Coffee Brews Up Real Estate Values
July 30, 2015
Courtesy of Better Homes and Gardens Mason-McDuffie
First light sweeps through the bay, softly illuminating the fog and ushering in the morning calm. As the city awakens, the quiet stillness in the cold San Francisco air is interrupted only by low grumbles of “Don’t even talk to me until I’ve had my coffee.”
In San Francisco, where you’ll see a couple of coffee shops just looking each way before crossing the street, many walk to their favorite roastery to get their morning fix. While the traditional coffee shop serves as little more than a pit stop between waking up in the dreary doldrums of morning and the techno rat race that consumes the remainder of the day, a number of boutique San Francisco coffee roasters have effectively established themselves as destinations.
Several of these new expressions of San Francisco culture have found their way into other cities and even countries. Blue Bottle has 6 stores in Manhattan and 2 in Japan, Philz is expanding to Washington DC, and several other coffee artisans also have plans to grow beyond The City. They are not just exporting coffee, they are exporting a unique life style, and this life style has a direct effect on the surrounding residential real estate.
What kind of effect could a coffee shop have on a home? A matched panel study compared residential real estate within walking distance of five locations densely populated by local coffee shops in San Francisco, and residential real estate between .5 and 2.5 miles of the same locations. The study demonstrated that the residential real estate within walking distance of these “destination” coffee shop clusters had a price per square foot 21% higher on average than the residential real estate between .5 and 2.5 miles from them. How do you like them beans?
This increase represents an average of $159 more per square foot for housing within .5 miles of these coffee shop clusters versus housing .5 to 2.5 miles away.
The following graph illustrates the decrease in price per square foot as residential real estate moves away from their respective coffee shop cluster:
The graph represents a $25.99 decrease per sq ft for condos for each .1 mile away from their nearest coffee shop cluster and a $14.35 decrease per sq ft for houses for each .1 mile away from the nearest coffee shop cluster. Click here to view the full study.
“This study demonstrates value as it relates to walkability, something that matters to Millennials. Understanding and reaching Millennials is an ongoing challenge for realtors.”
-Tommy Wolf, Director of Data Science for the Mason-McDuffie Real Estate Company
Knowledge is power. Now real estate agents have one more arrow in their information quiver.
About Better Homes and Gardens Mason-McDuffie Real Estate
Mason-McDuffie was founded in San Francisco in 1887, and is one of the oldest and best known real estate brokerages in the United States.
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