Wondering how legalizing gay marriage affects real estate? Regardless of your stance, the Supreme Court ruled in favor of legalizing same-sex marriage. The effects will be seen over time on our economy and in real estate. The LGBTQ community can now hold title for their home as tenancy by the entirety.
Sherry Chris, CEO of Better Homes and Gardens Real Estate, said in a statement after the ruling…
As with other momentous social landmarks, this progress will trigger key milestones along the path to home ownership.
Sherry goes on to say that the LGBT community is “a powerful market segment that represents an estimated buying power of $840 billion.”
A Historical Ruling
The law could have other potential affects on the economy as well…
This is one of the Supreme Court’s most significant decisions in the past century. It’s up there with Brown v. Board of Education and Roe v. Wade. The law results in huge social implications. It also results in the validation of many people’s equality. The ruling brings many positive economic impacts with it.
Before this decision, gay and lesbian couples jumped through expensive and complicated legal hoops for even the most basic things. Now, they have easier means for accomplishing things like…
- Buying houses
- Borrowing from banks
- Protecting estates
- Filing joint tax returns
- Enforcing parental rights.
This encourages more couples at every level to participate in consumerism in more ways.
Clearer Path To Home Ownership
Gay and lesbian couples no longer must seek legal counsel to own a house together. This increases the likelihood that they buy houses as a couple.
Spousal inheritance is now automatic. This results in more couples contributing towards retirement plans and long term joint investment strategies.
There are even basic economic boosters. For example…
- Consumer spend
- Sales tax associated with weddings
- Adopting children
- Raising families
- And a myriad of other fundamental human behaviors.
An increase in these seemingly commonplace activities will impact the economy over time.
Level Playing Field
The impacts of enhancing people’s rights to operate on an even playing field in society are felt on every level. Social and legal progression accomplished through this decision will encourage the basic feeling of equality for gay and lesbians, and that alone will increase the positive economic and social contributions these individuals bring to us all.
There may still be resistance to issues like gay marriage but the overall value added to people’s lives and to society at the economic level creates a pulse of positive expansion that will help the country flourish over the long run.”
What Is Tenancy By The Entirety?
According to LegalDictionary.com, Tenancy by Entirety is:
a type of concurrent estate in real property held by a Husband and Wife whereby each owns the undivided whole of the property, coupled with the Right of Survivorship, so that upon the death of one, the survivor is entitled to the decedent’s share.
Like joint tenancy, this means both spouses own the property. When one spouse dies, the surviving spouse becomes the property’s sole owner.
Joint tenancy was a common way to handle joint home ownership before last week’s court ruling. Unlike joint tenancy, tenancy by the entirety has full protection of the home from creditors.
Essentially, this means that LGBT couples can now fully own property together. Before, they were forced to make other arrangements. The couples’ ability to own property together and to become legally married has several potential effects on the housing market.
Mortgage and Financial Stability
The ability to qualify for a mortgage together is now available to more people. With the community’s significant buying power, this could have huge effects, especially in Houston where inventory is already low.
Better Homes and Gardens Real Estate and the National Association of Gay and Lesbian Real Estate Professionals conducted a survey recently. It showed that 80% of LGBT respondents felt the ruling gives more financial confidence.
One of the greatest tax benefits of home ownership is the tax deductibility of interest (subject to certain limits) on a home mortgage. Now, same-sex spouses who own a home and have a mortgage together can claim the home mortgage interest tax deduction jointly on their joint tax return.
Larger Pool of Qualified Buyers
More couple with more financial stability means more buyers in the marketplace. Gay couples in particular have significant buying power.
This is good news for sellers.
The low inventory with a larger pool of buyers perpetuates Houston’s current status as a seller’s market, where sellers have the advantage and attain higher prices for their houses. Low inventory already drove prices up in Houston in recent years. Having new buyers without having caught up in inventory only prolongs the “problem”.
Potential Shifts in Cities and Suburbs
With more couples focusing on stability and family life, there could be a noticeable shift from cities to suburbs.
Research shows that its common for gentrification to follow when more gay couples begin settling down in a community. This shift could mean improvements in value in certain Houston neighborhoods.
Economists have long speculated about the effects of “gayborhoods”. They speculate on everything including diversity, gentrification and housing prices. One common theme involves the fact that neighborhoods with a high density of gay residents seem more diverse and open-minded. They also have a wider range of racial, ethnic, and socioeconomic groups. Another common argument: gays often pioneer the revitalization of disadvantaged, crime-filled urban neighborhoods. Their presence can be seen as an early marker of gentrification and a precursor to a jump in housing prices.
Good News Overall
This is all good news for Houston home sellers. Gentrification and more buyers in the market both mean higher prices for homes. This is also good news for lenders and builders. There will be more qualified home buyers with significant buying power entering the market.