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Last updated: April 5, 2022 • Real Estate Investing

Does Retail Development Affect Your Property’s Value

Will an upcoming retail development project increase or decrease your home’s value? Homeowners oftentimes fear that new development in their area will decrease their property value, based on the belief that popular large-chain retailers can bring property value down once they are built near a residential area. We’ve debunked that myth and found that across the country, new developments in a community increase property values within it.

A home’s proximity to a retail store is often taken into account when home buyers are purchasing a home. If a home is closer to a retail store, homebuyers may find this more attractive because the location of the home would allow them less of a commute to shopping. From this standpoint, retail development actually tends to increase property value by a certain percentage. Retail stores can even revitalize an old neighborhood with already decreasing property value. This is because new retail stores can create jobs for community residents. This will, subsequently, bring more money into the community because area residents are supplied with more jobs. The local real estate agents in Boynton Beach FL will all tell you that jobs and developments are just as important as proximity to the sea and natural beauty to the property price.

Adversely, retail developments can bring traffic to a previously quiet or rural area. This hassle may cause residents to move away because of the new bustling community and their preference for a more relaxed environment. A retail development may also cause potential home buyers to rethink their neighborhood choice, but this usually doesn’t have a substantial enough effect to hinder property value as potential homeowners will oftentimes be attracted to the new community retail shops.

Life in a Developing Neighborhood

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While the neighborhood you live in is constantly changing, how it changes makes a difference. These changes often affect the property values in the area and can also impact your home’s price. Whether or not you are planning to relocate to a new area, the value of your property matters. After all the money, time and emotions you invested in your home and community, the last thing you want to know is that your investment won’t pay off. 

There is a multitude of factors that can impact property values, but the overall assumption is that retail development isn’t one to have a negative impact on them. However, it can depend on the type of commercial property and the area where it is developed. The size occupied by this development and the number of foot traffic generated by it can also influence prices. But let’s take a look at these in particular.

Foot and Car Traffic

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Most residents in a community get worried when commercial developers purchase vacant or already built properties. With new retail developments around their homes, the potential for increased traffic unsettles them. Depending on the type of retail development, there is a risk that vehicle traffic will spike, increasing noise pollution in a previously quiet area. Constant traffic can demotivate buyers to look at a neighborhood, and some retail developments can have that effect. 

New developments don’t only bring more traffic, but they also bring more people. This can increase the area’s economic health with young professionals moving in and revitalizing a neighborhood. This might mean that new parents might be less interested in the area. Still, the area will go through a rejuvenation process with younger generations being attracted to the blossoming job market. But even for young families, knowing that there’s a convenience store, a pharmacy, or salon nearby might be incentivizing enough just for the benefits that come with increased proximity to such shops. Commercial properties that cater to the community’s needs will certainly boost property values despite foot or car traffic, but improving transportation infrastructure can solve that issue.

Alternative Transportation

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The Live, Work, Play, concept is becoming increasingly more used by municipalities. Just take Alpharetta, GA as an example. More and more communities are attracted to this new kind of neighborhood that caters to all its residents’ needs and public transport is such a big part of that. We refer to busses, trams, and metros and to bicycles lanes and increased walkability of the area’s streets as well. Add to this a transportation center that can connect it to different areas of the city and the county or country, and property prices will climb. In areas where residents aren’t constrained to use their cars for the shortest of distances, the demand and interest for properties will grow, leading to prices appreciating.

A municipality is also responsible for considering how new development will impact the residents’ quality of life in that area. Providing a growing community with access to public transportation or alternative options is sure to impact property prices as well positively.

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Cultural Impact

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Developments of commercial properties can improve an area’s appeal by polishing it in new colors or giving it a new outfit. Living in close proximity to a mall, entertainment center, restaurants, bars, cafes, and clubs may bring with it a change in the area’s demographics. These factors can attract residents who are willing to spend a bigger budget on properties close to those amenities. Still, residential property prices will only benefit from this. 

We have to keep in mind that the nature of retail development can change things. Certain attractions cater to wealthier, more subdued clientele, while others draw a somewhat less savory crowd. These commercial properties have a way of influencing the area’s ambiance and unique cultural scene. Because of that, they will attract the type of residents or visitors that enjoy those activities. Depending on these activities and the cultural scene developed by these retail developments, the property value of the residential properties may either go up or down.

What to Expect

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If there are rumors of retail development in the area where you live, the best thing you can do is try to figure out what type of industry it will activate in. Property prices can go down if the new development produces unpleasant smells, constant noise, or unpleasant sights like factories or warehouses. However, other types of developments increase an area’s appeal. Who doesn’t want to live close to a theater, restaurant, coffee shop, or anything else that enriches the community’s cultural scene? If you can find out in advance, make a decision regarding your property based on that information.

However, the first impact of the new retail development, regardless of the type of industry it serves, will be to drop the residential properties’ values. That part is easy to explain. 

New retail developments bring about infrastructure changes. That doesn’t only mean that there will be a new building in the area, but everything that comes along with the construction and development of services to supply the new development’s needs. That means you’ll have to deal with a lot of noise, road detours, blocked views, exhaust fumes, and an unpleasant environment to live in until the development is built. People aren’t as interested in moving to an area where a lot of construction takes place, so try not to sell during that stage. 

Still, if the development is one of the following, you might think about your options. Strip clubs, power plants, gun ranges, hospitals, funeral homes, homeless shelters, and cemeteries are likely to lower a home’s value. These developments do not promote a friendly environment for families or young professionals and don’t work to develop a community’s cultural scene. People don’t look at these places and long to walk in. They usually want to keep away from these, even hospitals, as we go to hospitals when we are in pain, not when we are happy. These facilities also create noise and air pollution, or an overall dreadful feeling in the pit of your stomach.


New retail developments are nerve-racking for the residents of the area. However, as long as they hunker down during the construction period, they will be able to cash some extra dollars on their return-on-investment when they decide to move. New retail development (with the exceptions mentioned above) positively impacts the residential property values of the surrounding homes. In the long term, with more development that’s responding to the community’s needs, housing prices will grow exponentially with the strength of the area’s economy. They bring businesses and create jobs and other opportunities for the community. It would be difficult for them not to be profitable from the home seller’s perspective. You can talk things through with a professional in your area by finding a real estate agent near you on our directory. It’s easy to figure out this whole thing when you talk with someone who deals with similar situations frequently. Follow The Official Real Estate Agent Directory blog and for more advice from experts on how to increase your property’s value. In the comment section below, let us know what your thoughts are about retail developments in residential areas. Like & Share this article with those living in up-and-coming neighborhoods. New developments aren’t a bad thing for the community. They actually work to help a community grow and develop a more reflective culture.


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