The Starbucks Effect On Home Prices Will Shock You!

I recently read the book  Zillow Talk: The New Rules of Real Estate written by Spencer Rascoff the COE of Zillow and Stan Humphries the Chief Economist of Zillow and chapter 4 in the book talked about the impact of Starbucks on home values.

I was amazed at the impact Starbucks has had on home values!

Below was taken straight from page 50 in the book.

Starbucks has a huge impact on coffee but has also had a  big impact on home values. Having a home near Starbucks equals higher home prices in the area.

Properties near Starbucks locations tend to start out more expensive. But as you can see from the image below, these properties appreciate at a faster rate then US housing on the whole. Interestingly, they’re also recovering more quickly from the housing bust.

What does that look like in practice? Let’s look at the historical home value appreciation of areas that now are located within a quarter mile of a Starbucks. A home that is now near a Starbucks would have sold, on average, for $137,000. A home that is not near a Starbucks wold have sold, on average, for $102,000.

Fast-forward seventeen years to 2014. The average American home has now appreciated 65%, to $168,000. Buy the Starbucks adjacent property has for outpaced that, appreciating 96 percent to $269,000.

So when looking to buy a home consider The Starbucks Effect, see if you notice a difference in home prices for those homes that are close to a Starbucks.

GROCERY STORE BATTLE

Not only how can a Strubucks affect your home’s value but how about a Trader Joe’s or Whole Foods. Check out this article on Grocery Store Battles.

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