Starbucks Can Boost Your Mood — and Your Home's Value
For many of us, proximity to coffee is the key to happiness. But did you know it might also be the secret to boosting your home's value?
In an excerpt from “Zillow Talk: The New Rules of Real Estate,” Spencer Rascoff, the CEO of the real estate website Zillow, and Stan Humphries, its chief economist, grind a few numbers and brew up a fairly convincing argument that the nearer your home is to a Starbucks, the faster it appreciates. “Moreover,” the real estate mavens contend in the excerpt, posted on Quartz, “Starbucks seems to be fueling — not following — these higher home values.”
According to Rascoff and Humphries, the fact that Starbucks locations tend to be situated in areas where housing stock is already fairly pricey doesn’t account for the accelerated rate of appreciation of homes nearby. An average home now located within a quarter mile of a Starbucks, they note, would have sold, back in 1997, for about $137,000, whereas a home that did not later end up within arm’s reach of a half-caff grande cappuccino would have sold for about $102,000 on average.
And today? As of 2014, the home located woefully far from venti lattes would be worth only $168,000, appreciating only 65 percent, while the house now near a Starbucks location appreciated 96 percent to (hold on to your big white cup with green lettering) $269,000 — almost doppio its original value.
What’s more, homes within a quarter mile of a Starbucks appreciated more within just five years of the coffee-shop location’s opening, climbing just over 21 percent in value, than did homes between a quarter and half a mile away, which rose less than 17 percent. These numbers point to “a healthy difference attributable to the arrival of a Starbucks,” the authors say.
It’s worth noting, as the authors do, that a new Dunkin’ Donuts moving into the neighborhood will boost your home value, too, but not quite as much.
So is the Starbucks home-value effect caused by a craving for coffee or by a regard for Starbucks as a harbinger of gentrification? Rascoff and Humphries don’t say. But it’s clear that, when it comes time to sell your home, having a Starbucks nearby can make a latte difference on how many beans you rake in.