Thursday, July 16, 2009

The Bohemian–Gay Real Estate Indicator

A good place to buy real estate is an area where gays and bohemians are moving in, according to Richard Florida of McKinsey & Company who writes:

In 2007 Charlotta Mellander and I examined how various regional factors shape housing prices. We found that two factors combine to shape them. The first is pretty obvious: income. The wealthier the residents, the pricier the housing. The second and much larger factor is reflected by our Bohemian–Gay Index, which combines the concentration of artists, musicians, and designers with the concentration of gays and lesbians in a region. Regardless of which variables we applied, what version of the model we used, or which regions we looked at, the concentration of bohemians and gays consistently had a staggering impact on housing values.

We found that the presence of these populations had direct effects on housing values as well as other locational variables (like income and human capital), making these places more attractive to other populations and demographics. In other words, the presence of these groups not only made housing values rise, it made incomes rise as well.

Read the full article here.

1 comment:

  1. Maybe in his speech to the NAACP Obama should have petitioned "black America" to be more tolerant and accepting of its resident gay population.

    According to this research, all these ghettos would be gentrified overnight, and the perpetually low income and high unemployment problems would disappear overnight!