Does Starbucks Increase Values?

Here is an interesting concept:  Does having a Starbucks nearby increase a property’s value?

Recently I ran a Facebook poll where I asked “What most influences buyers to buy?” and I offered several options like price, town the property is located in, school systems, etc.  The poll also allowed respondents to add their own options if they felt there was some other overwhelming reason why buyers buy and one agent from Chicago weighed in by saying many of today’s buyers make their home buying decision based on whether there’s a Starbucks, movie theatre, and good restaurants nearby.  Interesting.  So, what was going to be a blog post about the importance of pricing (most of the respondents replied that price is the number one thing that influences a buyers decision) has instead turned into a post about The Starbucks Effect – How Real Estate Prices are Influenced By Starbucks.

After receiving the original poll response about Starbucks, I started polling people about The Starbucks Effect.   This was the question I asked on Facebook: “Would you pay $5000 more for a home if it had a Starbucks within a few miles, in comparison to a similar home where the closest Starbucks is 30 miles away?  Now, let me preface the article by saying, I did not receive hundreds of responses on this matter, but I did receive a handful, and 100% of respondents said they would pay $5000 more for a house if Starbucks was close by.  Again, interesting.

What came first, the chicken or the egg?  In other words, if you look at where Starbucks cafes are located throughout the country, they are located in cities and towns that are considered more affluent. In other words, there is no Starbucks in Lawrence, MA where the average household income is under $40,000.  Therefore, it may be possible that the people who said they would pay more for a house near Starbucks would have paid more to get into that community anyway.

None of this is that scientific.  I would say that the two biggest lessons to be learned from this are as follows.  First, there is something to be said for a consumer who is wiling to pay $5 to $7 for a cup of coffee.  To me, it indicates that the consumer one, has discretionary income and two, will pay more for the finer things in life.  Second, it says, as a real estate agent, if you’re taking the time to post your listings on Craigslist, Facebook, and the like….wouldn’t it also behoove you to print out some good, ole-fashion listing sheets and post them on the bulletin board at your local Starbucks.

We are a long way off from seeing a new box added to the residential appraisal report or MLS data sheets saying “Proximity to Starbucks” but as real estate agents it’s important to note that there are hundreds of indicators that influence the buying decisions of consumers. It’s a good idea to ask lots of questions, understand the wants and needs of buyers, and market the heck out of the ones that are most important.  I wouldn’t be surprised to see “Close to Starbucks and movie theater in many of your property descriptions someday.”

Lastly, after reading Seth Godin's blog this morning and thinking of how fast change occurs and slow acceptance occurs in the workforce and labor markets, this Starbucks thing makes me wonder, What is Next?