What do grocery stores have to do with housing? Potentially, quite a bit.
ATTOM, a curator of real estate data for the nation, including land and property data, released its 2022 Grocery Store Wars analysis at the end of November. According to the data, your home value might be positively affected if you live near an ALDI, Whole Foods or Trader Joe’s. If you’re a home buyer looking for a new place to live, consider which grocery stores are nearby because of price appreciation and equity.
Investors can also consider this interesting data as they look for the best returns on flips or ROI.
ATTOM looked at the current average home values and five-year home price appreciation for year-to-date 2022 compared to year-to-date 2017. The analysis also included current average home equity, profits for home sellers, and the rates of home flipping in zip codes in the United States with at least one Whole Foods, one ALDI, and one Trader Joe’s.
Rick Sharga, the executive vice president of market intelligence at ATTOM, said that if you’re a savvy homebuyer, you might think about where you’re going to go grocery shopping when you look for a new home. Being near grocery stores isn’t just convenient—it may impact your equity and home value.
The impact can even vary pretty significantly depending on which grocery store you have nearby.
ALDI had the advantage. Homes near an ALDI realized a 5-year home appreciation of 58%, 49% for those properties near Trader Joe’s, and 45% for homes near Whole Foods.
For homeowners, Trader Joe’s leads with an average home value of $987,923, and it also leads in equity. Homeowners earned an average of $520,842 in equity, compared to Whole Foods at $433,311 or 45%, and for ALDI, it was 38% or $132,643.
The average value of a home near ALDI was $321,116 and $891,416 near Whole Foods.
If you’re an investor, look for homes near ALDI. The average gross flip ROI for homes near ALDI is 54%, and the ROI averages 28% near whole foods, and near Trader Joe’s, it’s 25%.
There’s an average home seller ROI of 61% for homes near an ALDI, 58% for homes near Trader Joe’s, and 51% near Whole Foods.
So why are grocery stores so crucial in real estate?
For consumers, proximity to amenities that make life easier will make them more willing to pay a premium for real estate.
Whole Foods, as an example, is considered a high-end grocer, and they have a wide selection of top products, so consumers might feel like having one nearby adds value to their life, which will potentially add value to their homes.
Of course, having a grocery store nearby isn’t going to increase your home's value instantly. A lot of factors influence your home’s market value, but over the years, when retailers that are sought-after and important for people’s daily lives open up in the area, it does influence market value.
Unfortunately, on the flip side of this are food deserts.
Food deserts are geographic areas with few convenient options for affordable, healthy food. These food deserts are often found in places with high poverty levels. There may be smaller populations, higher rates of vacant homes, or residents with higher unemployment rates or lower income. Nearly 13% of the U.S. population is believed to live in an area that the USDA considers a food desert.
While talking about the grocery store wars as far as property values can seem fun and even a little silly, the reality is that access to amenities, including places to buy fresh, healthy foods, are important for the quality of life and wellness.