Want your home value to soar? Buy near a Starbucks
Feb 3, 2015, 5:56 AM | Updated: 11:00 am
A study by Seattle-based Zillow finds home values increase far more if a Starbucks is nearby. (AP Photo/File)
(AP Photo/File)
If you’re looking to invest in a new home that will appreciate in value the most, make sure there’s a Starbucks nearby.
That’s the conclusion of new research by Seattle-based real estate site Zillow, which analyzed the impact of Starbucks on surrounding home prices.
The study found that while the value of the average American home appreciated 65 percent over the last 17 years, to $168,000, homes within a quarter mile of a Starbucks appreciated 96 percent, to $269,000, according to the study excerpted from the new book “Zillow Talk: The New Rules of Real Estate” by CEO Spencer Rascoff and chief economist Stan Humphries by the website Quartz.
Some might argue Starbucks only moves into neighborhoods where property values are already higher, or that any coffee shops like Dunkin’ Donuts drive up values.
The study ruled those possibilities out by tracking home values within that very narrow quarter mile ring with homes versus homes a quarter- and a half-mile from a Starbucks. They only compared home values in those rings for the five years after a Starbucks opened, to compare whether it actually drove prices up.
“Lo and behold, the adjacent homes beat out the nearby homes,” the study found. “Those houses closest to Starbucks appreciated a little more than 21 percent over five years, while the houses slightly farther away only appreciated just less than 17 percent. So, yes, some of the difference is related to the location itself, but there’s still a healthy difference attributable to the arrival of a Starbucks.”
The study also found that while Dunkin’ Donuts locations correlated with higher values, home values near Starbucks grew far more, especially after the economic downturn.
The Starbucks effect isn’t just in big cities. The study found it applied across the board.
“Whatever the reasons – because they genuinely like drinking coffee, or because they see Starbucks as a proxy for gentrification – it seems pretty clear that people are paying a premium for homes near Starbucks,” said the report. “And furthermore, it looks like Starbucks itself is driving the increase in home values.”
