Costco opened at Pabst Farms on August 7. Since then you may have seen headlines about the “Costco effect,” the idea that a new Costco lifts the value of the homes around it. Those headlines come from one study. Here’s what it found, and what it didn’t.
The short answer
A good sign for our area. Only time will tell.
On average, the study found no change in home values after a Costco opened. It did find gains in some kinds of areas, and ours looks similar to those. But a study of other towns can’t tell you what your home is worth.
What the study found
The research is by Silas Kwok, an honours student at the Vancouver School of Economics at the University of British Columbia. He looked at 84 Costco openings across the U.S. from 2002 to 2020. Using Zillow’s home value index, he compared ZIP codes near each new store with ZIP codes 20 to 25 miles away.
- No change
- On average. Home values within 20 miles of a new Costco did not change in a measurable way in the 2.5 years after it opened.
- 7.9%
- Higher, in more densely populated areas. Measured within 5 miles of the store, 2.5 years after opening.
- 5.2%
- Higher, in areas with above-average household income. Also within 5 miles, 2.5 years after opening.
Most headlines lead with the 7.9%. The study’s main finding is the first one: no change on average.
It’s also a student’s honours thesis, shared as a research poster. That doesn’t make it wrong. It does mean it’s one study, and worth reading with care.
Does Oconomowoc fit the areas that gained?
The gains showed up where population density or household income was above average. By U.S. Census Bureau figures, Waukesha County is above the national number on both:
- People per square mile (2020): 740.3 in Waukesha County, 93.8 nationally.
- Median household income (2020 to 2024): $106,076 in Waukesha County, $80,734 nationally.
So our area looks like the places where the study saw a gain. Two cautions. The study’s summary doesn’t say exactly where it drew its “above-average” line. And the gain was measured within five miles of the store. In a straight line from the store, five miles reaches downtown Oconomowoc, Summit, Delafield, Okauchee and Dousman. The north and west sides of Oconomowoc are a little farther out.
Getting to know the area? Take a look at our guide to living in Oconomowoc: parks, beaches, downtown and things to do.
Is Costco the cause, or a sign?
Costco picks its locations carefully. The study notes that it usually opens in suburbs where incomes are somewhat above the national average. So when home values rise near a new store, some of that may be growth that was already on its way.
Pabst Farms has been growing for years. Costco is one more sign of it.
What about living right next to it?
The study didn’t look at homes right next door. A big store does bring traffic, lights and delivery trucks. The author also notes that downsides of the spots where Costco builds may be part of why the average came out flat.
A short drive to Costco is a convenience. Living beside any large store is a different thing, and buyers weigh both.
What I’m hearing around town
Everyone I’ve talked to is excited about the new Costco. It’s a great store with great products.
The main talk around town, though, is the afternoon traffic jams we have now. That’s going to take some getting used to. Oconomowoc isn’t the quiet little town it used to be, but it’s still an absolutely fantastic place to live.
What really sets your home’s value
What a buyer will pay for your home comes down to what similar homes near you actually sold for, the condition of your home, and how it’s priced and marketed. A new store nearby is one small piece of that, and no one can put an honest number on it yet. Costco has been open three months. The study measured 2.5 years out.
If you’re curious what your home is worth today, I’m happy to look at the recent sales around you and tell you honestly what I think your home would sell for. No pressure. No obligation.
Or call or text me at 262-617-2725.
Want to see the numbers yourself? Here’s our latest Oconomowoc market report: what homes are listed for, what they’re selling for, and how fast.
Quick questions
When did the Oconomowoc Costco open?
August 7, 2026, at 1855 Kirkland Way in Pabst Farms, according to Costco.
Will my home be worth 7.9% more by 2029?
No one can promise that. The 7.9% is an average from other parts of the country, in more densely populated areas, within five miles of a new store. The same study found no change on average.
Should I wait to sell until the “Costco effect” shows up?
I wouldn’t plan a sale around one study. The right time to sell depends on your own plans and on what homes like yours are selling for now. I’m glad to talk it through with you.
Sources
- Silas Kwok, “Do Costco Openings Increase Nearby Property Values? Evidence from the U.S.” Honours thesis poster, Vancouver School of Economics, University of British Columbia. Poster (PDF).
- Costco Wholesale, Oconomowoc warehouse page, for the address and opening date.
- U.S. Census Bureau QuickFacts: Waukesha County, Wisconsin and United States.