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What Neighborhood Factors Impact Home Values?

How might a neighborhood's nearest supermarket affect its home values?

The property data analysts at ATTOM Data Solutions set out to examine that question via its annual Grocery Store Wars analysis [1], which shows how living near a Trader Joe’s, a Whole Foods, or an ALDI affects homebuyers based on home price appreciation and home equity, or as an investor looking for the best home flipping returns and home seller ROI.

"Trader Joe’s leads the pack for homebuyers, while ALDI wins among investors; Average home value near Trader Joe’s is $644,558, compared to $532,224 near Whole Foods and $250,850 near ALDI," the researchers summarized before reporting their findings in further detail.

For its report, ATTOM studied current average home values, 5-year home price appreciation from YTD 2020 vs. YTD 2015, current average home equity, home seller profits, and home flipping rates in U.S. zip codes with a least one Whole Foods store, one Trader Joe’s store and one ALDI store.

For homebuyers:

ATTOM associated Trader Joe's with an average 5-year home price appreciation of 35%; for Whole Foods, the number is 33%; and ALDI showed a 41% appreciation.

In addition to leading for homebuyers with an average home value, Trader Joe's also leads in home equity, with homeowners earning about 37% ($255,066) equity compared with 33% equity for those near Whole Foods, and 26% ($71,204) for ALDI neighbors. The average equity for all zip codes with these grocery stores nationwide is 29%.

For investors:

Investors would be wise to look for opportunities near an ALDI, the researchers concluded.

Properties near an ALDI saw an average gross flipping ROI of 58%, compared to properties near a Whole Foods which had an average gross flipping ROI of 36%, and Trader Joe’s at 30%. The average home seller ROI for properties near a Trader Joe’s is 51%, and 43% for properties near a Whole Foods. The average home seller ROI for all zip codes with these grocery stores nationwide is 43%.

Infographics and full methodology are available at attomdata.com [2].