How the downfall of Starbucks is destroying the housing market: 'This isn't just about coffee'

Daily Mail ^ | October 11, 2025 | Martha Williams

[Angelino97]

Starbucks just closed hundreds of locations, and while that's bad news for coffee drinkers, it could be even worse for the housing market...

This is because of the 'Starbucks effect' — the phenomenon where the coffee chain's presence is associated with rising property values and a perception of neighborhood affluence.

A Zillow study found that homes within a quarter-mile of a Starbucks appreciated far faster than those farther away — jumping 96 percent to $269,000 over 17 years, compared to a 65 percent rise to $168,000 for the average U.S. home — suggesting the coffee giant tends to move into neighborhoods on the rise...

the term also refers to how Starbucks sells a lifestyle — not just coffee. Its branding is aspirational, appealing to consumers who want a sense of comfort, community, and quality.

There is a similar concept tied to neighborhoods that have Whole Foods grocery stores.

When a Whole Foods opens in a neighborhood, property values and rents often rise. This is because the store signals a desirable, affluent area, attracting more upscale development and residents.

'Starbucks, like Whole Foods, has often been seen as a sign that a neighborhood has arrived,' Fort Lauderdale economist Michael Szanto told the Daily Mail.

A Zillow study found that homes near a Starbucks tend to rise in value faster than those farther away — suggesting the coffee chain often sets up shop in up-and-coming neighborhoods...

'Homes near Starbucks over 17 years appreciated at 96 percent. Homes near Dunkin' Donuts at 80 percent. And nationwide, home prices rose 65 percent,' Zillow's CEO Spencer Rascoff said.

With a grande latte now averaging around $6, the presence — and popularity — of Starbucks has become a shorthand for neighborhood affluence.

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TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: dunkindonuts; housingmarket; starbucks; wholefoods; zillow

[PAR35]

Well, we used to have 2 within a quarter of a mile, we are down to one now. Guess our property values are in free fall.

[E. Pluribus Unum]

Let me be the first to say that correlation is not causation.

[albie]

This is utter BS. The schools drive the housing market more than anything.

[Dilbert San Diego]

Perhaps an outlet such as Starbucks or Whole Foods, is a surrogate indicator that the area is an upscale area.

And this perception affects how people decide where to live, and other businesses where to locate.

[jmaroneps37]

Hogwash. If this is true why are they shutting down? The writer has it backwards. The neighborhood made Starbucks not the other way around. Maybe if their coffee didn’t taste like someone put a cigarette out in it, they would be doing better.

[ChildOfThe60s]

I suspect there could be interesting demographics involved.

So you really want to live in a neighborhood full of CA refugees bringing their leftist values and excessively inflating property taxes?

A broad generality, but.....

[dljordan]

I look at the prevalence of yoga studios myself.

[Farmerbob]

...worse for the housing market...

I figured most Starbucks workers lived in their mom’s basement.

[cuban leaf]

Starbucks must be an addiction. We moved from Seattle to rural Kentucky 14 years ago. We don’t have any Starbucks near us and don’t miss it at all. In fact, almost all the coffee I drink comes from Kirkland brand Keurig cups.

Except when we travel. Then it’s usually the coffee at Loves or Pilot. And their coffee is Amazing - if you know what you’re doing.

Buying your daily coffee drink at Starbucks is like buying your daily lunch at Ruth’s Chris. Unless you’re independently wealthy, it’s just stupid.

[rexthecat]

I live on an island. No Starbucks, no McDonald’s, one gas station, one grocery store. Not worried about home values.

[CondoleezzaProtege]

This has impacted me directly and still does. There were only two Starbucks locations that closed in my region but those were the only two I frequented - almost daily — and unlike the other locations, had NICE staff and NO drive-thru.

The first one I understood did not get a lot of foot traffic, but the second one was in a super busy part of town with few coffee options and was always crowded.

Don’t care for the remaining locations, nor the hipstery mom & pop cafes either — many of which don’t even open until 8 or so. I loved that my Starbucks opened at crack of dawn.

😔 First world problems but still. And the employees only got 48 hours notice. Can already tell I don’t care for the CEO. He represents the reason Gen Z has gone socialist.

[cuban leaf]

I’ve said for years that you know you live in a dumpy or poor neighborhood if you have either of these nearby:

Used tire store
Payday loans.

Regarding nice neighborhoods I think the three things to look for are
Location X3

And a fourth is how well the neighbors maintain their homes.

[catnipman]

the REAL correlation is that starbucks is probably closing locations in lower-income areas they never should have opened in the first place ...

[butlerweave]

People have to Mortgage their house to buy a Starbucks coffee ?

[Texas Eagle]

Maybe if there wasn't a Starbucks on every corner.

We have 3 Starbuckses in our little Northern Commiefornia town and no Chik-fil-As. 'Sup with that?

[9YearLurker]

No. You shouldn’t pay $6 for a cup of coffee. Even in 2025.

[roadcat]

The writer has it backwards. The neighborhood made Starbucks not the other way around.

Yes. If a neighborhood is in decline, the shops shut down. They will open shops in neighborhoods on the rise. Happening in my neighborhood, where we have a Starbucks. Main draw was a newly built school, then library and police department building. Construction exploded with new shops being opened, latest being Nations burgers, In-N-Out, and a new swimming pool. Main cause are biotech companies building near us over the last 20 years. I wouldn't care if Starbucks shut down, not needed here.

[mythenjoseph]

Affluence = to lazy or competent enough brew your own and shell out over $5.00 dollars for a cup of coffee.

[Myrddin]

The Starbucks that closed in Pocatello had 48 hours notice to the employees. Another 48 hours later and the signage was stripped and windows covered in paper. They were very swift in vacating the premises.

During my exile in San Diego, there was a spot on a street corner in Mira Mesa where you could see 5 individuals Starbucks shops. All of them were busy.