The next time you’re looking for a home, consider scanning the neighborhood for a Starbucks location. While you’re at it, look around at the local business scene and look into public transportation options nearby — these things may have a significant impact on your future property value.
Real estate site Zillow analyzed the relationship between property values and proximity to Starbucks locations and found that homes within a quarter-mile of Starbucks increased in value by 96% between 1997 and 2014. The national average for that period was 65%.
There are many reasons a home’s value may rise or fall, and this analysis doesn’t mean a Starbucks in the neighborhood will cause values to rise, but it’s something to keep in mind when you’re home shopping.
The growth indicators in your area may be geographically specific. Scott Sheldon, a loan officer of Sonoma County Mortgages and contributor for Credit.com, said his area in California is significantly impacted by the tech boom in San Francisco. It’s consistently one of the most expensive cities in the country, so areas dozens of miles outside of San Francisco have seen increasing demand and rising property values. Sheldon said he works with people buying in Sonoma County and commuting well over 40 miles to work in the Bay Area. Again, proximity to San Francisco isn’t the only thing affecting home values, but it’s a factor.
He also noted how home values have spiked in Rohnert Park, an area where a casino was opened in 2013 and a hotel and surrounding restaurants are in development. If you canvass your potential neighborhood and research development proposals, you can get a good idea of why a home there might increase in value in the coming years.
Another example of things to look for is public transportation. Ben Papale, a Realtor with the Bellagio-Papale Group of American Realty in Chicago, said he sees a relationship between public transit improvements and increases in demand and property values.
“If a buyer asks me to help find a home in an up-and-coming area, the first thing I look for is access to the L (Chicago’s elevated train system). The second thing I look for is walkability: What’s the restaurant/entertainment/shopping scene look like?” he said via email.
Coffee shops, job opportunities, commercial development, public transportation — you can identify so many things that make a home appealing, just by browsing the neighborhood. There’s a lot more to the homebuying process, like figuring out how much house you can afford and if your credit is good enough to qualify for a decent interest rate, but don’t overlook the importance of considering a home’s future value. (You can check your credit scores for free on Credit.com.)
More on Mortgages & Homebuying:
- Why You Should Check Your Credit Before Buying a Home
- How to Get Pre-Approved for a Mortgage
- How to Get a Loan Fully Approved