Living near a Costco may increase your home value but it depends on where you live

Few brands have the kind of legendary devotion that Costco has cultivated over the past few decades.Shoppers love the bulk deals, the store’s Kirkland Signature products, and the cheap hot dogs—which is why any given Costco parking lot is likely to look like a zoo whenever you visit, especially in this economy. A Costco run can be good for your wallet, if you like buying honey by the bucket or gumballs by the hundreds.

But the benefits may go beyond that: According to research from the Vancouver School of Economics, Costco openings can have an impact on nearby property values, especially in already densely populated areas. That’s some great potential upside for homeowners and potential buyers.Just keep in mind that living close to any high-traffic amenity comes with its own trade-offs, such as more cars, more noise, and more foot traffic on the weekends.In the abstract, living within a short driving distance of Costco is a good thing.

But can you put a number on it?Silas Kwok at the Vancouver School of Economics conducted research on this question.It turns out that the overall impact of living near a Costco is negligible.In looking at Costco openings from 2002 to 2020 across the US, the research showed that the openings “caused no significant changes in property values on average.” That said, there were certain parts of the country where Kwok finds Costco did drive values—namely, in high-density and high-income areas. “Costco openings caused a 7.9% increase in property values within five miles in counties with above-average population density, and a 5.2% increase within five miles in counties with above-average household income 2.5 years following store openings,” writes Kwok.Consider a Costco opening in a dense, high-income area like Brooklyn, NY, versus one in a lower-density, lower-income market like Birmingham, AL.

The research suggests the first is more likely to see a bump in nearby property values than the second.There are a few possibl...