Food for thought: How grocery stores impact home prices
Food deserts are typically associated with low real estate values so it's no surprise grocery stores boost prices of homes in their vicinity.
Proximity to grocery stores is an amenity homebuyers often seek out, greatly increasing values and appreciation for both sellers and investors, according to Attom Data Solutions. However, not all supermarkets have the same effects.
Attom surveyed 1,859 ZIP codes across the country with at least one Aldi, Trader Joe's or Whole Foods — and sometimes two or all three. It then analyzed current average home values, five-year price appreciation to 2019 from 2014, current average home equity, seller profits and flipping rates in those housing markets.
The data showed purchasing near a Trader Joe's is best for homebuyers looking for strong markets with opportunity to sell down the line. Those properties generated returns on investment of 51%, overshadowing Whole Foods' 41% and Aldi's 34%. What's further, homes close to Trader Joe's own an average of 37% equity, compared to Whole Foods' 31% and Aldi's 20%.
The average home values for properties near Trader Joe's stood at $608,305, while those near Whole Foods were $521,142 and Aldi were $222,809.
"Trader Joe's wins out over Whole Foods when it comes to home price appreciation because its stores are disproportionately in states that have seen a stronger housing recovery — most specifically California," Jennifer von Pohlmann, director of content and public relations, said in a statement to NMN.
"Trader Joe's has 39% of its locations in California while Whole Foods has 19% of its locations in California. The strength of the housing recovery in California, particularly coastal California, has helped boost the price appreciation numbers for homes near Trader Joe's. Which in turn provides more equity for these homeowners because their homes are appreciating faster."
Though the results for investors were near opposite. Homes close to an Aldi brought average gross flipping profits of 62%, compared to 35% for Whole Foods and 31% for Trader Joe's. Looking at the most recent five-year window, prices appreciated 42% by an Aldi, versus 33% near Trader Joe's and 31% for Whole Foods from 2014 to 2019.