Certain neighborhood characteristics obviously have certain effects on property values, whether positive or negative. It’s a no-brainer that having loud railroad tracks in your backyard will drag your home’s value down, while nearby public transit will have the opposite effect.
But a coffee shop?
That’s right: in addition to good schools, nearby green spaces, and close proximity to employment boosting your property value, so will your local Starbucks. It turns out that being so close to picking up a customized tall, non-fat, sugar-fee, soy milk caramel latte can do wonders for bringing up the value of your home, and others on the block.
Over the last couple of decades, homes located within a quarter of a mile of a Starbucks increased in value on average by 96%. Back in 1997, a home that wasn’t located close by to a Starbucks would have been worth an average of $102,000, compared to an average property value of $137,000 for a home situated nearby the coffee house.
By 2014, the average home not located near a Starbucks appreciated to approximately $168,000 – or 65%. During the same time period, properties close to a Starbucks increased in value to about $269,000 – that’s a 96% increase.
And the closer your home is to a Starbucks, the bigger the payoff: five years after a Starbucks opens in a neighborhood, properties located within a quarter-mile can appreciate by as much as 21%, while homes a half-mile away climb an average of 17% during that same time span.
Considering the steep price tag for a cup of joe at this trendy coffee house, Starbucks is typically a sign of affluence in a specific location. When a new Starbucks pops up in a neighborhood, it alerts developers that a particular area is potentially an up-and-comer.
But is it that Starbucks has an uncanny ability to transform a community from one of drudgery to one of sophistication and wealth? Or is it that the coffee powerhouse is just good at picking out specific locations that are already on the up and up?
Whichever way the ball rolls, there’s no denying the correlation between the presence of a Starbucks and the increase in home values. But such an effect is more prevalent in certain markets over others. Boston, in particular, appears to experience the biggest impact in regards to the proximity to a Starbucks, followed by Philadelphia, Washington, D.C., Chicago, and Baltimore.
Surprisingly, Seattle – the home of Starbucks where shops are bountiful – is number 9 on this list. Maybe the effect of having many Starbucks coffee houses around has worn off for locals, considering the fact that its presence is a lot more common than other centers in the country.
For the sake of comparison, properties close to Dunkin’ Donuts also appreciate faster compared to the country’s real estate market in general, albeit not nearly as fast as those situated nearby to a Starbucks.
Looks like Americans love their coffee, and are willing to pay more for their properties to be close to that caffeine fix.