Proximity to specialty chains such as Starbucks tends to play a significant role in attracting home buyers to a particular area, according to a study conducted by an online real estate database firm.
Research by Zillow revealed that U.S. homes situated within 1/4 of a mile of a Starbucks branch grew in value by 96 per cent between 1997 and 2014. This is in sharp contrast with the 65 per cent price increase experienced by homes outside that quarter-mile threshold.
Zillow officials said that specialty chains and grocery stores actually drive real estate price increases, becoming a kind of “self-fulfilling prophecy” and starting a virtuous cycle of growth in the area.
“The stores have become an amenity in their own right — a signal to the homebuying public that the neighborhood they’re located in is desirable, perhaps up-and-coming, and definitely improving,” Zillow Group chief economist Stan Humphries explained in a news release, as quoted by The Home Story
“Even if they open in neighborhoods where home prices have lagged those in the wider city, they start to outperform the city overall once the stores arrive,” Humphries said.
Zillow CEO Spencer Rascoff noted that “the grocery store phenomenon is about more than groceries.”
“It says something about the way people want to live — in the type of neighborhood favored by the generations buying homes now. Today’s homebuyers seek things in neighborhoods that weren’t even in real estate agents’ vocabularies a generation ago: walkability, community, new urbanism — and maybe we should add words like sustainable seafood and organic pears,” Rascoff stated.
Real estate industry professionals agreed with the company’s assessment, adding that the “charm” offered by these shops drive better business in their localities.
“Upscale retail stores tend to be in more affluent communities, and that’s where the resale values are higher,” Remax Boston agent Heather Furfari said.