Where a home is located and the amenities the location offers are important factors homebuyers consider when searching for a home. These factors not only determine the value of a property growing over time, but also the comfort and convenience for individuals and families. Although people focus on different amenities depending on their age and lifestyle, living close by to a grocery store is a top amenity for most homebuyers. Moreover, the type of grocery store can raise the value of a home even more.
"For homebuyers, location, location, location is the most important consideration when purchasing a home. You can always change your home by remodeling and making some renovations, but you can't change the neighborhood," says Alan Barbic, president of the Silicon Valley Association o Realtors. "Safety, of course, is a primary consideration for homebuyers. Homebuyers with children also consider the school district. When it comes to amenities, the grocery store is most certainly a major factor for many homebuyers."
According to the Federal Reserve Report on the Economic Well-Being of U.S. Households in 2018 - May 2019, overall, across different age groups, 87 percent of respondents ranked having a grocery store nearby as the most important neighborhood amenity, followed by shops and restaurants, 75 percent; bank or credit union, 65 percent; place of worship, 48 percent; library, 48 percent; park or playground, 43 percent; and public transportation, 37 percent.
The grocery store's importance shoots up particularly among seniors. Ninety percent of respondents ages 60 and over ranked having a grocery store nearby a "moderately or very important" neighborhood amenity; 18-29 years old, 88 percent; 30-44 years old, 84 percent; age 45-49 years old, 87 percent. A nearby grocery store also was the top amenity cited among rural (82 percent) and urban (88 percent) residents.
The type of grocery store can likewise make a difference in home appreciation, return on investment and equity gain. A recent study by ATTOM Data Solutions found grocery store chains like Trader Joe's, ALDI and Whole Foods raise home values. The average appreciation for all zip codes with these grocery stores nationwide is 38 percent. Over a five-year period the average home seller return on investment for all ZIP codes with these grocery stores nationwide is 37 percent. The average equity is 25 percent.
Among these three grocery chains, properties near an ALDI have seen an average 5-year home price appreciation of 42 percent, compared to 33 percent appreciation for properties near a Trader Joe's, and 31 percent appreciation for homes near a Whole Foods.
Trader Joe's ranked top in ROI for sellers and added equity for homebuyers. The report states homes near a Trader Joe's had an average home seller ROI of 51 percent, compared to homes near a Whole Foods which had an average home seller ROI of 41 percent, and ALDI at 34 percent. Homes near a Trader Joe's have added equity, owning an average 37 percent equity in their homes ($247,445), while homes near Whole Foods had an average of 31 percent equity ($187,035) and homes near ALDI had average 20 percent equity ($53,650).
Properties near an ALDI are a boon to investors, with an average gross flipping ROI of 62 percent, compared to properties near a Whole Foods which had an average gross flipping ROI of 35 percent and Trader Joe's at 31 percent. The average gross flipping ROI for all zip codes with these grocery stores nationwide is 52 percent.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.