‘Starbucks Effect’ bigger in Philly than most cities
The “Starbucks Effect” – the phenomenon that Starbucks boosts home values – has been a hot topic in real estate ever since Zillow CEO Spencer Rascoff and chief economist Stan Humphries explored the subject in a chapter of their book Zillow Talk: The New Rules of Real Estate.
The “Starbucks Effect” – the phenomenon that Starbucks boosts home values – has been a hot topic in real estate ever since Zillow CEO Spencer Rascoff and chief economist Stan Humphries explored the subject in a chapter of their book
Zillow Talk: The New Rules of Real Estate
.
Well, it turns out this "effect" is bigger in Philly than in most cities.
According to a recent blog on Zillow, the Philly metro area ranked second on the list of U.S. metro areas where the "Starbucks Effect" is the strongest.
The report, which compared a database of Starbucks locations with Zillow data, found that Philly metro homes located within a quarter-mile of a Starbucks increased in value by 112.6 percent between 1997 and 2014, compared with 81.5 percent overall.
Nationally, homes close to Starbucks increased in value by 96 percent.
By simply looking at a map of all the Starbucks locations in the Philly area, most of the shops are located in pricier areas anyway, such as Rittenhouse Square.
Rascoff and Humphries defend this point in their book, writing:
"True, properties near Starbucks locations tend to start out more expensive. But as you can see, these properties appreciate at a faster rate than U.S. housing on the whole. Interestingly, they're also recovering much more quickly from the housing bust."
[Zillow]
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