Want to boost the value of your home? Consider living by a store
A 2019 study by ATTOM Data Solutions found that residences situated near a Trader Joe’s, Whole Foods, or Aldi store increased in value. In fact, they realized an average home seller return on investment of, respectively, 51 percent, 41 percent and 34 percent. Across the country, the average home seller ROI for all ZIP codes containing these grocery outlets is 37 percent.
What’s more, average five-year home price appreciation on these homes is 42 percent, 33 percent and 31 percent for properties near an Aldi, Trader Joe’s, and Whole Foods, respectively.
But the perks of proximity to one of these chains isn’t limited to homeowners; flippers and investors are reaping the benefits, too. Properties close to an Aldi yield an average gross flipping ROI of 62 percent versus 35 percent and 31 percent for homes near Whole Foods and
Trader Joe’s, respectively. Nationwide, the average gross flipping ROI for all ZIP codes boasting these grocery stores is 52 percent.
What’s behind this food store-related surge in value? More than the allure of quality groceries, the pros concur.
“People are willing to pay for value, and this mindset also applies to real estate — people are willing to pay for the convenience of having name brand products next door,” says David Taylor, real estate agent with Edina Realty in Holmen, Wisconsin.
Taylor notes that high-profile chains such as Trader Joe’s and Whole Foods contribute to the appeal of the neighborhood.
“Positive community impact is a major factor. These companies have focused contributions into local areas, and have a lasting effect on home values,” he adds.
Julie Upton, Realtor with New York Citybased Compass, says grocery chains do a lot of research on the changing demographics of neighborhoods before plunking down a store. That means if a preferred store has chosen to open near you, it’s a good sign that the area has been carefully vetted as a desirable one.
“In real estate, I have always looked for signs that a neighborhood is on the upswing if a Whole Foods was less than a mile or two away,” says Upton. “When I lived on the Upper West Side of Manhattan bordering Harlem, we knew our neighborhood had become a hot place to live when Whole Foods opened a few blocks away from it. Sure enough, the prices in the community shot up, and we sold a year later with some nice gains.”
Homebuyers and sellers alike need to be aware of these factors. “If you hear that a popular supermarket or a Starbucks or a branch of a major bank chain is planning on opening in your area, it’s a sign that the neighborhood is becoming more popular and home prices will likely be rising,” Upton adds.
But Alessandro Mannino, communications manager with the website NeighborWho, cautions that your mileage may vary.
“While Trader Joe’s, Whole Foods and Aldi have been found to add appreciation to a home, this isn’t necessarily true of all grocery stores. Homes are not inherently worth more simply because any given grocery store is nearby,” explains Mannino. “Keep in mind that places with higher property values and upper-class demographics will be more likely to have corresponding grocery stores, while lowerincome areas are more likely to have more value-based chains. And smaller mom-and-pop grocers will not usually have a big impact on home value at all.”
Additionally, think carefully before deciding to buy a home too close to a grocery store.
“The pros are being able to eat fresh foods on a regular basis and the convenience of a short commute for food shopping,” Mannino notes. “But the cons can include high noise and more vehicle and food traffic near your home.”