Economists: Being Near A New Walmart Actually Increases Home Values

While the sight of a new Walmart store going up always causes some area residents to frown, a new report claims that houses within the immediate area of a new Walmart actually see a slight uptick in value.

The paper, from researchers at the University of Chicago and Brigham Young University, looked at 159 Walmarts in 20 states that opened up between 2000 and 2006. It then compared nearby home prices for 2.5 before and after each store opened.

According to their findings, average prices went up 2-3% on average for homes within half a mile from a store, and 1-2% for those houses between half a mile and a mile from the a Walmart.

“When you see housing prices increase and a change in an environmental amenity, there is a group of people happy with that amenity,” said one of the paper’s authors.

The researchers say they controlled for outside factors like national housing trends that could have led to price increases. However, ABC News reports that the paper does not discuss the changes in overall home prices for each of the 159 communities.

Even the authors admit that, since the paper doesn’t go beyond the 2.5 years following the opening of each new Walmart, that prices could have continued to go up, but may also have decreased.

It’s worth pointing out that the most recent home price data in this study would be from late 2008/early 2009 — and we’ve all seen what has happened to the general level of house prices since then, regardless of how close one’s home is to a Walmart. It would be interesting to see this study repeated a year from now to see if the researchers’ claims hold up.

The Walmart Effect on Home Prices: Economists Say Home Prices Have Increased Near Stores [ABC]


Edit Your Comment

  1. Goldensummer says:

    ” between 2000 and 2006. It then compared nearby home prices for 2.5 before and after each store opened.” years? months? weeks?

    • rugman11 says:

      “Even the authors admit that, since the paper doesn’t go beyond the 2.5 years following the opening of each new Walmart, that prices could have continued to go up, but may also have decreased.”

      Yes, it’s an error, but one that was explained five sentences later.

  2. rugman11 says:

    I think restricting their research to the 2.5 years before a Wal-Mart moved in was a mistake. It’s entirely possible that Wal-Mart builds in areas where housing prices are on the rise, thinking that if they build in an increasingly popular and affluent area, they’ll see better sales than if they locate in an area with decreasing property values.

    Just look at the ABC article. Wal-Mart wants to build in an affluent area of town (avg. home prices $250,000-$400,000) while the homeowners want them to build elsewhere.

    It seems to me that by only looking 2.5 years back this study could be conflating the cause and effect of the situation.

    • matlock expressway says:

      Yeah, this study seems mostly a crock. I was always under the impression that Wal-Marts were built somewhat in the boonies (e.g., the outskirts of cities) so that shoppers would treat them like all-in-one stores. Or maybe it’s because land is far cheaper out there. Either way, an increase from nothing isn’t hard to accomplish.

      In related news, I once took a whiz on my buddy’s lawn after a long night of drinking. His house went up in value over 50% in the next few years. Coincidence? I think not.

      • OutPastPluto says:

        One likely possibility that this obvious bit of propaganda seems to be missing is the fact that Walmart is often not alone. It’s not the only thing being built. An entire area of commercially zoned real estate is being developed. It’s not just the Walmart that’s adding value to an area but everything else that may be getting built at the same time.

        It’s the restaurants. It’s the hobby stores. It’s the nail salons. It’s the used game store. It’s the fast food restaruants. It’s the coffee bars. It’s the barber shops. It’s the pet store. It’s the banks. It’s the cell phone stores. It’s the drug stores.

        • whogots is "not computer knowledgeable" says:


          When I was looking for a house in a mid-gentrification urban area, news of a nearby Wal-Mart was a disaster. I don’t know if it was good or bad for values, and I’m not convinced you could control for enough variables to find out. I’m just saying that it ended *my* interest in that neighborhood.

          Now I have a house about 5 miles beyond from the last thing you’d call “suburbs”. Target and Wal-Mart are moving in right along that dividing line. Not out in the middle of nowhere, but just outside the edge of town. That means that my house is closer to town than it was when I bought it, which is good news for me, even if I never set foot in Wal-Mart and don’t relish the traffic it’ll attract.

          • whogots is "not computer knowledgeable" says:

            Er, I guess I meant “news of a nearby Wal-Mart project”. I did not completely overlook a giant box store.

  3. homehome says:

    I can believe that, having a a major commerce store near you would be beneficial.

  4. buddyedgewood says:

    Does this mean my double-wide could be worth more than what I paid!?! Yaaahooo!

  5. AustinTXProgrammer says:

    I would expect that there would be some variation based on the value of the homes to begin with. And what about those homes closest (with 0.25 miles) if any?

    Being near major retail can be a huge bonus. Many people don’t want to drive 10 miles to get stuff, but they aren’t going to want retail traffic driving past a home that is 4 times the median state value either (started to say $750k home, but that won’t buy a nice house in some cities).

  6. Blueskylaw says:

    “Economists: Being Near A New Walmart Actually Increases Home Values”

    Well that certainly changes my mind, I’m going to petition Walmart to open a Supercenter near my house as soon as I finish posting to the other Consumerist articles.

  7. Loias supports harsher punishments against corporations says:

    causation /= correlation? Maybe Walmart did research on which areas were already likely to go up.

    Doesn’t Starbucks do this?

    • Torgonius wants an edit button says:

      Being located close to, but not on top of, commerce (Walmart, supermarket, mall) or a school are both things that tend to elevate the value of a home.

      My house growing up was about 1/2 mile between the major department store/grocery store stripmall in town, and 1/2 mile the other was was the school complex. You could walk to both with ease.

      All the homes between the two sold for about 10% more than other houses in town.

      My bet is that if this survey had used a different retailer’s name, most reaction would be “well, duh!”, but it’s WalMart, so queue the hate.

      • jeb says:

        “My bet is that if this survey had used a different retailer’s name, most reaction would be “well, duh!”, but it’s WalMart, so queue the hate.”


      • OutPastPluto says:

        The hate gets queued because this comes off as corporate corruption.

        A Walmart ad is masquerading as academic research.

  8. Marlin says:

    So a fluff “study” that really tells us nothing more than even those that put the “study” together know its not 100%.

  9. who? says:

    I’d like to see how the freakonomics guys would rip this study apart. Is there actually a cause and effect relationship between the construction of the Walmart and the property value change? What would have happened to property values if something else had been there instead?

    I suspect that Walmart chose the locations because they were growth areas where property values were going to go up anyway. Maybe the property values would have gone up even more if a Walmart hadn’t been built there….

  10. scoutermac says:

    Unless you are near the West 86th Street Walmart in Indianapolis.

    • gman863 says:

      West 86th was starting to decline when I was growing up in Indy in the late ’70s. I cringe to think of what it’s like now.

  11. Guppy06 says:

    Alternate headline: Walmart employees forced into longer commutes by rising home prices.

  12. Hartwig says:

    They are opening one of their smaller stores about a mile from my house and i am less than excited. I would like to know if this was over all home price levels or geared towards areas with lower income residents and lower home values who may actually get jobs from the new store. I can easily see in lower income areas a walmart increasing home values, but in higher income areas i doubt it.

  13. krom says:

    That’s because Walmart opens stores where residential growth is happening, because that makes financial sense. And where residential growth is happening, demand for houses is higher, so the price for houses floats higher.

    Correlation is not causation.

    • Costner says:

      The study claims to have excluded other factors – they didn’t just pick the low hanging fruit while yelling “voila”!

      Plus… an increase of a few percent isn’t all that significant, but it is the opposite of what many claim prior to a Walmart coming to town. A lot of people protest against a Walmart coming to their neighborhood because they claim it will actually reduce values… this study shows otherwise.

  14. SPOON - now with Forkin attitude says:

    I am not convinced that this is a cause. it may be a correlation.

  15. Buckus says:

    Between 2000 and 2006? I think you could have thrown a dart at the map and found that home prices went up in that time period for any retailer that opened a store.

  16. KyBash says:

    They should have skewed the numbers! There’s a lot more money to be made blasting Wal-Mart than there is in showing the truth.

    For those claiming that they build in areas of rising home prices — the current trend is always used as the baseline. That’s Research 101. This study shows prices went up those percentages more (or fell less) than they would have if a new store had not been built.

  17. maxamus2 says:

    Any study showing home price increases or decreases of 2 to 3% is meaningless.

  18. chiieddy says:

    Well, let’s home this proves true for my town. There’s got to be some advantage to having US 1 north of Boston running through your town.

  19. zandar says:

    if only that were the only economic factor to consider when it comes to walmart.

  20. Nowaxz says:

    That’s because soon those houses will be torn down to make way for a strip mall that offers a check-cashing store, a gold buyer shop, a pawn shop, and a pay-day loan shop.

    • Cor Aquilonis says:

      The dilapidated neighborhood quadra-fecta! The four horsemen of the house-pocalypse?

      Pro-tip: You can search Google maps for these establishments, then choose your housing based on where they aren’t. Also, you can find the good neighborhoods based on the presence of banks, private schools, specialty grocers, clothing boutiques and art dealers.

  21. soj4life says:

    Just one of those things that takes more than one study. Also most new walmarts are full fledged stores, so people have access to fresh veggies 24/7.

  22. frodolives35 says:

    How about in 15 years when the empty store causes the decline of prices.

  23. perilousp69 says:

    Just look at the authors of the “study.”