When you think about the location when buying your next home, many of the typical things probably come to mind… Schools, shopping, crime, public transit etc… But have you thought about coffee? If you are a fellow Tim Horton’s lover, you may have, however what many people don’t think about is how coffee shops can affect the values of homes in the area.
There have been numerous studies over the last few years about the effect of upscale coffee shops such as Starbucks and other chains and the value of real estate in the area. These companies spend millions of dollars a year researching the right places to invest in for their next coffee shops. Many times these companies know about the “up and coming” neighbourhoods long before the general public. They know that as area’s change, so do the demographics and so do real estate prices.
They have also found that having a Starbucks in the area can increase the value just by being there. This is called the “Starbucks effect”. Just do a quick google search on this term and you will see what I’m talking about. The question is, does the Starbucks increase the value, or does Starbucks open because the values will increase? There are arguments for both of these cases.
If the values are going up because a Starbucks opens, you may wonder why. Some of the reasons that have been shared are that it brings the neighbourhood together. Think about it, if you have been to one of these coffee shops lately, you will find people mixing and mingling, and staying for hours. People bring their lap tops and work, others catch up with old friends and many times you have business professionals coming in for a quick $8 drink!
Part of the “Starbucks effect” is due to the money being put into the neighbourhood, it’s also because companies like Starbucks are putting their money into up and coming neighbourhoods long before the average investor does. This in turn gives some confidence to the community knowing that if there is a Starbucks opened, it must be a good neighbourhood.
Whatever the reasons are, there are definitely clear signs that coffee shops play a critical role in the community and even your pocketbook. If you are thinking about investing and don’t know where to start, maybe you can start looking at some overlooked and upcoming areas with Starbucks or other nice coffee shops popping up in them. Who knows, you might beat others to a great deal!
The Premier Home Group
Ryan Smith & Lindsay Russell
Keller Williams Edge Realty, Brokerage
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