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An Unusual Secret Weapon? Boost a Home Price by $7k

By Melissa Dittmann Tracey, REALTOR® Magazine

Photo Credit: Walmart

Many critics have long-argued that Walmart’s “always low prices” often stretches to nearby home prices too. When the big-box discount retailer comes to town, some residents have protested, saying that the store had the potential to lower home values close by.

It was dubbed the “Walmart Effect,” and over the years it has made a lot of residents oppose proposed Walmarts coming to town.

But a new study finds that Walmart can actually give nearby home values a little lift.

Economists Devin Pope at University of Chicago and Jaren Pope at Brigham Young University analyzed more than 1 million real estate transactions near 159 newly opened Walmart stores between 2000 and 2006.

The researchers found that homes within a half mile of a new Walmart store saw their home prices increase on an average about $7,000 in the two-and-a-half years after the store opened. Homes located a half mile to one mile away saw a $4,000 increase.

Past studies have shown that having “satisfactory shopping” within one mile of housing can increase home values, as more Americans cite quick and easy access to shopping as a perk when looking for a new home. But the added nearby shopping to neighborhoods also has been criticized for adding traffic, noise, crime, and lighting pollution.

The researchers note that in the case of Walmart the convenience may outweigh any potential negatives to home values.

So when you’re trying to sell a home, does this mean you’ll want to be sure to include the distance to the closest Walmart in your listing ad? Maybe, according to this study.

Comments
  1. Bob D

    Between 2000 and about 2004-2005, real estate prices were going up because someone sneezed. It had absolutely nothing to do with a Walmart. It was a matter of lenders were basically giving money away and prices were going through the roof. GO back and take another study from 2007-2012 and you will probably find that prices dropped 25% or more in the same situation.

  2. Marian Jones

    Agreed. Plus Walmart does a tad bit of research before building..think they build where values are on the upswing or stagnant? Would have happened no matter what.

  3. Martha Brown

    I never learn…whenever an article has “secret” in the headlines, it is garbage. sip of coffee, click on through…

  4. Edna Mae nelson

    Great headline….those turned off by the promise of the often promised and undelivered “secret” lured in by the seemingly hard data driven 7k. The 7 sounds precise and thus backed by some empirical data of one sort or another. There is a study….just no logical conclusion.

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