High property value growth can be locked in through proximity to one of the top amenities a neighborhood can have: grocery stores, especially those from three chains in particular.
In its annual report, Attom Data Solutions surveyed 2,255 ZIP codes across the country with at least one Aldi, Trader Joe's or Whole Foods — and sometimes two or all three — then analyzed the impacts on the housing markets.
Borrowers who purchased a home near an Aldi in 2015 saw the highest price appreciation from then through 2020 at 41%. Meanwhile, homes near Trader Joe's and Whole Foods had five-year appreciations of 35% and 33%, respectively.
By Trader Joe's, the average homeowner has 37%
The returns for home flipping activities was the inverse with properties close to Aldi's bringing back 58%. Whole Foods and Trader Joe's trailed way behind at 36% and 30%, respectively.
The differences between the four metrics can be explained by location of the stores and starting points for the housing. Trader Joe's is based in California — a state with some of the highest prices in the country — and a high proportion of its stores reside there. Additionally, Whole Foods are known for being in affluent areas while Aldi's normally can be found in low-to-moderate income neighborhoods. Average home values stood at $644,558 for properties near Trader Joe's, $532,224 near Whole Foods and $250,850 near Aldi.
With better returns for borrowers and investors alike, vicinity to supermarkets is something homebuyers often seek. Lenders should expect higher demand for properties that meet the criteria.
