Are you a Starbucks connoisseur or do you detest the taste of Starbucks products?
Well, either way, if you’re a homeowner you should be happy that these coffee chains can actually improve the value of your house or condo, according to a new report from real estate research group Zillow. This is referred to as the “Starbucks Effect.”
The study noted that home values within a quarter of a mile of a Starbucks location grows faster in value than other homes that are not near a Starbucks location. Cities that saw the biggest effects of Starbucks locations were Boston, Miami-Fort Lauderdale, Washington, Chicago and Baltimore.
It made this discovery when it looked at housing values between the years 1997 and 2013 and it was surprised to see home nearest to a Starbucks climbed in value by 95 percent. This is significantly lower than the average 65 percent increase of homes in general.
Zillow cited a case whereby a Chicago condominium owner noticed a Starbucks was established two blocks from her a little more than a year after she moved in. Three years later, she was able to sell her two-bedroom condo for $100,000, or 53 percent, more than what she initially paid for it.
“Everybody was all excited, because our property values did go up,” she said. “It was a sign that the neighborhood was changing, and people who normally wouldn’t have chanced that neighborhood said, ‘Oh, that’s a Starbucks.’”
Starbucks provides developers with indicators, too. For instance, if property developers notice a Starbucks opening up nearby then this suggests that the neighborhood will soon become trendy and affluent. This is important because it gentrifies the area and welcomes other businesses and developers to the neighborhood.
The report also found that street names are other factors to consider when pegging the value of a real estate property.
With more than 12,000 Starbucks locations across the U.S., no wonder why the housing market is revving up once again.
Posted in: Business Investments