The Whole Foods Effect may be a myth, says RealtyTrac
8/16/2015 | Real Estate Blog
Last December and January, we posted about artist James Dupree’s argument with the Philadelphia Redevelopment Authority over plans to pull down his studio to make way for a grocery store. The neighborhood, Mantua, did not have a grocery store, and everyone agreed that a successful revitalization of the area called for a grocery store within walking distance of most residents.
Dupree’s building was part of a dilapidated city block that would have been perfect for a grocery store, but Dupree did not want to sell. The PRA did not even have a commitment from a developer to build on the site; the agency just wanted the block cleared. After a good deal of legal wrangling, Dupree prevailed.
We thought of that proposed grocery store when we read about a report from RealtyTrac, an online real estate data analysis company. RealtyTrac wanted to test the “Whole Foods effect,” the idea that having a Whole Foods in a neighborhood will increase home values. The researchers expanded the study to determine if neighborhoods near Trader Joe’s stores fared better than their Whole Foods counterparts.
It turns out that, nationwide, Trader Joe’s neighborhoods have done better than Whole Foods neighborhoods. In the former, home values increased by 40 percent (calculated from purchase date to study date). In the latter, homes saw just a 34 percent increase. In addition, Trader Joe’s homes were valued an average of 5 percent above Whole Foods homes.
Along Philly’s Main Line, the results were a little different. We’ll explain more in our next post.
Source: Philadelphia Business Journal, “Better to own a home near Trader Joe’s or Whole Foods?” Patricia Madej, Aug. 12, 2015