A recent study conducted by one of the world’s largest Real Estate websites, Zillow, has come to the conclusion that homes situated near a Starbucks appreciate in value more quickly.
The study, based on US home prices, compared market statistics for house values between 1997 and 2014. On average, homes which resided within 400m of a Starbucks appreciated by 96% compared to the national average of 65%.
Now, this isn’t exactly a peer reviewed article. However, the control group for the study was Dunkin Donuts, where homes within the same proximity only appreciated by 80%. So, one can conclude that it’s not simply having a coffee shop nearby, but having a specific type.
A skeptic could reasonably conclude that this is correlation and not causation. That in fact, Starbucks, which has been known for choosing great locations, is simply choosing trendy, popular areas where market demand would be stronger and prices would naturally appreciate at a more rapid pace than that of surrounding areas.
However, it still makes for an interesting concept. That by choosing areas where Starbucks has decided, through their substantial resources, that the location is right for a profitable coffee shop, is also a good place for a homeowner to invest.
There are many factors which influence the rate at which an area appreciates, and it would be prudent to expect that Starbucks analyzes many of these same factors when determining prime locations.
For example, we know that areas near good public transportation demand a higher rent. Renters seek areas which allow them to get around easier, much the same as a homeowner would. As such, there is stronger demand for developments around major transportation hubs such as Skytrain stations or the Seabus. This results in a preference by investors to purchase rental properties nearby.
Other obvious factors such as nearby amenities, employment opportunities, and retail space, would contribute to the desirability of a neighborhood just as they would contribute to the pull and traffic to the area for a Starbucks location.
So, it’s an interesting factor when discussing market values and when determining which area might be a good location to call home, but it should be on the end of a long list of many other factors which are more directly related to housing prices.
Born and raised on the North Shore of Vancouver, I am a Real Estate Agent with Keller Williams Elite Realty. Check out more of my blogs and come back daily for new entries.