How Will Same-Sex Marriage Affect Real Estate Sales?
by Michael Lam | Jul 02, 2015
On Friday June 26, 2015, the long-awaited U.S. Supreme Court ruling on country-wide marriage equality affirmed that same-sex couples have the right to enter into a legally binding marriage in every state. With the potential influx of same-sex home buyers to the real estate market, will anything change?
Prior to the U.S. Supreme Court’s decision, Gallup conducted a survey to determine the number of married and non-married same-sex couples. Researchers concluded that approximately 780,000 adults in the U.S. were married to a partner of the same sex. Additionally, 1.2 million adults identified as being in a committed domestic partnership.
Because gay couples are now able to marry in every state, it stands to reason that the number of home purchases made by same-sex couples will similarly rise. But, how will an increase in same-sex home buyers change the market, if at all?
Real Estate’s Newest Target Market
According to the National Association of Realtors® Home Buyer and Seller Generational Study, millennials (those under age 34) represent 32% of all home buyers. Results revealed that the median age at which millennials purchased a home was 29 with the median income nearing $77,000 per year. In contrast, a study conducted by The Williams Institute at UCLA noted same-sex couples tend to have a higher total income, better education, and less barriers to purchasing a home, such as number of children, than their heterosexual counterparts. The results of this study suggest gay couples purchasing real estate may ultimately have better purchasing power than heterosexual couples.
According to The Williams Institute’s analysis of Census data from the period between 2005 and 2011, approximately 46% of individuals in same-sex relationships have college degrees. When compared with heterosexual couples, this is significantly higher as the number of individuals with college degrees in heterosexual relationships is less than 33%.
Having a college degree typically yields higher income, imparts improved purchasing power, and increases the probability of buyers making more informed real estate investment decisions.
Due in part to higher education levels in this demographic, higher income is seen in households with same-sex couples. When both partners are working, same-sex couples average approximately $94,000 annually. In comparison, heterosexual couples earn about $8,000 less per year (or $86,000) when both partners are actively working. Higher income, whether due to higher education or other factors, is an advantage shared by same-sex couples, particularly where investments are concerned. When annual household income is healthy, married buyers have more resources with which to purchase real estate both for home and investment purposes.
Larger Client Base
Since marriage equality was affirmed by the U.S. Supreme Court, it is likely that more same-sex couples will enter into a legally binding marriage and pursue mutual investments, such as home and business ownership. Though no statistics have yet been released to support this notion, this outcome is probable as legal barriers to same-sex marriage have been removed. Furthermore, The Williams Institute study found that women in same-sex relationships earned $8,000 more annually when compared to women in heterosexual relationships. While this disparity may be due to a lack of children in same-sex households and therefore more freedom to work outside of the home, it results in a larger female client base seeking real estate investments.
Advice for Real Estate Agents
As the number of same-sex marriages begins to increase in the United States, it’s important for real estate agents to understand the needs and wants of this demographic throughout the purchase process. In addition to wise real estate investments, gay couples are looking at real estate purchases as only one piece of the estate planning puzzle. Real estate agents working with gay couples are now able to apply traditional estate planning tools to help same-sex couples map out their future with full protection from the legal system, and must consider the same factors, like future children, plans to purchase additional real estate, and desired retirement age, to determine the best real estate options available.
Don’t forget to subscribe to our newsletter. It’s the best and fastest way to get the latest news on real estate. We love getting feedback and reading comments, so please don’t forget to leave a reply below.
Get more stuff like this
in your inbox
Subscribe to our mailing list and get interesting stuff and updates to your email inbox.
Thank you for subscribing.
Something went wrong.