Looking for high-value homes? Find the nearest Trader Joe's
A study released by ATTOM found differences in values and appreciation based on a home's proximity to specialty grocery stores.
- Home flippers found the greatest five-year return on investment for homes near Aldi stores.
- The average home values vary widely between the 3 store chains studied.
When it comes to selling a house, agents might consider including nearby grocery stores in the listing description.
ATTOM Data Solutions released its report on grocery stores, looking at appreciation, home value and other factors over a five-year period, focusing on homes near a Trader Joe's, Whole Foods or Aldi. They found that proximity to a desirable shopping destination can be a boon when it comes to home values.
"Smart homebuyers might want to consider where they'll do their grocery shopping when they're shopping for a new home," said Rick Sharga, executive vice president of market intelligence at ATTOM. "It turns out that being located near grocery stores isn't only a matter of convenience for homeowners but can have a significant impact on equity and home values as well. And that impact can vary pretty widely depending on which grocery store is in the neighborhood."
For its 2022 report, ATTOM found that while homes near Trader Joe's and Whole Foods had the highest average values, homeowners near Aldi stores experienced the biggest jump in appreciation.
Homes near Aldi stores also had the highest return on investment for flippers (54%), according to the report, and an average home seller ROI of 61%, while properties near a Trader Joe's and Whole Foods came in at 58% and 51% respectively.
One of the more striking differences shown in the study, however, was home values. The average home value near Trader Joe's stores was nearly $988,000, while Whole Foods was just over $891,000. Homes near Aldi stores had an average value of just over $321,000.
Sharga noted in an email that all three companies do a good job of locating their stores in communities that will resonate with their offerings: Trader Joe's and Whole Foods tend to target upscale communities, while Aldi focuses on mid-market neighborhoods where shoppers are looking for bargains.
"This also holds true from the development side of the equation. Securing a Whole Foods or Trader Joe's as a shopping center anchor makes it easier for developers to attract other retailers who cater to the same affluent audience," Sharga said. "Having Aldi as an anchor has the same affect on developments in its mid-market sweet spot. What's interesting is that, as a rule, all three of these stores tend to be in markets where home values improve and homeowner equity increases."
Other studies trying to measure the impact grocery stores have on a neighborhood have been less conclusive. Some found a benefit to homes within a five-mile radius, while others, including a 2015 Duke University study, found it hard to draw conclusions.
"While there may be beneficial trends on a larger scale from introducing a new store into a neighborhood, the impacts of individual stores on home prices can be difficult to predict," according to the Duke study.
One consistent finding is that not having any stores nearby, commonly referred to as "food deserts," not only negatively impacts home values but on the quality of life of a neighborhood. One study estimated 19 million Americans have limited access to grocery stores.
"Disproportionately found in high-poverty areas, food deserts create extra, everyday hurdles that can make it harder for kids, families and communities to grow healthy and strong," concluded a 2021 report done by The Annie E. Casey Foundation.