Here is what grocery stores can do for home values: A Study
A new Attom Data Solutions study looks at the correlation between grocery stores and home values by Veronika Bondarenko from Inman.
For some of us, it is hard to imagine a life where one would have to drive 10 miles just to get some groceries. We don’t really think about the convenience of having a strip mall, grocery store or shopping center because, for many of us, that is all we have ever known.
Unfortunately, for many people, even in our country there are such thing as areas known as “food deserts”, towns and places where there are only quick-stop convenient stores such as gas stations, as opposed to grocery stores with fresh food and produce. These dreadful “food deserts” are not surprisingly.
“On average, a home within close range of a Trader Joe’s, a popular supermarket chain known for its budget-friendly fresh food and healthy frozen items, is worth $608,305. Homes near a Whole Foods, a high-end healthy food supermarket more common to urban areas, is worth $521,142.”
“Homes near ALDI, a discount supermarket known for its super-low grocery prices, have home values more in line with the national average ($222,809), but the presence of the supermarket can indicate the potential for major neighborhood growth.” (Antom Research)
The study pulled from 1,859 U.S. ZIP codes, all of which had one Whole Foods, one ALDI and one Trader Joe’s each. The study found that the return of the investment made on a property correlated to being higher within close range of at least one of the three supermarkets.
“On average, homes near Trader Joe’s had a home seller ROI of 51 percent, compared to 41 percent for homes near a Whole Foods and 34 percent for homes near an ALDI. If you average all ZIP codes with these grocery stores, the ROI comes out to 37 percent.”
When it comes to added equity, homeowners near a Trader Joe’s have an average 37 percent equity in their homes ($247,445), while homes near Whole Foods had 31 percent equity ($187,035) and homes near ALDI have 20 percent equity ($53,650).
Another interesting thing that was found in this study is that homes near ALDI have an average gross flipping ROI of 62%, which means the homes in that neighborhood are likely to grow in value. Homes near Whole Foods had an average gross flipping ROI of 35 percent, while those near Trader Joes was about 31%.
As consumers, we realize we pay a price for convieniece, this is the same idea when it comes to being within close proximity to grocery stores.
I“When looking at growth over a five-year period, the study found that properties near ALDI have grown by 42 percent while those near Trader Joe’s and Whole Foods grew by 33 percent and 31 percent, respectively. (Homes within close range of one of these three stores grew by 38 percent.)”
Bondarenko says, there still needs to be more work done on the study, however, this is something to definitely keep in mind when looking for a home.
Source: Inman
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