Confirmed: Starbucks knows the next hot neighborhood before everybody else does

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What fuels gentrification? The answer is the same thing that fuels the rest of us: coffee.

But not just any old cup o’ joe.

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Starbucks equals big bucks

Although some may scoff that the predictive value of a given retail chain doesn’t mean much, locations near Starbucks are, indisputably, highly lucrative.

True, properties near Starbucks locations tend to start out more expensive. But as you can see, these properties appreciate at a faster rate than US housing on the whole. Interestingly, they’re also recovering much more quickly from the housing bust.

What does that look like in practice? Let’s look at the historical home value appreciation of areas that now are located within a quarter mile of a Starbucks. A home that is now near a Starbucks would have sold, on average, for $137,000. A home that is not near a Starbucks would have sold, on average, for $102,000.

Fast-forward 17 years to 2014. That average American home has now appreciated 65%, to $168,000. But the Starbucks-adjacent property has far outpaced that, appreciating 96% to $269,000.

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