How did Costco’s relocation affect nearby home prices? Fresno State business faculty share research

Jauregui and colleagues Dr. Mo Fallah and Dr. Jacquelin Curry from the Department of Finance, Real Estate and Business Law at Fresno State, presented their findings in “O Costco, Where Art Thou Going?”, which appeared in the Journal of Real Estate Practice and Education.

The researchers measured the economic impact of the Costco relocation by analyzing over 64,000 residential transactions within a two-mile radius of the old and new locations from 2014 to 2024, covering five years before the move and five years after. As a control, they compared the treatment areas with a control area centered on the Fresno Costco on Blackstone Avenue, where the presence of Costco was constant.

“The methodology we use is called a difference-in-difference analysis,” Jauregui said. “This is equivalent to what pharmaceutical companies do when analyzing the impacts of a new drug, comparing people who have received the drug to people who receive a placebo. The new and old Costco locations in Clovis were the treatment areas, and the Fresno location was the control area.

The researchers found the departure of a big-box store had a greater impact than its arrival. At the former Costco location, house prices increased by 8% to 9% after the move. The research team said this price increase at the old location may have been caused by the removal of traffic, noise, congestion and other effects of major retail activity.

On the other hand, there were only slight house price increases at the new Costco location,but the increases were not consistent with any one cause and could not be attributed to the presence of Costco.

“We did find a positive impact, but spatially it was not evenly distributed,” Jauregui said. “We didn't find that property prices went up everywhere in the treatment area. We found that some parts of our treatment areas had an impact, and other parts didn't have it. That was kind of surprising.”

“I definitely expected there to be some strong results, and to have it not be statistically significant at all around the new Costco was surprising to me,” Curry said. “There’s a difference between expectations and what the research shows, and that’s why research is so important.”

The researchers also found the slight house price changes that occurred at the new Costco site happened in response to the public learning new information about the relocation.

“I mostly do finance research, where it’s established that as news comes out, people react,” Fallah said. “In real estate markets, you would think it happens slower, but here we saw that as there were announcements or local news coverage, there was an impact on house prices. I think that’s very interesting to see.”

The faculty said their research focused on one location, so their findings may not be generalizable to other business relocations.

“This is very relevant to the Clovis metro area,” Jauregui said. “It may not necessarily be the same impact in other cities. But what it tells you is that real estate matters and people matter. People made choices to buy or sell their house and where they’re going to live. They’re the ones who ultimately drive house prices up or down.”