Food for Thought: Do Grocery Stores Increase Home Value?
Should you live closer to your local grocery store? Research suggests homes near grocery stores may appreciate faster. Here’s what you need to know.
Being located near a grocery store might lead to more snacking, but it could also increase your home’s value. And since your home will likely be one of your largest investments, it pays to assess nearby amenities that may impact appreciation. That’s why many people aim to buy homes in highly-rated school districts even if they don’t have children. It’s also why homebuyers might consider looking for a home near a Trader Joe’s, even if they don’t share others’ enthusiasm for their peanut butter pretzels or $2.99 wines.
Data from ATTOM Data Solutions reveal which grocery stores have the greatest impact on home appreciation, average home value, and earned equity for homebuyers. ATTOM is a company that collects multi-source property data to drive innovation across industries. It looked at home appreciation from 2015 to 2020, average home values and equity, and home seller profits in zip codes that had at least one Trader Joe’s, Whole Foods, or ALDI grocery store.
Homes near ALDI are rapidly appreciating
Homes near one of these three grocery stores typically appreciate faster than average in general. The average home appreciation over the five-year period between 2015 and 2020 was about 30% for homes nationwide, according to Zillow. Compare that to an average five-year price appreciation of 35% for homes near Trader Joe’s stores and 33% for homes near Whole Foods stores. ALDI takes the cake for driving the highest five-year appreciation rate on nearby homes at 41%.
Homeowners located near Trader Joe’s earn more
While ALDI might be the winner from a home value appreciation perspective, people who buy homes near Trader Joe’s stores enjoy greater equity earnings. Here’s how it breaks down:
|Grocery Store Nearby||Average Home Value||Average Earned Equity (%)||Average Earned Equity ($)|
|Trader Joe's||$644, 578||37%||$255,066|
People selling homes located near Trader Joe’s stores also realize a much higher return on their investment (ROI). These properties see an ROI of 51%. That’s compared to a 43% return for properties located near Whole Foods stores and a 41% return for properties located near ALDI stores.
Other reasons to buy a home near a grocery store
It’s convenient to live near a grocery store. You can save money on transportation costs if you buy your groceries close to home. Nearby grocery stores are also especially attractive to renters. If you’re buying a condo and think you might rent it one day, close proximity to a grocery store could be a major selling point.
Recent analysis from real estate consulting firm RCLCO revealed that multifamily housing buildings with a Whole Foods or Trader Joe’s store at street level brought in 5.8% more in initial rent than average.
Related: Selling a Tenant-Occupied Property
Other neighborhood amenities that influence home value
You should pay attention to the current amenities available near your prospective new home as well as future plans for the community.
- Public transportation and walkability: Walkability is important to homebuyers, and public transit systems often bring other amenities, such as retail shops, with them.
- Restaurants and coffee shops: Proximity to a local Starbucks can lead to an especially lucrative ROI. Zillow data show that over a 17-year period, homes close to Starbucks coffee shops appreciated 96%, compared 65% for homes located further away.
- Public parks, dog parks, golf courses, and hiking trails: Analysis shows that homes adjacent to parks and open spaces are worth 8% to 20% more than similar properties located further away from green spaces.
- Good schools: The demand for highly-rated schools drives up home values in those districts. Data from the National Bureau of Economic Research shows that aggregate per pupil housing values increase $20 for every $1 of added state spend per pupil.
- Trees: Greenery around homes or on the street can add between 3% and 15% in value to houses throughout the neighborhood.
Related: Most Popular Home Features by State
Everyone’s priorities are different when it comes to choosing a home. But if all else is equal between two homes, you might decide to pick the one near Trader Joe’s. Not just for the store’s impact on home appreciation, but also for its abundance of inexpensive alcohol.