The hidden housing danger brewing on America’s main streets: ‘Your home’s value will fall’
Your daily $6 latte may be a small price to pay to keep your home value high.
As consumers change how and where they spend, America’s main streets are losing the chain stores that once defined them.
The closures don’t just hurt retail - they can drag down housing prices, too.
It’s a vicious circle: when familiar stores close, it creates a perception of decline that pushes down home values - and as prices fall, fewer new businesses move in, triggering even deeper drops in property values.
Big brands like Target, Starbucks, Dunkin’, Macy’s and Rite Aid were long seen as reliable anchors of a healthy neighborhood.
Now, hundreds of those stores are closing, leaving empty units and nervous homeowners behind.
'Data shows chain stores, specifically quick service restaurant concepts like Starbucks and Dunkin, are retail anchors in neighborhoods,' Hitha Herzog, Chief Research Officer at H Squared Research, told the Daily Mail.
Now that all of these chains are seeing mass closures across the United States, what signals will Americans look for to guide them to the nicest neighborhoods?
Your daily $6 latte may be a small price to pay to keep your home value high. Shops that once made up the ideal American main street are rapidly closing, and while this is a bad sign for the economy as a whole, it's even worse for the housing market
Starbucks just closed 400 locations in September, and neighborhoods that took those losses will likely see the impact in housing prices
'Whether the neighborhood is located in a rural, suburban or urban location, shutting down quick service restaurants devalues the real estate in the surrounding area,' Herzog continued.
Starbucks in particular is the marker of a good area. The coffeehouse carries with it a lifestyle that homeowners want to achieve.
With $6 lattes, warm and inviting decor, and friendly service, Starbucks screams upmarket — and so do towns that feature the Seattle-based cafe.
Starbucks just closed 400 locations in September, and neighborhoods that took those losses will likely see the impact in housing prices.
This is because of the 'Starbucks effect' — the phenomenon where the coffee chain's presence is associated with rising property values and a perception of neighborhood affluence.
A Zillow study found that homes within a quarter-mile of a Starbucks appreciated far faster than those farther away — jumping 96 percent to $269,000 over 17 years, compared to a 65 percent rise to $168,000 for the average U.S. home — suggesting the coffee giant tends to move into neighborhoods on the rise.
Dunkin' does not have the same high-class vibe as Starbucks (and prices reflect that), but just the brand recognition means that having a location near your house could be driving the value up.
It's unclear how many Dunkin' locations have closed recently, but the coffee chain closed a staggering 800 locations in 2020, further contributing to the emptying of retail spaces.
Dunkin' does not have the same high-class vibe as Starbucks (and prices reflect that), but just the brand recognition means that having a location near your house could be driving the value up
Dunkin' closed a staggering 800 locations in 2020, further contributing to the emptying of retail spaces (Sabrina Carpenter is pictured in a Dunkin' advertisement)
Macy's — once considered a high-end department store — was certainly a signifier of a nice neighborhood in its heyday.
However the chain has been shutting down many of its stores for years, pulling yet another classic American chain from high streets across the country.
Macy's announced in mid-2024 that it would close 150 locations in a span of two years, but that timeline seems to have changed. Initial plans called for closing 50 stores by the end of January 2025. Now, that number has now been jumped up to 65.
For many of these big chains, proximity is an important factor. People don't need — or want — to live within walking distance of a Rite Aid (which has now closed down every location), but knowing that there's a major pharmacy a short journey away is an important factor to consider when purchasing a home.
'When a big-name chain shuts its doors, it can shake people’s confidence in a neighborhood. Not because the fundamentals change overnight, but because perception does,' Todd Drowlette told the Daily Mail.
'Familiar brands act like a shorthand for stability. When they leave, it signals uncertainty and that can make buyers hesitate. Still, one closure isn’t a crisis. It’s when you start to see several large retailers pull back that the psychology of demand starts to shift.'
If all of these chains start disappearing from the same neighborhoods, it signals to other companies, at least of a similar clientele, that they should not invest in the area either.
This demise in recognizable retail would lead to a lower demand in real estate and drive home values down.
Macy's — once considered a high-end department store — was certainly a signifier of a nice neighborhood in its heyday
Macy's announced in mid-2024 that it would close 150 locations in a span of two years
Todd Drowlette, a real estate expert who once served as the youngest exclusive broker for Starbucks
While data has shown that major chains like Starbucks, Whole Foods, and Target are enticing factors for house hunters, some real estate experts think buyers might now be more attracted to small local businesses.
After the pandemic sparked the beginning of the mass closures of big chains, there was what economists described as 'The Great Reset'.
The term was coined by the World Economic Forum to describe how economies and societies could build back with a more community-focused approach.
New Jersey-based real estate broker Steph Mahon told Realtor.com that people aren't just looking for homes nowadays, they are shopping for the perfect neighborhood.
Mahon thinks that notion of an ideal neighborhood is increasingly defined by a well-curated downtown with local coffee shops, mom and pop restaurants, independent grocers, and one-off boutiques.
'There's a strong "support local" mindset in many of these communities,' Mahon said. 'People are drawn to towns with personality. That energy comes from small businesses that are truly connected to the neighborhood.'
'In my experience working in the North Shore, Chicago, and greater Chicagoland markets, buyers are absolutely drawn to neighborhoods with strong local business communities,' Chicago realtor Jason Mere told the Daily Mail. 'Independent shops, coffee houses, and restaurants add authenticity and character that make an area feel alive.'
The arrival of a Starbucks - likely in a strip mall, as in the photo - can have an outsized impact on a neighborhood because it may be the only major coffee shop or gathering spot in the area
Brian Niccol (pictured), Starbucks' top boss and Chipotle's former leader, is trying to turn around the chain's struggles
'Chains do bring convenience and familiarity, and some buyers like that reliability. But when those big names close, they often leave a void,' Mere said.
'Chains may come and go, but independent businesses create the kind of resilience and vibrancy that make people want to stay.'
Herzog weighed in: 'While small businesses and shopping at small businesses are certainly getting attention and traffic, the numbers show communities tend to do the majority of their purchasing from larger chain stores.
She continued, 'Larger brands carry trust, reliability for products being in stock as well as limited sensitivity to price fluctuations due to macroeconomic headwinds.'
