Starbucks: Inspiring and Nurturing the Human Spirit… by Caffeinating Home Values
Coffee isn’t only good for waking you up in the morning. It can also provide a jolt to nearby home values.
In their New York Times bestseller, “Zillow Talk: Rewriting the Rules of Real Estate“, Zillow CEO Spencer Rascoff and Chief Economist Stan Humphries analyzed whether homes located within a quarter mile of a Starbucks have appreciated more quickly than homes overall. They found that homes nationwide located near the coffee behemoth did, in fact, tend to appreciate more quickly.
Now, we’ve added a shot to the data and localized it for 20 of the country’s largest metro areas, tracking the median value of homes near a Starbucks versus the median value of all homes in that metro from 1997 to 2013.
Across these metros, homes near a Starbucks generally appreciated more than all homes. But this marginally higher appreciation is often dwarfed by the sheer magnitude of total appreciation in these large metro areas.
In Seattle for example, where it feels like there’s a Starbucks on every corner (because there is; trust us), the median home near a Starbucks appreciated 16 percentage points more than the median value of all homes. However, this effect is diminished in the time series, given that overall appreciation is so high (105 percent for all homes, 121 percent for homes near a Starbucks).
While most of the 20 metros follow this pattern of overall appreciation dwarfing the Starbucks premium, several metros have experienced noticeably faster appreciation for homes near a Starbucks. Boston, for example – the birthplace of Dunkin’ Donuts – might run on Dunkin’, but home values are brewed up by the ‘Bux. The median value of homes near a Starbucks appreciated 171 percent between 1997 and 2013, whereas the median value of all homes in Boston appreciated 126 percent.
Chicago homes experienced a similar pattern to Boston. The median value of homes near Starbucks rose 59 percent, whereas all homes appreciated 31 percent. Philadelphia is another metro where the appreciation of homes near a Starbucks has consistently outpaced the growth of all homes in the metro: 113 percent for all homes located near a Starbucks, versus 82 percent for all homes.
Now, if you’ll excuse us, we’re meeting our real estate agent at the Starbucks down the street.