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Are Starbucks fueling AmericaÕ increasing home prices?

The new key to gentrification

In the past, the number of bank openings in a city would fuel gentrification. Now, it’s Starbucks (SBUX) . The iconic coffee shop could be playing a greater role in the nation than just giving American’s the daily dose of energy and life they need to survive. Quartz said in an article that Starbucks locations correlate with higher home values. The Quartz article is an excerpt from Spencer Rascoff’s and Stan Humphries' book, Zillow Talk

Before completely disagreeing with the assertion, Rascoff and Humphries provide a solid foundation for their claim.

Here’s what we can tell you: Starbucks equates with venti-sized home-value appreciation. Moreover, Starbucks seems to be fueling—not following—these higher home values.

And the reason why is that Starbucks’ real estate choices are, in their words, “as much an art as a science.” When deciding where to hang its next shingle, the company marries right-brain ingenuity with hard-headed, left-brain analysis—exactly as you should.

They even addresses certain arguments others could make such as

Argument:

 “Home prices rise and fall for a lot of reasons. How do we know this has anything to do with Starbucks?” For instance, maybe this isn’t a Starbucks Effect at all. Maybe it’s just a coffeeshop effect.

Response:

Homes near Dunkin’ Donuts reflect a similar historical trend. But while they appreciate faster than the nation’s housing as a whole, they still don’t appreciate as fast as properties that are now a quarter-mile from a Starbucks.

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3d rendering of a row of luxury townhouses along a street

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