The Lakers recently beat the Boston Celtics to win their 5th basketball championship in 10 years. It is nice for the city of LA to see the Lakers win. But what I’m wondering is if winning championships help cities with price appreciation. For example, will the Los Angeles Lakers championship increase the demand for Los Angeles condos and houses, and ultimately increase the prices for homes?
Although there is little hard evidence to prove that championship teams do increase housing prices, their are some compelling reason to believe that it does improve the price values of homes in these areas. Let’s take a look at some anecdotal evidence.
First, if a team wins a championship, then the city gets more publicity than it will normally get. With more publicity, comes fame and probably more demand to live there. The fact that San Antonio has won 4 championships in the last 11 years has put them on the map nationally. People who have heard about San Antonio are probably more likely to live there just because they heard about it on TV. Take the Chicago Bulls. That team, along with that city became infamous because of Michael Jordan and all his NBA championships. This probably made it more appealing to live there; for the opportunity to see Michael Jordan, Scottie Pippen, and rest play, and win championships.
Every championship that is won only adds to the allure of the team, and the value of the franchise, among fans around the world. There will be a certain % of people who will want to live near their favorite sports team just because they are contending to win championships.
Second, championship teams bring in more money for the city. When a team wins consistently, then the demand to want to watch them brings in more tourists, and more jobs. These additional jobs add more money to local people’s pocket books, giving them opportunity to buy condos and houses in the area. All sorts of jobs and businesses, from waiting tables, to ticket selling, to hotels, to restaurants, to bars, all benefit because of tourist attraction that occurs from people driving and flying in to watch their favorite championship team play. All this incoming revenue most likely helps to create housing demand.
The hard evidence that exists for this premise can be seen in from the downtown Los Angeles condos market. The closer condos to Staples Center, where the Lakers play, are more expensive than condos further out in downtown. The Flower Street Lofts increase significantly more in value than many other lofts in LA this decade (2000-2010) just because they are across the street from Staples Center. The Ritz Carlton Residences are demanding a minimum of $800,000 to live there, in this economy, and over a $1500 HOA fee, just because it’s right next to staples center, where the Lakers play and win championships. Many wealthy people are buying there.
So as we can see, increase demand, increase income, and evidence in downtown Los Angeles suggests that winning championships does increase cause price appreciation.
