Studies have shown that proximity to boutique and high-end grocery stores such as Trader Joe’s and Whole Foods can be a boon for home values. However, El Paso County officials say that living near one of these stores is not directly related to increased property values.

A study released this month by ATTOM Data Solutions, a national provider of real estate and property data, found that homes near a Trader Joe’s realized an average return on investment of 51 percent, compared to homes near a Whole Foods with an average home seller ROI of 41 percent and ALDI, a supermarket chain based in Germany, at 34 percent.

The average home-seller’s return on investment for all ZIP codes with these grocery stores nationwide is 37 percent, said Christine Stricker, senior marketing manager of projects at ATTOM Data Solutions. The study used current average home values, five-year home price appreciation from YTD 2019 vs. YTD 2014, current average home equity, home-seller profits, and home flipping rates on 1,859 ZIP codes nationwide with a least one Whole Foods store, one Trader Joe’s store and one ALDI store, Stricker said.

Homes near a Trader Joe’s have added equity, owning an average 37 percent equity in their homes ($247,445), while homes near Whole Foods had an average of 31 percent equity ($187,035) and homes near ALDI had average 20 percent equity ($53,650), Stricker said. The average equity for all ZIP codes with these grocery stores nationwide is 25 percent, she said.

From an investor standpoint, properties near an ALDI are an investor’s cornucopia with an average gross flipping ROI of 62 percent, compared to properties near a Whole Foods, which had an average gross flipping ROI of 35 percent, and Trader Joe’s at 31 percent. The average gross flipping ROI for all ZIP codes with these grocery stores nationwide is 52 percent.

Properties near an ALDI have seen an average five-year home price appreciation of 42 percent, compared to 33 percent appreciation for properties near a Trader Joe’s, and 31 percent appreciation for homes near a Whole Foods.

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Average appreciation for all ZIP codes with these grocery stores nationwide is 38 percent.

Colorado Springs

ATTOM’s study includes homes in the 80918 and 80920 ZIP codes, where Trader Joe’s — located in the University Village shopping center on North Nevada — and Whole Foods, in the Chapel Hills East neighborhood on North Academy Boulevard, are respectively located.

The study found that the average home value for the 19,623 homes located near Trader Joe’s was $302,902, with an average equity of $102,121, or 33.7 percent. Median sales prices in 2019 were $298,000.

The 14,165 housing units near Whole Foods had an average value of $362,803, with $117,080 in equity, or 32.3 percent. Colorado Springs does not have an ALDI.

However, Steve Schleiker, El Paso County assessor, said that while the locations of these grocery stores may have an impact on potential homebuyers, they do not seem to be significantly affecting property values.

“Where’s the closest supermarket?” Schleiker said. “Different buyers could possibly look at that. … I have not heard or seen anything in regards to certain grocery stores having an effect on residential property values.”

The neighborhoods immediately surrounding Trader Joe’s — Pinecliff, Cragmor and Pulpit Rock — all had 2019 median home values ranging from $251,238 in Cragmor to $349,372 in Pinecliff. Pinecliff, in particular, saw its values jump 21.9 percent from $301,924.50 in 2017, Schleiker said.

The Chapel Hills neighborhood, where Whole Foods is located, saw similar jumps with median values of $318,725.50 on the east side and $326,482 on the west — increases of 16.39 percent and 22.59 percent, he said.

“[Neighborhoods near] Trader Joe’s are in the high 250s, mid-300s,” Schleiker said. “Whole Foods is the same.”

Schleiker also pointed to the Garden Ranch neighborhood, where Sprouts Farmers Market is located on Dublin Boulevard, and the Lowell and Hillside neighborhoods near Natural Grocers on South Nevada Avenue. Garden Ranch’s 2019 median values were $265,155.50 — up 23.74 percent from 2017.

Conversely, Lowell and Hillside each saw gains of more than 30 percent from 2017, but Schleiker did not attribute those numbers to the presence of Natural Grocers, which relocated in October 2017 to the area known as the South Nevada Urban Renewal Corridor.

“We’re seeing significant increases down there on Lowell, but that is due to the location of downtown, with everything happening there, and the redevelopment of Ivywild and Hillside,” Schleiker said. “In my opinion, what is going on down there is, you’re looking at $175,000 homes, which are still affordable to a lot of people. And the proximity to downtown and the growth that’s happening down there — people are paying top dollar. … They start getting into bidding wars. If you’re asking $180,000 for your house, and you’ve got three offers, then for me to get that house, I might have to offer $5,000 or $10,000 more. That’s happening a lot here in El Paso County.

“It’s a lot of Millennials,” Schleiker added. “They want to bike to work.”

With costs of living on the rise, Schleiker said, more people may simply be opting to do their grocery shopping at less expensive alternatives, such as King Soopers, Target and Walmart.

“Everything is costing more. Utilities have gone up, insurance has gone up because of hail damage, food has gone up — but our income is not keeping up with the cost of living,” Schleiker said. “Are more people going to supercenters where it’s cheaper?”

Additionally, stores like Trader Joe’s and Whole Foods have a unique customer base that is often willing to go the extra mile — literally — for their products, Schleiker said.

“Trader Joe’s has a lot of their own products, so some of their customers may drive five, eight miles away,” he said. “If you go up to the North Nevada location, you’ve got Costco there, Lowe’s, Kohl’s and all those large type of organizations, so the traffic in there is crazy — the amount of customers that get pulled up there is crazy.”

Also contrary to conventional wisdom, vacant storefronts are not necessarily anathema to buyers, Schleiker said. The former Sam’s Club location on South Academy that has sat vacant for more than three years seems to have had zero effect on surrounding         property values.

“There really hasn’t been much movement — it’s been sitting on the market ever since,” Schleiker said. “With a large box store, it takes a very different buyer to go in there and fill that.

“But as a buyer, if you’re living close to that Sam’s Club, the question is, what potentially could that become?” he added.

Smaller towns may feel the effects of fewer grocery store options more than cities closer to the Springs’ size, Schleiker said.

“In a small town, when you have a large business like that shut down, it could have an impact on property values… where folks are going, ‘You know, maybe I need to move closer to shopping retail,’” he said. “People just move and you have more homes on the market than you have buyers. But I have not seen an impact or an effect of certain grocery stores here in El Paso County.”