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 (. 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 ( 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.
CHECK OUT THE AREA AROUND YOUR NEIGHBORHOOD!
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!