Microbrews Help Homes Gain Macro Value in Philadelphia
We’re living in the middle of a golden age of food and drink, especially in Philadelphia. Here in the City of Brotherly Love, we enjoy close access to some of the world’s best and most diverse restaurants, bars and breweries. Yet one industry in particular shines and thrives in Philly: microbreweries and craft brewpubs.
While Americans typically do not prefer to live within walking distance of bars and liquor stores, the opposite is true of craft breweries. Recent data suggests we love to live near them, and our hearts agree. We love microbreweries for lots of reasons, but mostly because they are locally owned, make a high-quality product, and often provide great spaces in which to relax and unwind.
These features can make a significant impact in a neighborhood, and property values rise accordingly, as the best realtors near Philadelphia and other markets nationwide are discovering.
Here in Philadelphia, the closest homes to microbrews—like Fishtown’s Evil Genius and Old City’s 2nd Story Brewing, to name just two of our favorites—are showing a pattern of higher property value than their respective neighborhood medians. In some cases, houses within walking distance of a small brewery enjoy spikes in value as high as 10 percent above other nearby homes.
How did the craft beer explosion happen in America, and what can we say about its relationship with residential and commercial property values? Let’s examine the history of the craft beer movement in the U.S., and learn about how they’re helping to raise property values in Philadelphia and beyond.
A Brief History of Microbreweries
Anchor Brewing Co., where Fritz Maytag pioneered the craft brewing movement in America. Photo via Flickr/David Oliver
Brush past roughly the first 6,700 years of beer’s existence and you’ll land around the time of early immigrants beginning to settle in America—and bringing their beer along. During this era, quality brewing thrived throughout the eastern and midwestern U.S. And as cities grew, so did the culture of beer production. Then, prohibition halted everything for over a decade. After prohibition ended, American brewers were left to start from scratch.
For a good while post-prohibition, beer produced in the U.S. was pretty Busch League. It was made on a macro scale with low-quality ingredients, like many other commodities of that era. We came to accept that beer was simply a poor quality, lite canned product, and we didn’t know it could be something so much more.
Fortunately, that all changed beginning in the 60s with several releases of high quality beers from what would become the pioneers of a revolution. Slowly and steadily, Americans began to rediscover great, interesting beer, and they wanted more.
In 1979, home brewing was federally legalized, allowing DIY enthusiasts to begin tinkering with, and perfecting, recipes for exceptional products—an important catalyst in the craft beer revolution. Many of those early homebrewers went on to found proper breweries, and the industry saw exponential expansion over the next decade. In the mid-90s, another milestone for the movement occurred when Sam Adams went public, proving that big dollars were present in smaller scale operations. The people demanded good beer, and the market exploded to supply them.
It’s no surprise that Philadelphia’s beer making history is centered in the Brewerytown neighborhood, where nine prominent breweries made their headquarters at the end of the 19th century. That may sound like a lot, but consider this: The rest of the city housed over 700 breweries altogether at that time. It seems like Philadelphia as a whole should have been called Brewerytown.
Unfortunately, while the rest of the city didn’t see urban decline until later in the 20th century, Brewerytown got a head start during the prohibition era of the 1920s, and did not manage to recover directly post-prohibition. By then, the brewing industry had become dominant in the midwest, and by the mid-1980s, there were no brewers operating in Philadelphia (3).
Now over 30 years later, the breweries are back, with at least 25 in existence within Philadelphia’s borders, and many more throughout southeastern Pennsylvania (4). Best of all, they’re impacting their neighborhoods for the better in big ways.
Today’s Residential Impact
A modern American craft brewery. Photo via Flickr/Bill Dickinson
40 years ago there were 89 breweries in the U.S (5). Today, almost 80 percent of American adults over the age of 21 live within 10 miles of a brewery (6). It’s no surprise that demand of that magnitude is directly impacting the property values of the homes closest to those breweries, as recent data indicates.
Researchers at the University of Toledo and the University of North Carolina at Charlotte examined the correlation between craft breweries and overall revitalization in Charlotte, NC, and the results indicate a significant impact. For example, when a brewery opened in Charlotte, the homes within a half mile increased in value by close to 10 percent (7).
This is pattern is also true of cities across the nation, including Philadelphia.
We don’t have a formal study for Philly, but in the wake of the release of Charlotte’s data, some local outlets have conducted informal research of their own. According to CBS 3 Philly, the median home values in Fishtown is around $359,000, but the houses closest to Evil Genius are selling for around $515,000. Similar disparities are present in other neighborhoods across Philadelphia.
Yards Brewing Co. has based itself in two developing Philadelphia neighborhoods—Fishtown and Northern Liberties—throughout its existence and growth. Photo via Michael Truehart
Homeowners aren’t the only ones reaping the benefits of the microbrewery boom. While the beer market overall is projecting a value of over $650 million within the next decade, craft breweries are already responsible for contributing over $50 billion annually to the U.S. economy. They’re also responsible for significant job creation, employing over 400,000 workers who are spending their income around the breweries that employ them (8).
The popularity of craft breweries also means a lot of patrons are drawn to their locations, which tend to be in neighborhoods in the midst of revitalization. It’s a bit of a chicken and egg situation, but breweries are moving into promising, yet not fully-revitalized neighborhoods that offer them affordable vacant spaces. In turn, when a popular brewery opens up in a neighborhood, it tends to play a significant role in helping to boost that neighborhood’s overall allure—a major plus for commercial property owners in those areas. In other words, breweries aren’t solely responsible for neighborhood revitalization, but their existence acts as a promising sign of growth.
Post-industrial neighborhoods like Fishtown and Brewerytown are ideal for microbreweries because for a relatively affordable price, they offer the space and infrastructure needed to set up shop. Now, instead of sitting unoccupied, old industrial spaces are being repurposed into craft breweries, helping to bring their property values back to life.
While we probably won’t change Philly’s motto to the City of Brewerly Love anytime soon, the industry is undeniably doing its part to help property values grow here, and whether or not you’re a microbrew connoisseur, it’s lucrative to own property near a craft brewery. If you’re interested in capitalizing on the craft brewery market, you’ll want to work with a top real estate agent in Philadelphia. Touch base today to get started.