Starbucks and Target - Their Effect on Real Estate Values

Real Estate Agent with Keller Williams Capital Properties DC AB15253

Everyone knows that it's always all about location - LOCATION, LOCATION, LOCATION.  Proximity to transportation, proximity to good schools and proximity to shopping and dining.   It's clear what transportation is: the metro, buses, and highways.  Good schools are good schools. Those are relatively easy.  It is more complicated to figure out which stores are ones you want to be near.  Are there some businesses which can increase the value of your real estate? 


Not surprisingly, it is generally good to be near a Starbucks. The value of homes within a quarter-mile of a Starbucks rise faster than those that aren't, according to real estate research group Zillow (Z). With tens of thousands of Starbucks locations in the U.S., that's good news for a lot of homeowners.  Between 1997 and 2013, home closer to the coffee shop increased in value by 96%, compared to 65% for all U.S. homes.

The biggest "Starbucks effect" was in Boston, where nearby home values went up 171% in the same time period. That's 45 percentage points more than all homes in the city.

Starbucks is usually a harbinger of good times for a locality. A new Starbucks gives a sense to developers that the neighborhood is on the rise, wrote Zillow CEO Spencer Rascoff and chief economist Stan Humphries in their new book "Zillow Talk."  But dig a little deeper and it's kind of a chicken and egg situation -- it's not like Starbucks (SBUX) can take credit for changing a community. The coffee chain is very good at finding locations that are up-and-coming, the authors said.

Here are a few ways in which Starbucks may influence real estate values:

Neighborhood desirability: The presence of a Starbucks store in a neighborhood can enhance its appeal and desirability. Starbucks is often associated with a certain level of affluence, and its presence can attract more affluent residents and businesses. This increased demand for properties in the area may drive up real estate values.

Foot traffic and commercial activity: Starbucks locations tend to attract a significant amount of foot traffic. When a Starbucks store opens in a commercial district or near residential areas, it can contribute to increased pedestrian activity. This foot traffic can benefit nearby businesses and create a more vibrant local economy, potentially leading to increased property values.

Development catalyst: The opening of a Starbucks store can act as a catalyst for further development and investment in an area. Other businesses may see Starbucks as a signal of a desirable market and choose to open nearby. This can lead to a revitalization of the neighborhood, increased commercial activity, and ultimately higher real estate values.

Brand recognition and perception: Starbucks is a globally recognized brand associated with quality and consistency. Its presence in a neighborhood can signal a certain level of prestige and contribute to an overall positive perception of the area. This positive association may attract homebuyers and investors, thereby positively impacting real estate values.

Market saturation and competition: In some cases, the presence of multiple Starbucks stores in close proximity to each other may dilute the effect on real estate values. When an area becomes saturated with Starbucks locations, the novelty and exclusivity can diminish. Additionally, if the market becomes oversaturated with coffee shops, the competition may prevent individual stores from significantly boosting property values.

It's important to note that while Starbucks can have an influence on real estate values, it is just one of many factors that contribute to property prices. Homes near Dunkin' Donuts (DNKN) also appreciate faster than the nation's housing as a whole, but not as fast as those next to a Starbucks, according to Zillow's analysis.  Local market conditions, supply and demand dynamics, infrastructure development, and other socioeconomic factors also play significant roles in determining real estate values.


It  is better to live near a Starbucks than a Dunkin Donuts, although it isn't bad to be near the iconic donut shop.   Similarly you may want to figure out how close you are to a Target as opposed to a Walmart. RealtyTrac compared home values, price appreciation and property taxes in U.S. ZIP codes with a Walmart or a Target to determine which superstore gives homeowners super returns.

The analysis looked at home values and property taxes for 17.7 million homes and condos in 1,946 ZIP codes with at least one Walmart (and no Target stores) and 6.5 million homes and condos in 706 ZIP codes with at least one Target (and no Walmart stores).

RealtyTrac found that homeowners near a Target have experienced better home-value appreciation since their purchase, but also pay more and have higher property taxes on average. Homeowners near a Target paid an average of $7,001 in property taxes, which is a whopping 123% more than the $3,146 average for homeowners near a Walmart.

Plus, homes near a Target also have a 72% higher value ($307,286) than most homes near a Walmart ($178,249). To help put this in perspective, the report added that the average value of homes was $215,921 across all ZIP codes nationwide, and the average property tax across all ZIP codes nationwide was $4,283.


The area around your neighborhood - the stores and restaurants, the parks, the schools and transportation access, all add to the value of your home.   Take the time to see what is nearby - and what is planned for the foreseeable future - before you turn over that earnest money deposit and sign that contract.  Those amenities or the lack thereof will impact the value of your home.  

Once you have identified your favorite Starbucks or Target, give us a call and lets start looking! 

Comments (25)

Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi Lise... I must be the exception rather than the rule. I avoid Starbucks at all costs... hate their overpriced coffee. As for Target... don't know that I walk through their doors twice a year.

Jun 09, 2023 10:52 AM
Marte Cliff

I'm with you, Nina Hollander, Broker - I think their coffee is terrible. And anyway - I make coffee at home. If I want to take it with me, I have a go-cup. As for Target - I haven't been in one for at least 2 or 3 years.

Jun 11, 2023 09:29 PM
Mark Don McInnes, Sandpoint-Idaho
Sandpoint Realty LLC - Sandpoint, ID
North Idaho Real Estate - 208-255.6227

Hello Lise Howe .  Very interesting post.  obviously very thought out research  conducted for these numbers.  I am surprised about the value of Target based homes over those of Walmart.  Thank you for sharing this information.  mdm

Jun 09, 2023 01:56 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Lise Howe  indeed I have seen the Starbucks effect not just in Los Angeles but we lived in Boston, I agree with you, not that Starbucks brings to neighborhood up it is the other way around they find the improving neighborhoods and then they open shop.... 25 years ago I used to like their coffee.... I believe their quality dropped or I improved on my taste.... talk to mee about Peet;s coffee now:)Endre

Jun 09, 2023 11:31 PM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Personally, I have never been a big fan of either Starbucks or Target.  I am not a coffee drinker and I don't like to shop, haha.  People have given me Starbucks gift cards though, so occasionally I will meet people there for a drink since they have tea for me.

Jun 10, 2023 05:38 AM
Roy Kelley
Retired - Gaithersburg, MD

This is a very interesting post to share.

My wife likes to be within a reasonable distance of our Trader Joe's store.

Jun 10, 2023 06:47 AM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Lise-  very interesting and as they say location, location, location.  I know that when we've looked, that amenities that are nearby, such as a Starbucks are a big plus.   I wouldn't want to have one behind my home though. 

Jun 10, 2023 01:39 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Jun 10, 2023 08:43 PM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Lise. Wonder if "Target ;locations" will mow have an adverse effect on values. We have one close and and three Starbucks even closer. Enjoy your day. 

Jun 11, 2023 06:03 AM
Marte Cliff

I wonder that too, Wayne Martin.

Jun 11, 2023 09:30 PM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

Lise Howe this is a great post and supports what I've always said to clients that ask:

"Is this a good neighborhood?"

My response, is "Look at the stores that anchor the neighborhood-the ones you'd be shopping in, look at the type of cars parked on the streets and in driveways and parking lots.
Keep and eye out for:

More Ralphs & Whole Foods, less unknown markets
More Starbucks, less check cashing
More Target, less Walmart
More In & Out Burger, less Popeyes.
Businesses tell the story of each neighborhood and so do the vehicles parked in them and I never need to mention people or demographics."

Jun 11, 2023 07:31 AM
Don Baker
Lane Realty - Eatonton, GA
Lake Sinclair Specialist

There's no starbucks or target in the county I live in and frankly I'd like to keep it this way.  long live rural America.

Jun 11, 2023 01:40 PM
Marte Cliff

The same goes here, Don Baker. Thank goodness!

Jun 11, 2023 09:32 PM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ

Well I'll agree that location and living near Starbucks can up the value but not so much in my area.  We're flooded with them (5 or 6) within miles and values didn't go up because of SB but rather due to the area itself has always been popular. Not so sure this trend will continue with some corporations out and out deep dive into social/political issues.  The target store near us has a pretty much empty parking lot lately.

Jun 11, 2023 03:47 PM
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Hello Lise Howe thank you for sharing very valuable report with us. Have a wonderful great week!

Jun 11, 2023 08:24 PM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

I too am wondering about the value of being near a Target these days. They've managed to stick their foot in it deep enough to alienate both liberals and conservatives.

Personally, I wish businesses would stick to selling what they sell - not playing politics. Virtue signalling is just plain dumb.

Jun 11, 2023 09:35 PM
Charles Ross - (785)-819-6944
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Excellent information.Thank you for sharing. Have a wonderful day and a blessed week.

Jun 12, 2023 02:43 AM
Norma J. Elkins
Elite Realty Group - Morristown, TN
Realtor - Elkins Home Selling Team

I could see both of these things to ring true, however here in East TN we don't even have a Target and with the reputation thing going on most people are boycotting it regardless around here.  I am not agreeing or disagreeing  with that fact just stating it.  Great and interesting blog, thanks for sharing!

Jun 12, 2023 06:27 AM
Buzz Mackintosh
Mackintosh REALTORS - Frederick, MD
“Experience, reliable, leadership”

Interesting data, but I'm sure with a slick data person the ratios could be skewed in favor for DD or Krispy Kreme. Target and Bud Lights values and reputation has been severely damaged of late.

Jun 14, 2023 12:41 PM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

Great post!  Thanks for sharing and enjoy your day!

Jun 15, 2023 06:29 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

The things people study.  Who knew Starbucks or Target could have an effect on property values.

Jun 15, 2023 10:37 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

Chris Ann Cleland - you are absolutely right - who knew?  The Starbucks effect has been pretty widely publicized but the Target less so.  

Jun 15, 2023 11:33 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Interesting read and data, Lise. I have to wonder if there are other factors in the area where the Starbucks are located that are having the impact on value.


Jun 15, 2023 03:17 PM