Mighty Bargain Hunter has a new money site, called Cash Commons. It’s pretty interesting: readers ask questions, others answer them, and people earn “reputation points” whose value is unclear but which make for a fun gimmick.
One of the questions, “Is having a Walmart hundreds of feet from a property a good or a bad idea,” led me to draft a response that was way too long for the site, which apparently is designed for the short & the quick. The more I thought about it, the more my response began to look like a whole new post. So I decided to cut it short there and hold forth at greater length here at FaM.
There’s a Walmart within walking distance (more or less) of the house M’hijito and I co-own in mid-town Phoenix. His neighborhood is on the low side of middling; it’s one of the few in-town areas that have been seriously thumped by the recession—in general the worst-affected districts are outlying suburbs. The main source of the property devaluation in that specific residential area, sandwiched between a slum and a very upscale district, has not been the nearby mall—also the scene of a Costco and a Target—but the many foreclosures that have driven down comparables.
The shopping center, which is extremely busy, has a correspondingly high rate of car break-ins, thefts, and robberies. So, when you look at one of those online maps of crime rates, it appears that the entire area has a high crime rate, even though the neighborhood to the east of it, where the pretty little house resides, is relatively safe. This factor undoubtedly will influence some potential buyers.
The area just to the south of it, on the other hand, consists of run-down apartments and is the scene of almost nightly cop helicopter fly-overs. A few years ago, a friend of mine, who lived in one of those dumps, was murdered in the parking lot by some guys who were trying to steal his car. The low-rent apartments were there before the WalMart went in and probably were neither created nor worsened by the nearby commerce.
The City has built a light-rail line that passes about a half-mile from the house and has a terminal in that Walmart shopping center. This has turned a substantial part of the mall’s parking into a park-‘n’-ride for those who are brave enough to leave their cars there. We are told that light-rail is supposed to increase property values in bordering neighborhoods. So far we haven’t seen that happen in the area; this could be attributable either to the scruffy shopping mall and tenement district or to the deprecession.
On a slightly tangential note, friends owned a house that backed onto a Fry’s Supermarket. In our area, Fry’s caters to a downscale crowd, and in this case that was true with a vengeance. The Fry’s and the shopping center owners were particularly insouciant about the neighboring residences. They arranged for garbage to be collected (illegally) in the wee hours of the morning (commercial garbage collection sounds like a wrecking yard—SDXB and I lived several blocks away and could not leave a window open on a nice night without being awakened by the racket) and allowed homeless mentally ill to camp in the parking lot and throw trash, garbage, and human waste over the neighbors’ walls.
At the top of the bubble, the couple arranged to have a new house built. Lacking a crystal ball, they decided to stay in their existing home while construction proceeded, rather than selling right away and squatting in a rental until the new house was ready. We know what happened next. After the market crashed, they couldn’t even give away the old house. No one in their right mind would buy a house—or rent!—behind a Fry’s, not when far more desirable property could be had for a song. After several years of struggling to sell it or to keep it rented, they finally defaulted.
The bank hasn’t been able to unload it, either.
Extrapolating from that, I’d advise that the instant you get wind of a new Walmart or any other large commercial retail about to go in near your home, sell!
Image: Phoenix Police Department Uniform Crime Reports, Monthly Maps, Property Crimes