by rtdosen | Aug 8, 2016 | Ryan Dosen Real Estate Articles
By Ryan Dosen We’ve made it. Such is the sentiment that washes over many a mind after learning that a Whole Foods or Trader Joe’s has decided to set up shop in the neighborhood. It is a commonly held belief that a neighborhood has “arrived” once it has been graced by the presence of one or both of these high-end natural food retailers. The same has been said for the arrival of a Starbucks. The thinking is that the coming of these vendors is an endorsement of a neighborhood’s status as legitimate, desirable, up-and-coming or sufficiently bourgeois. An extension of this line of thought is that there will be increased demand to live in the neighborhood, resulting in higher-than-average home price increases. The Whole Foods Effect Several studies have been done to determine whether the so-called “Whole Foods Effect” or “Starbucks Effect” is real, and whether proximity does actually result in better appreciation for your most important asset. Perhaps the most recent, revealed in a new book titled Zillow Talk: Rewriting The Rules of Real Estate, shines some light on this phenomenon. According to Zillow, one to two years after a Whole Foods opens, the median home near the Whole Foods appreciates 9 percent more than the median home in the same city; one to two years after a Trader Joe’s opens, the median home near the Trader Joe’s appreciates 10 percent more than the median home in the same city. Zillow also tells us that the average home appreciated 71 percent between 1997 and 2014, while homes near a Whole Foods or Trader Joe’s appreciated 140 percent...
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