Trader Joe's: Good for cheap groceries, great for home values
It鈥檚 an old saying in real estate: Want a pricey house? Find a cheap grocery store.
You鈥檙e right, that鈥檚 not a saying at all. But according to a new study from , released this week, there鈥檚 some truth to it. For your home to yield the best return on investment, it鈥檚 better to own near Trader Joe鈥檚, the much-loved, budget-minded grocery chain, than it is to own near Whole Foods, its pricey yet equally beloved rival. 聽But there鈥檚 a catch: sitting on that goldmine of heady real estate prices and cheap smoked Gouda generally comes with higher property taxes.
Researchers at RealtyTrac analyzed millions of homes in zip codes with at least one Trader Joe鈥檚 (but no Whole Foods) and in zip codes with at least one Whole Foods (but no Trader Joe鈥檚). On average, Homeowners near a Trader Joe鈥檚 have seen the value of their homes increase 40 percent since they purchased them; Whole Foods-adjacent property owners saw prices increase 34 percent, in line with the national average.
Joe鈥檚 homes (if I may) were also worth more, averaging 聽$592,339 in price 鈥� 5 percent higher than those near a Whole Foods.
However, those lucky homeowners also tend to pay a lot more in property taxes than their peers. The average US homeowner pays $3,239 annually in property taxes. Owners near a Whole Foods pay $5,382, and those near a Trader Joe鈥檚 pay $8,536 鈥� 59 percent higher than those near a Whole Foods.
Even with the higher sales tax, this all seems a little unfair. Thanks to its strategy of selling mainly private label products and an ever-rotating inventory to keep costs down, Trader Joe鈥檚 has a much more budget-friendly reputation than the store nicknamed 鈥淲hole Paycheck鈥� (even though, , items at Whole Foods are cheaper). Isn鈥檛 the fact that those with less valuable homes have to shell out for more expensive groceries yet another symptom of worsening wealth inequality in this country?
Not quite. More than likely, it鈥檚 just a matter of geography. Whole Foods and Trader Joe鈥檚 have a comparable number of locations (approximately 420 and 450, respectively). Both have a strong presence in urban areas, but looking at location maps, Trader Joe鈥檚 is more on the coasts, particularly in high-cost areas like California and the Northeast.
Whole Foods, on the other hand, can be found in the middle of the country, in Trader Joe鈥檚-less states like Idaho and Alabama (which will get its first TJ鈥檚 ). That means the Trader Joe鈥檚 sample is likely skewed more toward some of the most desirable areas of the US. Furthermore, the study didn鈥檛 include the best neighborhoods of all: those with both grocery stores close at hand. Residents of those areas don鈥檛 know how their home price appreciation lines up with their grocery store offerings, but they can pick up their cheap pantry staples at Trader Joe鈥檚 and still have time to swing by Whole Foods for nice piece of wild-caught haddock .聽
