SETTING THE RECORD STRAIGHT (publ. 3/7/2015, pg. A4)



Due to a photographer’s error, a photo caption accompanying a story about housing prices on the front page Friday prices listed the wrong city for the Starbucks pictured. It is in Walnut Creek..



Any self-respecting homebuyer knows all about “location, location, location.”

Now they may add another maxim to the mix:

“Starbucks, Starbucks, Starbucks.”

In a brilliant bit of marketing, the number-crunchers at online real estate giant Zillow have concluded that homes near a Starbucks appreciate faster than those that aren’t. They call it “the Starbucks effect.”

To be specific: Between 1997 and 2014, homes within a quarter-mile of a Starbucks jumped by 96 percent, on average, compared with 65 percent for all homes in the United States, according to a survey by Zillow’s CEO Spencer Rascoff and chief economist Stan Humphries. And while the Bay Area didn’t show the most dramatic results, Zillow found that homes near a Starbucks in the San Francisco metro area, which includes parts of the East Bay and North Bay, appreciated 13.3 percent more than all homes, while San Jose metro area home prices rose 6.8 percent more, just by being near one of the chain’s coffee outlets.

“Here’s what we can tell you,” the authors wrote in their new book, “Zillow Talk: The New Rules of Real Estate.” “Starbucks equates with venti-sized home-value appreciation. Moreover, Starbucks seems to be fueling — not following — these higher home values.”

Baloney, cry some real estate agents, claiming that home values rise for a whole slew of reasons and that attributing increases largely to having a Starbucks nearby is simplistic and silly.

“Companies like Starbucks study where the growth trends are and then place their stores there to be ahead of that growth,” said Steve Mohseni, a real estate agent with Re/Max Accord in Pleasanton. “The growth is not there because there’s a Starbucks — the Starbucks is there because they’re anticipating the growth.”

The Zillow guys were ready for the push-back, so they ran different numbers to see if Starbucks truly is an appreciation driver. They tracked home values in a very small ring within a quarter-mile of a store, then compared them with values in a ring between a quarter- and a half-mile from where that sweet smell of dark roast was wafting.

“Lo and behold,” they wrote, “the adjacent homes beat out the nearby homes. Those houses closest to Starbucks appreciated a little more than 21% over five years, while the houses slightly farther away only appreciated just less than 17%.”

As if that weren’t enough research, Rascoff and Humphries also tracked homes near Dunkin’ Donuts.

You guessed it: “While they appreciate faster than the nation’s housing as a whole,” said the authors, “they still don’t appreciate as fast as properties that are now a quarter-mile from a Starbucks.”

So how about Zillow’s own rising value? After all, its Seattle headquarters is about two miles from Starbucks’ corporate office.

Hmm …

Contact Patrick May at 408-920-5689 or follow him at Twitter.com/patmaymerc