Original article was published by Shuke on Artificial Intelligence on Medium
The best Yelp businesses catalyze booming housing markets
We were curious to understand how the quality of surrounding businesses impacts housing prices of different neighborhoods in Vancouver (inspired by an HBS study that highlights how opening a Starbucks in an area drives housing prices up by 0.5% within a year). We utilized Yelp data on customer rating and business location coordinates to generate the following heat-map.
Within Vancouver, high-quality businesses are concentrated in Downtown, Kitsilano, central Kerrisdale, and along Kingsway. First, we take a look at how the geospatial heat-map of the business rating compares to the housing price heat-map. Immediately, we notice that the impact on housing prices of a business center radiates into its surrounding neighborhood. Yet, the business centers themselves seem to have a lower housing price. Why?
We think the following:
1) Higher quality businesses attract housing demand, and this high demand drives the housing price up.
2) However, because within the core business areas, housing transactions seem to be low, we suspect that residents are less willing to live in an area where businesses are very concentrated.
3) Another interpretation of this observation could be that since there are more businesses in the area, there are less residential housing that could be transacted in the area.
Ascend is uniquely positioned to use qualitative variables and indicators, alongside other traditional factors such as household income and vacancy, as powerful tools to generate insights for developers and brokers. We’re here to help you find better properties, faster. We’d love to speak with you at: firstname.lastname@example.org