Monday, November 10, 2014

Walmart Raises Property Values of Neighboring Houses

A new study from researchers at the University of Chicago and Brigham Young University indicates that a new Wal-Mart Stores Inc. store raises housing prices between 2% and 3% for homes located within a half-mile of the store and by 1% to 2% for houses between half a mile and a mile from the store. The researchers reviewed more than 1 million real estate transactions located near 159 Walmart stores between the years 2000 and 2006.

The authors state that this study on the impact of a Walmart store on house prices is the first peer-reviewed study of its kind. The study was published in the Journal of Urban Economics.

The study also noted a similar effect at the opening of a Target Corp. (NYSE: TGT) store. By looking at 42 new Target stores that were built in the same time period as the Walmart stores. The results suggest “that the opening of a new Target store increases property values by 1.5% for houses that are one to two miles away from the Target.”

The researchers conclude:
On average, the benefits to quick and easy access to the lower retail prices offered by Walmart and shopping at these other stores appear to matter more to households than any increase in crime, traffic and congestion, noise and light pollution, or other negative externalities that would be capitalized into housing prices.
(via 24/7 Wall Street)

1 comment:

  1. How many times since the 90s did we listen to the pundits on CNN and other places bemoaning over the surge of so-called Big Box retailers, claiming that these would lower the property values of people living within their circle of influence? Either because the Big Box retailers would attract undesirables or because they're ugly or because any other excuse their minds could conceive at the moment.

    The notion sounded preposterous at the time, because the idea that having a supplier of most goods you can need close by is actually a big advantage for a person than having to drive miles just to get a few things from the store at the lower prices compared to the closer and smaller corner store or convenience store.