Surprise: New Walmart Stores Boost Nearby Home Values

A new study refutes the commonly held view that opening a Walmart store lowers the value of nearby properties — instead, it actually raises home values.

In a research paper by Devin G. Pope of the University of Chicago and Jaren C. Pope of Brigham Young University, the authors state: “Walmart often faces strong local opposition when trying to build a new store. Opponents often claim that Walmart lowers nearby housing prices.

“In this study we use over one million housing transactions located near 159 Walmarts that opened between 2000 and 2006 to test if the opening of a Walmart does indeed lower housing prices.”

The researchers found that a new Walmart store increases housing prices by between 2 and 3 percent for homes located within half a mile of the store.

They also found that the values of houses located between half a mile and one mile from the store rise 1 to 2 percent.

The increase in values was even more pronounced for those 86 cases in which the new store was a Walmart Supercenter.

The researchers stressed that through a number of statistical tests they were able to conclude that the data support a casual interpretation — that is, the opening of the Walmart store directly led to the rise in housing values.

Walmart currently operates more than 4,400 retail facilities in the United States alone, and employs almost 1.4 million people. Surveys indicate that 84 percent of American households shop at Walmart in a given year, and 42 percent report they are regular Walmart shoppers.

“The benefits to quick and easy access to the lower retail prices offered by Walmart” and to the stores that “naturally agglomerate nearby,” the authors conclude, “appear to matter more to households than any increase in crime, traffic and congestion, noise and light pollution, or other negative externalities that would be capitalized into housing prices.

“This result is useful to policymakers that consider passing zoning regulations and other laws that could affect Walmart’s ability to build new stores within their jurisdiction.”