Zillow | Starbucks | Trader Joe's | Whole Foods and Redondo Beach Home Values



By now many people have seen Zillow CEO Spencer Rascoff and Chief Economist Stan Humphries analysis that homes located within a quarter mile of a Starbucks have appreciated more quickly than homes overall.

Actually, this appeared in their New York Times bestseller, "Zillow Talk: Rewriting the Rules of Real Estate"  where they found that homes nationwide located near the coffee chain did tend to appreciate more quickly and in some cases by a greater percentage than elsewhere.

So by that measure alone, we can expect homes in Redondo Beach to continue to appreciate because as far as I can tell its not more than a couple of blocks in either direction before we can get our caffeine fix. Makes sense because let's face it, designer coffee is a luxury.

Recently, Zillow followed that up with a similar study adding that homes near a Trader Joe's or a Whole Foods appreciate at nearly double the rate of the median home price. Nice! And as you kost likely have noticed there is a new Trader Joe's on the border of Hermosa Beach and North Redondo to complement the one in South Redondo and the two in Manhattan Beach.

By comparison, as of 2016, 2.8 million homes are located near one of 375 Whole Foods locations or 451 Trader Joe’s locations, and those homes have appreciated at double the rate of homes in other areas.

Here's what you might find interesting: Although this trend could be credited to the fact that these retailers usually open their stores in high income areas, Zillow researchers showed that’s not necessarily the case.



They found that before a Whole Foods or Trader Joe’s opened, homes appreciated at the same pace of comparable homes across the city. After the store opened, homes in close proximity began appreciating at a faster rate. (Does this explain the recent spike in Golden Hills home values?)

It appears both chains are either incredibly smart about finding neighborhoods on the verge of gentrifying, or the opening of either location positively impacts home values. I think it may be a mix of both factors. Certainly the Beach Cities is past the verge stage.

A better example of an area that is already expensive but in the midst of huge price price acceleration might be Silicon Beach where a Whole Foods recently went in at Playa Vista and a waterside Trader Joe's has been planned in Marina Del Rey (pictured above).

So how does Amazon entering the food sector change any of this? Maybe the new leading indicator will be the number of Prime Subscribers in a zip code. Anything is possible.