I don’t think anyone who has ever thought about buying or selling real estate will not understand the “location, location, location” thing. Real estate doesn’t move, and there is a finite supply. Where a home is located has a lot to do with value and what buyers will pay to live there. Sometimes the location factor can have a greater impact due to the neighbors. I don’t mean other residences either.
There has for years been something called the “Starbucks factor.” Data shows that homes near a Starbucks carry higher values than those farther away, even when other amenities and features are the same. Sometimes a new Starbucks is an indicator of neighborhood change or gentrification. Their market research is amazing, and often local real estate trends are uncovered early.
Now there is more information surfacing in reference to organic and specialty grocery stores. Trader Joe’s and Whole Foods are examples. Data is accumulating that reinforces the trend for home values to increase faster in close proximity to these businesses.
One reason could be that the higher cost of organic food means that regular customers must be in higher income brackets. Of course, they will also be willing and able to pay higher prices to live where they want and enjoy their favorite amenities. When a home buyer isn’t struggling to reach a price level for a particular neighborhood, prices tend to rise faster than in other areas. When home buyers want the best produce and niche foods, we find that they want to be near the places where they can get them.
Okay, what does this mean for home buyers? Of course, if you’re trying to make a decision about neighborhood and can afford it, you may want to place more emphasis on the home closer to one of these upscale or niche businesses. Over time, your investment should increase in value faster, or at least that’s what data is telling us.
Even more exciting, especially for investors, can you find a Starbucks, Whole Foods or Trader Joe’s breaking ground? This is especially true if it’s the first of this group in the neighborhood. They’re paying high dollar market analysts to gather demographics to support the significant investment they must make to build their new business. Why not take advantage of their due diligence if you can buy in the area?
For a double whammy, if you can find a neighborhood about to go through change, and these businesses are moving in, you may be able to pick up a bargain that will have an almost immediate value bump as the word gets around. This could be a great wholesaling or flip opportunity if you get there early enough.
As the glut of foreclosures continues to decline, you can create some opportunity of your own. A retail flip may be worth some rehab work. You may even find a rental home investment to be a great strategy. There is always opportunity if you keep up with developing trends, and this is one that seems to have legs.
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Source: Black Voices Huffington Post
Link: Location, Location, Location … Near the Right Store