Homes within walking distance of Trader Joe’s are worth an average of $987,923.
Along with centrality and safety, real estate values are also inextricably tied to what food one can find within a reasonable distance. Some New York real estate agents are known to put “walking distance to Trader Joe’s” in listing descriptions while a new Whole Foods has long been a trope of a neighborhood reaching the final stages of gentrification.
“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,” Rick Sharga, executive vice president of market intelligence at ATTOM, said in a statement. “And that impact can vary pretty widely depending on which grocery store is in the neighborhood.”
In its annual report looking at the correlation between home values and neighborhood grocery stores, Attom Data Solutions found that homes with at least one Trader Joe’s in the same zip code are worth an average of $987,923.
Homes near a Whole Foods are worth an average $891,416 while that number drops to $321,116 for Aldi. But trendy department stores are not necessarily the best sign for an investor.
Here Comes the Whole Foods (And There Goes The Neighborhood)
“Having these high-end stores nearby gives the neighborhood a certain panache and implied quality of life, which in turn protects and enhances home values,” Scharga told Realtor.com.
Despite its lower neighborhood status, the low-budget grocery store that originated in Germany can be a sign that a neighborhood is on the brink of “exploding.” Attom’s research found that homes with Aldi in their zip code appreciated by an average 58% between 2022 and 2021.
That number is only a respective 49% and 45% for Trader Joe’s and Whole Foods.
The average gross flipping return on investment (ROI) in neighborhoods with an Aldi is 54% compared to only 24% and 28% for Trader Joe’s and Whole Foods.
While people looking to settle down may prefer neighborhoods with fancier stores, the presence of an Aldi can be a telltale signs that changes are afoot in a given neighborhood.
For those seeing a new Aldi pop up near where they live, it can be a sign that the value of their home will sprout up in a couple of years. Renters, however, can be at serious risk of being pushed out by rising prices and developer interest.
Investing Is Not The Same As Living There
While there are currently over 2,000 Aldi stores across the U.S., the states with the most locations are Illinois and Florida — many are located in both suburban towns and lower-income parts of cities.
“Buying a very expensive home located near discount retailers and grocery stores may be offsetting to prospective buyers, while budget-conscious buyers may worry about cost-of-living issues if they purchase a lower-priced home surrounded by luxe retailers,” Scharga said.
In general, investors look for very different things from the average buyer looking for a place to live and raise a family — already affluent areas generally do not see the kind of soaring home values that become “trendy.”
But often, developer hopes in a given area can also be disproportionate to actual buyer interest. After several seasons of skyrocketing prices in 2020 and 2021, listing prices in cities like Rochester, Detroit and Pittsburgh fell in the double digits by 2022.