Having access to a good cup of coffee is more important than ever, and pumpkin spice lattes are an even bigger reason to visit a coffee shop at this time of the year. What does all of this have to do with home values? There’s more to it than you realize.
Consider the Demand for Coffee
Did you know there are more than 19,000 Starbucks locations around the world? This $15 billion company is well recognized as a must-have, especially on the daily route to and from work. For home buyers, buying a home that’s close to a Starbucks actually could be very important, and for home sellers, being close to one could raise your home value.
Don’t think that it’s true? A study by Quartz showed that, in fact, it is! They looked at the location of Starbucks locations and Zillow data to determine that, when it comes to home value, having a Starbucks close by often means a “venti-sized” home valuation is likely. In fact, Quartz found that a home near a Starbucks sold at an average of $137,000 compared to the same home without a nearby Starbucks selling for $102,000.
To be clear, Starbucks itself goes to extremes to find the best real estate to build and expand on, which often means they choose locations close to affluent communities or areas where they believe business will be highly lucrative. Think near main routes in middle-class and above neighborhoods and near freeway on-ramps.
The study found that it's not just a Starbucks effect either, but rather a coffee effect. They found that homes close to a Dunkin’ Donuts have the same type of higher valuation than areas without them. In all cases, having a coffee shop nearby often means home values will appreciate faster than properties without one.
While Starbucks has analytic teams working hard to determine where they should build new locations, as a homeowner, you don’t have that type of easy access to data about your community or the perfect place to buy. Yet, there are ways to get a better idea of your home’s value.
What Really Goes Into Home Values?
A home value is calculated based on various factors, not just where the next cup of hot coffee will come from (even during pumpkin spice season). There are plenty of other factors that play a role in determining a home’s worth. That includes the following:
Age and Condition
Your home’s age and the overall level of upkeep are big factors when it comes to home value. If you haven’t replaced a leaking roof, that degrades the value of the home. On the other hand, a 100-year-old home that’s beautifully maintained and restored can be worth much more. Home buyers want to purchase a home they don’t have to sink a lot of money into from the start.
Does your home’s living room still have that '70s vibe to it? Perhaps there are green and orange carpets in the basement, which is also walled with wood paneling. That’s going to date your home and reduce its overall value. If the home has an upgraded basement, on the other hand, that adds value, as do things like having an inground pool or hardwood floors throughout.
As noted, being close to Starbucks is a part of the puzzle, but that’s not the whole picture. Being close to the freeway, in an area with neighborhood parks and tree-lined streets with sidewalks, makes all the difference. People want to be able to drop their kids off at a school that’s nearby, grab that coffee, and get to work quickly. Location makes a big difference in this. Economic indicators in your area could matter, too, such as whether or not there are jobs within it or nearby.
The Local Market
The local market condition matters in home values, too. If your home is in an area with growth and new homes being built, that adds to the demand. If there’s lots of demand and too few homes, your property becomes even more valuable. If your area is in a buyer’s market, that drives up home values.
Improving Home Values
You can’t convince a Starbucks to be built close to your home to increase value, but you can do other things to boost it. Updating and modernizing it, but leaving out things like accent walls and very personal color choices, is a good starting point. You can also upgrade the basement, make sure the roof is in good condition, and keep the siding looking fresh and new. That will add value to your home if you plan to list it on the market.
Many factors go into calculating a home’s value, including the most recent sales that have occurred near you. With pumpkin spice season upon us, now may be a great time to list your home for sale if you’re close enough to a Starbucks. Just let your buyers know how many minutes it takes to get there!