Research Finds Homeowners Living Close To Starbucks Have Seen Property Values Skyrocket
By Justin Finch
PHILADELPHIA (CBS) -- A new study finds home buyers looking for a solid investment should look around their nearest Starbucks.
Researchers from the real estate company Zillow have found that homes near Starbucks coffee shops tend to appreciate higher value, and do so at a rate above the national average.
Zillow CEO Spencer Rascoff and Chief Economist Stan Humphries crunched the numbers.
From 1997 to 2004, the study finds homes within a quarter mile to Starbucks outlets had their values jump an average 96 percent, versus the market norm of 65 percent. The findings show home value rates if a home was adjacent to a Starbucks.
Noah Ostroff and Jake Dreyfuss of Keller Williams Realty Center City said the findings are not surprising.
"We've read previous studies before that show a correlation between home prices and their relation towards convenience to luxury amenities."
Ostroff said Starbucks is a familiar consumer brand and is often found among other conveniences house hunters seek. Dreyfuss said the Seattle-based coffee chain has a niche for positioning itself in up-and-coming areas, and for some, provides more than just a cup of coffee.
"I think it brings you back to -- it may sound cheesy -- to simpler time."
At the corner of Ridge Avenue and Martin Street in Roxborough, a Starbucks stands on the corner. Longtime resident Pete Corcoran said he passes the storefront everyday, but has never stepped inside.
"Too expensive for me," he said, "but they run a good business, and young people seem to like it."
By some estimates, including Zillow's app, homes nearest to Starbucks are valued at $250,000 and up. Farther away from the store, and those prices fall into the 200 thousands for very similar homes. Corcoran was not sure if the Starbucks alone deserves all the credit.
"I don't think [Starbucks] is the reason."
Down in Old City, Chris Northington thought Starbucks would make a good investment for a homeowner, and a coffee connoisseur.
"If I had a Starbucks like a block away from my house, or even down the way like a lot of people, I think I'd be here everyday."
Fellow Starbucks fan Maria Donahue would think twice about moving next to her favorite coffee shop.
"There are other things that are more important than, you know, coffee."
Even in premium high-density real estate environments like Center City, researchers report their findings were consistent. Even after adjusting their methodology to urban housing markets, they found the results were equable to less dense real estate environments.