Finding That Perfect Location
In my quest to find the perfect home location, as opposed to one poorly located, I was just given a new data point thanks to the folks over at RealtyTrac.
We already know you’d be wise to select a property near a Starbucks, and in close proximity to a Whole Foods or Traders Joe’s.
But to make your home buying decision even more foolproof, check to see if there’s also a Target nearby. By near, I mean a having a Target store in the same zip code as the subject property. That shouldn’t be too difficult…
Homes Next to Target Increase in Value More
Why? Well, RealtyTrac, similar to Zillow and the Starbucks phenomenon, discovered that home values appreciate more when they’re located next to a Target. And they actually base it on home sales versus what the homes were originally purchased for.
They looked at 24 million homes nationwide and discovered that Target-adjacent homes turn out to be big winners.
For example, homes sold in 2015 experienced a 27% price increase since they were first purchased if they were located near a Target store. The average price gain was $65,569, not to mention all that money those homeowners saved by shopping at Target.
Meanwhile, the average price gain for all zip codes nationwide was 22%, with an average price gain of $40,626, which is still fairly solid but noticeably less than the homes in the Target market (lame pun intended).
Homes Close to Target Come with Higher Taxes
However, there is one little drawback when it comes to living close to a Target. Apparently the homeowners taxes are higher.
Yep, homes in zip codes where Target stores are located have average property taxes of $7,001 versus an average of just $4,283 for all zip codes nationwide.
You can partially attribute that to the fact that homes near Targets have a higher value on average: $307,286 to be exact. That’s well above the $215,921 average value of homes across all zip codes nationwide. I’m assuming it’s also related to varying tax rates where the Target stores happen to be located.
You Might Want to Pass on Buying a Home Near Walmart
RealtyTrac also compared another superstore in their little study, the infamous Walmart. Love them or hate them, they won’t do your home value any favors, even if you do get to take advantage of price rollbacks, whatever those are.
It turns out homes in zip codes that also house Walmart stores don’t do so well in the valuation department. They appreciated just 16% with an average price gain of $24,900. If you’re paying attention, that’s less than half the $65,569 gain for Target store homeowners.
And it’s well below the nationwide average too. The only real upside to living by a Walmart is that the average home price is cheaper. Just $178,249 versus $215,921 across all zip codes nationwide and $307,286 by Target.
That means lower property taxes and an easier time qualifying for a home when it comes to affordability and DTI ratios.
Homeowners near Walmart paid just $3,146 in annual property taxes on average, below both the national average and the Target average.
Moral of the story is you’re probably better off buying a home near a Target as opposed to a Walmart. And that’s based on property value alone. We won’t get into other reasons that are outside the scope of this post.
By the way, I don’t know if Starbucks locations within Target stores count as a double victory, but it can’t hurt, right?