Dive Brief:
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Homebuilders can charge more for new homes if they build them near a Trader Joe’s than if Whole Foods is the neighborhood’s grocery store.
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In an analysis of home prices, appreciation and property values in neighborhoods near one or the other of these popular grocers, online real estate database RealtyTrac found that homes near a Trader Joe’s have increased in value by 40% since they were purchased, versus 34% for homes near a Whole Foods.
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That compares with average home appreciation of 34% for all U.S. homes, regardless of the brand of their local grocery stores.
Dive Insight:
Whole Foods is a more expensive grocer than Trader Joe’s, and, in fact, it has announced it will launch a discount grocery store chain to compete with the competitor. Yet the homeowners who live near the upscale food chain pay considerably less in property taxes than those who shop at Trader Joe’s: $5,382 a year versus $8,536 a year, according to the RealtyTrac research. That compares with the national average of $3,239 for property taxes.
Plus, while home prices in Whole Foods neighborhoods are expensive, averaging $561,840, the houses near Trader Joe’s cost more: $592,339.
Trader Joe’s isn’t the only trendy store that can raise the value of home prices in its neighborhoods.
Zillow’s Home Value Index earlier this year showed that prices of homes located within a quarter mile of a Starbucks rose by 96% from 1997 through 2014, compared with an average of 65% everywhere else.
The same goes for Walmart: A University of Chicago study last year found that the value of homes within half a mile of a new Walmart typically spiked 2% to 3%. The average price increase: $7,000.
