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Study: Property values increase in areas where Trader Joe's locates

In addition to triple ginger snaps, orange chicken and wild mushroom & black truffle flatbread, here's another reason to like Trader Joe's: It might drive up property values.

Both nationally and in the Tampa Bay area, homes near Trader Joe's markets have shown a greater increase in value from time of purchase than homes near the stores of rival chain Whole Foods, a new RealtyTrac study says.

Why in the world did RealtyTrac look into this?

Given that two of the most basic human needs are food and shelter, the online real estate data company thought it might be "enlightening" to run an analysis combining those elements as related to "two iconic grocery store chains with cult followings.''

Realtor Julia Brazier knows the cultlike appeal of Trader Joe's, a California-based chain that in February opened a store near her home in St. Petersburg's Old Northeast.

"My niece visited for three months from L.A., and she practically lived at Trader Joe's," Brazier says.

Brazier recently sold a house to a couple who were happy to be within walking distance of Trader Joe's at 2742 Fourth St. N. But another couple, from Texas, had their doubts while looking for a home.

"We spent a couple of days up and down Fourth Street, and the husband finally turned to me and said, 'Is Trader Joe's in a high-crime area? For three days in a row it's been surrounded by police.' I said, 'It's just opened — St. Pete gets excited about these things.' "

The RealtyTrac study found that homes in St. Petersburg's 33704 ZIP code — where Trader Joe's is located — had an average estimated value of $392,708, up nearly 56 percent from the time of purchase.

Among the neighborhoods in that ZIP code is Crescent Lake, whose proximity to downtown St. Petersburg and its plethora of restaurants, shops and museums has made it an increasingly desirable place to live.

Tampa Bay's only other Trader Joe's is on W Swann Avenue in South Tampa, also one of the area's hottest real estate markets. Homes in that store's 33609 ZIP code have increased in value by 15.7 percent to an average of $336,128.

By comparison, two of the Tampa Bay ZIP codes with Whole Foods stores have seen a decline in home values — down 18.4 percent in the 33624 Northdale area and down 4.45 percent in the 33607 ZIP in the Carver City area.

Only homes near the Whole Foods in Clearwater's Westfield Countryside mall have appreciated, RealtyTrac found. Their value has risen nearly 29 percent to an average of $180,908.

Steve Kirn, an expert on retailing, was surprised by the RealtyTrac findings, especially since Trader Joe's is less expensive than Whole Foods with its vast, emporiumlike stores.

Instead of homes appreciating in value because they are near Trader Joe's, he said, it's more likely Trader Joe's is going into "hot" areas where appreciation already is occurring.

"Trader Joe's, because it has a smaller footprint, tends to go into urban areas, which right now a lot of people, especially younger people, are moving into and driving up prices," said Kirn, executive director of the University of Florida Retail Center. "People are not willing to go into the distant suburbs and, generally, Whole Foods builds more in suburban areas than in downtown kinds of areas."

As for Brazier, the Realtor, she lives just a few minutes from Trader Joe's but has yet to set foot in the place.

"I'm busy," she said. "I've got my regular Publix and Fresh Market."

Times researcher Carolyn Edds contributed to this report. Contact Susan Taylor Martin at smartin@tampbay.com or (727) 893-8642. Follow @susanskate.

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