Your local grocery market may have a lot to do with what happens in your local housing market. If you are choosing between two comparable houses and want the most potential for appreciation, pick the one closer to a Whole Foods or Trader Joe’s. According to a recent study by Zillow, homes within a mile of either grocery store appreciate more rapidly than homes that are not.
Zillow analyzed the value of millions of homes near hundreds of Trader Joe's and Whole Foods to conclude that grocery stores and home values are definitely related. According to their study, a home within a mile of a future Whole Foods store appreciates more slowly than other homes in the same city before the store opens. In the months before the stores open, the trend reverses and flips, so that after the stores' opening dates, homes near Whole Foods appreciate more quickly than other area homes.
"The grocery store phenomenon is about more than groceries," Zillow Group CEO Spencer Rascoff said in a statement. "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."
"Like Starbucks, the stores have become an amenity in their own right – a signal to the home-buying public that the neighborhood they're located in is desirable, perhaps up-and-coming, and definitely improving," said Zillow Group Chief Economist Stan Humphries. "Like a self-fulfilling prophecy, the stores may actually drive home prices. 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."
And don’t forget about Starbucks, either. Zillow found that proximity to a Starbucks had a similar effect to a home’s value as well.
Credit: Zillow Press Release Jan 25, 2016
