In the past few years, house hunters and real estate investors used the presence of retail chains as a barometer of a neighborhood’s relative value. Growth-oriented chains like Starbucks and Home Depot do significant amounts of economic and demographic research before moving to new locations. So their decision to locate a store in a given city or town is a big vote of confidence in the area’s economy.
Many buyers–with considerably less money and time to research–figured it made sense to follow the same strategy as the Big Guys. So they trailed behind in their SUVs, boosting property values in any neighborhood within striking distance of a Starbucks or Home Depot.
None of them realized the fascination with do-it-yourself projects and mocha lattes would eventually end. And when it did, housing prices would drop, gas prices would climb, unemployment would increase and all those retailers they followed religiously ftom one location to another would switch from expansion to retraction.
It happened this year. Startbucks is closing 600 stores–8 percent of its 7,257 company-operated US stores and 5 percent of its total 11,434 US stores. Home Depot is closing 15 stores and scuttling earlier plans to open 50 others.
The bottom line: Trying to capitalize on the site anaytics of retail chains, however technically sophisticated, is like trying to use market timing to make a killing in stocks. Location is everything, but how can you be everything to everyone?
- My childhood home was next to a cemetery. I loved it. It was quiet–and no one complained in the winter when I used the steep slopes for sled riding. It was only years later that I learned the location was, by any standard, a liability.
- The best location I ever lived was in an apartment with a stunning view, overlooking the city of Pittsburgh on an edge of Mount Washington. It was magnificient, and I agonized over ways to buy the unit. But I couldn’t afford it. I regreted that for years…until half the building slipped down the hillside, thanks to a slowly leaking underground water main.
- My house in suburban Detroit was in a great location. Or so I was told. None of the potential buyers seemed to think so when it came time to sell it.
Location is an anomaly, no more likely to be understood by technology than it was by the whims of generations of buyers. So where what’s the right place to buy property? Don’t ask me. I can’t think clearly without caffiene and I’ll spend too much on gas driving to the nearest Starbucks.