To discover promising new neighborhoods, Realtor.com’s Alina Dizik says builders should look for the construction of new museums or art districts. This type of addition not only revitalizes downtown areas in cities, but they have also been known to improve real estate, due to buyers being drawn to buildings with bold architecture, rotating exhibits, and attractive common areas. Museums also create a chain effect and attract corporate employers and tourists, which heightens the neighborhood’s restaurant and entertainment scenes.
The phenomenon is what’s now called the Bilbao effect—named after Guggenheim museum in Bilbao, Spain, which opened in 1997 and was a catalyst for the revitalization of the Basque town.
“Museum developments enhance neighborhoods and boost the value of real estate nearby,” says Stephen Sheppard, an economics professor at Williams College in Massachusetts who studies the impact of new museums on nearby real estate. According to his research, property values of homes near museums rise between 20% and 50% over the course of five years to create “vibrant communities.”Read More