Sounds like a ridiculous question, but can living near a Starbucks actually affect Vero Beach home values? According to a new book, "Zillow Talk: The New Rules of Real Estate" by Zillow CEO Spencer Rascoff and Chief Economist Stan Humphries, it just might.
The pair write that Starbucks is actually the fuel for gentrification. "Starbucks equates with Venti-sized home-value appreciation," Humphries and Rascoff write. Moreover, Starbucks seems to be fueling — not following — these higher Vero Beach home values.
Vero Beach Home Values Higher Near Starbucks
To make the argument that Starbucks is actually causing this growth, rather than just piggybacking on it, the executives looked at homes within a quarter-mile of a Starbucks compared to those between a quarter-mile and half-mile away. The increase in the value of houses within a quarter-mile radius of a Starbucks outpaced those of Vero Beach home values slightly further away during the five years after the coffee shop arrived in the neighborhood.
In a 17-year span, homes near Starbucks appreciated 96 percent, compared to the average home which appreciated 65 percent. So, assuming Starbucks truly does drive gentrification, how does Starbucks choose where to put its next location and send Vero Beach home values skyrocketing?
The team looks at traffic patterns, businesses and maps for every potential location. But it also leaves a lot of the decision up to "art," and regional teams who know the local areas well.
Turns out, Starbucks' data also has a pulse on the national consumer's mood on the economy, not just on setting the future for Vero Beach home values. CEO Howard Schultz told Time Magazine that Starbucks sales fluctuate with the national mood and tank during moments of political unrest.
What does all this mean? Do you need to add "near Starbucks" to your list of things to look for when shopping for your next home? Perhaps. But we'd say, "don't make it mandatory."
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