Good news if you already live near one. Bad news if you’re looking to move close to one.
Move over good schools and curb appeal—there’s a new factor that can boost your home’s value. Just wait for a Trader Joe’s or Whole Foods to pop up in your neighborhood. A recent report from Zillow, the online real estate database, suggests that a house’s property value can grow quickly if it’s located near one of these grocery stores.
In the new analysis, which is included in the paperback edition of Zillow Talk: Rewriting the Rules of Real Estate, the company looked at the values of single-family homes, condos, and co-ops that were located less than a mile of 375 Whole Foods and 451 Trader Joe’s stores in the U.S. They also analyzed the property values for three years before and three years after 80 stores opened. Overall, the data shows that between 1997 and 2014, homes near the stores were worth more than the median U.S. home—and at the end of 2014, these homes were worth more than twice the median home.
For Whole Foods stores, Zillow found that the median home’s value within a mile of a future Whole Foods grew slower than other homes in the same city. But after the store opened, the growth reversed, with the Whole Foods-adjacent homes appreciating at a faster rate. With Trader Joe’s locations, they found that the home near future stores were growing at the same rate, but two years after one opened, the nearby median home’s value grew 10 percent more.
“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.”
And don’t count Starbucks out, either. Zillow found that proximity to a Starbucks had a similar effect to a home’s value as well. While homes in general appreciated 65 percent, Starbucks-adjacent homes grew in value by 96 percent.