) to $320 per square foot in 2017 — a 36.8 percent premium.

The Trulia-OkCupid Neighborhood Pride Score

To calculate the Neighborhood Pride Score, the researchers added the percent of OkCupid’s users in each ZIP code that are searching for same sex partners (gay singles) to the percent of households that are same-sex couples using 2015 5-year American Community Survey (ACS).

For example, if a ZIP code had 30 percent of its OkCupid users searching for same-sex partners and 15 percent of its ACS households are same-sex couples, that ZIP code was assigned a Neighborhood Price Score of 0.45.

Then they calculated the median value per foot of homes for sale in each ZIP code as of April 1 and compared it to April 1, 2012 to find out how prices have changed over time and relative to their metropolitan area.

From then, to now

In 2012, homes in Pride neighborhoods were valued at $209 per square foot, which was $47 – or 29.9 percent – more expensive than their respective median metropolitan home values.

Since then, home values in Pride neighborhoods have nearly doubled and are now somewhere around $86 – or 36.8 percent – more expensive. Based on that data alone, if you want to live in a Pride heavy community, you’ll have to pay more than in a Pride light community.

Where the demand is changing the most

The national numbers showed interesting trends but they didn’t quite express the variations across metropolitan areas either. In fact, if you took a microscope to each of the metros, you can see where Pride neighborhoods are becoming more and less valuable relative to the median metropolitan home value over time (on a square-foot basis).

On the up

The New York metropolitan area tops the list of where neighborhoods with a high Neighborhood Pride Score are becoming more valuable. Home values in Pride neighborhoods there rose from 106 percent to 162 percent – an increase of 56 percentage points.

Experiencing growth as well was New Orleans by 52 percent and Boston by 27 percent. And if you’re looking for a rising Pride community where you can get a discount Grand Rapids, MI, is where you want to be.

On the way down

However, not all Pride neighborhoods in the nation’s metros have gained value over the past five years.

Pride neighborhood home values in 34 of the largest 100 metros have actually declined relative to their metro median.

Topping the list is Miami, where the Pride neighborhood home value premium has declined by 13 percent over the past 5 years, falling from a premium of 73 percent to 60 percent.

Buffalo and San Francisco have seen the second and third most declines, where Buffalo premiums have fallen by 10 and San Francisco, 6 percent.

Unlike the metros with the largest increase in Pride neighborhood premiums, you can buy at a discount in several among the bottom metros. The Pride neighborhoods in Buffalo, Salt Lake City, Dayton, Ohio, and Charleston, S.C., boast discounts of 17 percent, 1 , 4, and 18 percents, respectively.

The Takeaway

You’ve heard it said that correlation does not equal causation. Can you infer from the data collected that the presence of gay households in a neighborhood cause home values to increase? Maybe.

One thing is for certain though, homeowners in Pride neighborhoods have a lot to celebrate this June, especially the growing equity they’re gaining in their homes.

#PrideNeighbors

Written By

Kiri Isaac is the Web Producer at The American Genius and studied communications at Texas A&M. She is fluent in sarcasm and movie quotes and her love language is tacos.

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