It might be time to wake up to the smell of coffee.
The next time you stop for a coffee break while out house hunting, think about this: your safest bet for a home purchase could be right around the corner from the Starbucks near Wayne you’re sitting in. That’s because Zillow data supports some pretty conclusive evidence when it comes to the Starbucks Effect on home values within 1/4 mile of a Starbucks.
Granted, the neighborhoods serving homes for sale in Wayne near a Starbucks have likely seen better than average appreciation already, but the proximity should bode well for the future. For more patient, slow-roast savvy home buyers, a new Starbucks going into a neighborhood could be a timely proxy for gentrification to help perk up future prices.
To learn more about all the brew-ha, the curious folks at Zillow dropped in on the location experts at Starbucks for a chat and a cup of tea. Sorry, no tea, but the two companies happen to be neighbors in Seattle. Much like your search for the ideal place to call home, the location algo-geeks credit a combo of both art and science in the alchemy of finding a comfy place to count the beans.
The Frappuccino Effect
Zillow compared home price appreciation over a long time span between homes within a quarter mile of a Starbucks to others in a neighborhood. The typical home increased by 65% to an average price of 168,000. The homes closer to the Starbucks rose by 96%, or nearly doubled to 269,000.
You say, okay, well maybe Starbucks is just really good at picking high lifestyle neighborhoods that already have a popular advantage when it comes to home buyer demand (aren’t we all?). Surely, the Starbucks Effect can’t cause over-stimulated appreciation.
Zillow drilled down into the database and looked at home prices five years after a new Starbucks opened shop. Again, the data not only jived, but showed enough price-juice to consider never switching to decaf. The closer homes had more mojo appreciating 21% while others only slightly farther away gained a tepid 17%.