“The Starbucks Effect” and Boston Real Estate

Whether you enjoy coffee from Starbucks or not, living near one of their approximately 21,000 locations can have a big benefit for homeowners. According to research done by Zillow, homes located within a quarter mile of a Starbucks saw a higher increase in value than those that did not. The impact varied depending on the city but the highest effect was in Boston – with homes values up 171%!

Behind Boston, the markets that saw the biggest increase were scattered all around the US. Philly came in 2nd followed by Washington DC. Seattle, home of Starbucks made the top 10 list at #9. See full report.

Why?

Analysts have a range of opinions as to why the Starbucks Effect exists and makes such an impact on pricing. If you dig a bit deeper, you can understand that Starbucks goes into up and coming neighborhoods and spend tons of time analyzing changing markets. This would explain a stronger increase over time compared to other properties.

Starbucks gives a sense of security and familiarity in neighborhoods that may be considered “fringe” to potential buyers. They feel that a luxury brand such as Starbucks would invest in areas that they see a strong potential for an increase in value. This shows why the stores can be beneficial in increasing surrounding home values.

What about Dunkin’?

Homes near Dunkin’ Donuts went up in value at a rate of about 90% over the same 17 year period. This is impressive, but not quite the same rate as Starbucks.



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