Do stellar Yelp reviews buoy home prices?
NEW YORK – June 16, 2017 – A good Yelp restaurant review can be a boon to that eatery's business, and a new study finds that it can also be a boon to nearby home values, too.
Researchers used Washington, D.C., to test their theory into restaurant quality and impact on property values. They found the number of highly rated restaurants, measured by Yelp reviews, within a one-mile radius of a home was associated with an 11.5 percent increase in the home's value, according to the study appearing in the Journal of Urban Economics.
Restaurants that provide good value by being less expensive and highly rated were the only type of restaurant associated with higher home values, according to the study. Further, researchers discovered the link between restaurant quality and home values has only appeared since Yelp became popular in the Washington, D.C., area in 2008. Before that, researchers found no significant relationship to restaurant reviews and home values.
"Prior to Yelp, people had imperfect information about a restaurant's quality, making it difficult for sellers and buyers of homes to incorporate the value of proximity to high quality restaurants into home prices," Forbes.com columnist Adam Millsap reports on the study's findings. "After Yelp made this information accessible, it was capitalized into the value of the home."
Source: "Housing Prices Are Rising and Technology Is Contributing," Forbes.com (May 25, 2017)
© Copyright 2017 INFORMATION INC., Bethesda, MD (301) 215-4688