If you’ve ever had to drive 10 miles just to get some groceries, you’ll know just how much of a difference a supermarket can make in your day-to-day life.
Living in a food desert, or an area that has only quick-stop conveniences stores rather than supermarkets with fresh fruit and vegetables, is synonymous with more health problems, lower quality of life and, naturally, lower home values.
A new analysis by Attom Data Solutions, released Friday, confirmed what many may have already felt intuitively. Homes within a close range of popular food stores such as Trader Joe’s and Whole Foods have high home value rates and investment returns.
On average, a home within close range of a Trader Joe’s, a popular supermarket chain known for its budget-friendly fresh food and healthy frozen items, is worth $608,305. Homes near a Whole Foods, a high-end healthy food supermarket more common to urban areas, is worth $521,142.
Homes near ALDI, a discount supermarket known for its super-low grocery prices, have home values more in line with the national average ($222,809), but the presence of the supermarket can indicate potential for major neighborhood growth.
The study, which looked at 1,859 U.S. ZIP codes with a least one Whole Foods store, one Trader Joe’s store and one ALDI store in them, found that return of investment, or how much money can be generated from investment in a property in the area, is correlated to being within close range of one of the three supermarkets.
On average, homes near Trader Joe’s had a homeseller ROI of 51 percent, compared to 41 percent for homes near a Whole Foods and 34 percent for homes near an ALDI. If you average all ZIP codes with these grocery stores, the ROI comes out to 37 percent.
When it comes to added equity, homeowners near a Trader Joe’s have an average 37 percent equity in their homes ($247,445), while homes near Whole Foods had 31 percent equity ($187,035) and homes near ALDI have 20 percent equity ($53,650).
But while the presence of a Whole Foods or Trader Joe’s can indicate the prestige of a given neighborhood, a nearby ALDI can be a big hint of investment potential.
According to the study, homes near ALDI have an average gross flipping ROI of 62 percent, which means that properties in the neighborhood are likely to grow in value. By contrast, homes near Whole Foods which had an average gross flipping ROI of 35 percent while those near Trader Joe’s sit at 31 percent.
Just like with a short commute, close access to groceries can shave hours off your week and, as a result, make a neighborhood a more desirable place to live.
When looking at growth over a five-year period, the study found that properties near ALDI have grown by 42 percent while those near Trader Joe’s and Whole Foods grew by 33 percent and 31 percent, respectively. (Homes within close range of one of these three stores grew by 38 percent.)
While more research needs to be done to show how these neighborhoods fare when compared to those with other supermarkets or in bonafide food deserts, the signs point that food access is an important factor in a neighborhood’s potential in the long run.