According to a new study, homes near a Trader's Joe's increase in value as much as 40 percent.
By comparison, homes near a Whole Foods have seen 34 percent appreciation since they were purchased. According to the study's authors, RealtyTrac, a provider of comprehensive housing data, 34 percent appreciation is average for all zip codes nationwide.
Homes near a Trader Joe's also had a slightly higher value on average: $592,339, five percent more than the $561,840 average value for homes near a Whole Foods. The average value of homes was $262,068 across all zip codes nationwide.
In its analysis, RealtyTrac looked at home values and property taxes for 1.7 million homes, condos and co-ops in 188 zip codes with at least one Whole Foods store (and no Trader Joe's stores) and 2.3 million homes, condos and co-ops in 242 zip codes with at least one Trader Joe's store (and no Whole Foods stores). The average of current home values were compared to the average of home values at the time the home was last purchased.
Photos: Wikipedia; RetailWirePhotos: Wikipedia; RetailWire
The study appears to underscore the appeal of Trader Joe's, with several communities orchestrating campaigns over the years to bring a store to their town. It also demonstrates the leverage many coveted retailers such as Trader Joe's have in securing favorable real estate deals, whether by gaining prized locations or tax breaks and other economic incentives. Premium locations are said to have a "magnet-like tendency" to draw other premium stores.
RealtyTrac spokesperson Ginny Walker said homes near Trader Joe's and Whole Foods should both see appreciation because both study income levels, demographics and other data to identify up-and-coming markets before they enter. Ms. Walker told the Reno Gazette-Journal, "These two chains are disciplined in their decisions even if it means moving slower into markets than some of the lower end chains."
Writing for the Christian Science Monitor, Schuyler Velasco believes the higher appreciation by Trader Joe's reflects that their stores are more heavily concentrated on the coasts while Whole Foods has more in the middle of the country.
Steve Kirn, executive director of the Miller Retail Center at the University of Florida, believes Trader Joe's, with a smaller footprint, is able to reach more "hot” urban areas that are attracting young people and set to see appreciation. Prof. Kirn told the Tampa Bay Times, "People are not willing to go into the distant suburbs and, generally, Whole Foods builds more in suburban areas than in downtown kinds of areas."
A study earlier this year from real estate research group Zillow similarly found that homes within a quarter mile of a Starbucks store appreciated much faster than those further away.
- Better to own near Trader Joe's or Whole Foods? - RealtyTrac
- Markets Where Starbucks Boosts Home Values the Most - Zillow
- Study: Property values increase in areas where Trader Joe's locates - Tampa Bay Times
- Trader Joe's: Good for cheap groceries, great for home values - Christian Science Monitor
- Living near a Trader Joe's is more beneficial than you think - New York Post
- Is Trader Joe's or Whole Foods better for home values? - Reno Gazette-Journal
- The 'Starbucks effect': Higher home prices - CNN Money