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Still, the association between home values and quality education can be a boon to those living in a neighborhood with an in-demand public school. As data continues to be published about school performance nationwide, the expectation is that the trend with continue, and even increase, on a district, state and national level. Know that real estate agents cannot comment on the perceived quality or differences of schools and neighborhoods, because they will be violating equal treatment and anti-discrimination laws. So, do not expect your real estate agent to be candid about how the school can negatively impact both your home’s value and the quality of life in the neighborhood. Outside the property lines, location plays a crucial role in your home value. If you’re living in a large city, you’re likely in a highly desirable market, and your home will be worth more than if it’s in a sparsely populated area.
On the one hand, it is possible to argue that good schools are responsible for increased property values. In 2013 The National Association of Realtors surveyed home buyers and found 22 percent of them listed a home’s proximity to the school as part of their buying decision. This video explains how owning a house close to schools has an impact on real estate values. Although the size and price of a home are always key considerations, when considering the home’s future value, the quality of the school district may sometimes trump all else.
Con: Increased traffic
A more recent study by the Brookings Institution found that housing costs tend to be higher in areas where high-scoring schools are located. The study, which looked at the 100 largest metro areas in the country, found an average difference of $205,000 in home prices between houses near high-performing and low-performing schools. Homes around high-performing schools also tended to be larger, with 1.5 more rooms than homes near low-performing institutions.
Not all home buyers have children or even plan to have children, making these figures even more interesting. People are not just interested in the quality of school districts for the educational opportunities they provide; they consider school quality as part of the overall value of the real estate. While the findings of this national study are compelling, they do not paint a full picture of the link between school spending and home values. According to the website, some school districts may operate more efficiently, so while expenditures are lower, the quality of education is still high.
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But while this fact has always been somewhat of a given in the real estate industry, recent statistics now demonstrate just how much of an impact school quality has on real estate. If you look into why a school earns an A or an F grade, you can see how property taxes would play a role in their performance and determine the quality of education a district can offer. Their three-bedroom home is roughly a half-mile from Seminole County, which also has highly ranked schools as well as higher property taxes. When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.
To further demonstrate this, we can look at research done by Ken Corsini. Corsini discusses a research project he did on housing values in Metro Atlanta. His research showed that school performance in a neighborhood substantially affected the value of homes in that neighborhood. While it may seem like the obvious answer is to choose a home in a high-rated school district, the truth is not that cut and dried.
Pro: Schools are typically located in safe neighborhoods
Hopefully this will change over time, but for now, racial disparities are affecting your property value. As a prime example of this phenomenon, homes that are located in a top-tier school district in Los Angeles fetch an average 79% more than homes in an average school district nearby. I am living in a neighborhood of expensive homes and they are planning to build a high school along our back property lines.
So property taxes and school performance within a district are inextricably tied. Samantha C., a middle-school teacher with teen-aged children moved from Orange County Florida with her husband to a more rural area with no concern for her new home’s school district. She says, “it was a big change, but we saved over $3000 annually” from not living in a highly-desirable school district. One of our daughters is heading to college next year, and our son is 12, but is home-schooled. A 2019 NAR analysis correlates positively data measured that compares public school enrollment numbers and home prices. Counties with the highest public elementary and secondary-school enrollment over seven years experienced an average 33% increase in home prices.
Pro: Access to playground after school
While home value is something to consider because homeownership is an investment, it’s equally important to consider the reality of livinginyour property. Living by a high-scoring school sounds like a no-brainer, until you realize that a school means kids. The realtor.com® editorial team highlights a curated selection of product recommendations for your consideration; clicking a link to the retailer that sells the product may earn us a commission.
In addition, the size of the district or proximity of schools from neighboring districts could impact the perception of a specific school’s value, beyond the simple expenditure formula. Whitney’s experience shows just how passionate many homebuyers feel about school quality and the education of their children. It also echoes data from the National Association of Realtors showing that 26% of recent homebuyers were influenced by the quality of their school district when selecting a neighborhood. Among buyers ages 30 to 39, that percentage jumps to 46%, followed by 36% of buyers ages 22 to 29. Determining a dollar value for homes located in high-performing school districts seems to be the only area the experts disagree on. Some researchers support study claims that homes in school districts with high test scores are worth $16,000 more than similar homes in poor-performing districts.
They will also be able to advise whether or not you are overpaying for a home in a strong school district and if you have an appropriate list price in mind when considering selling your home. For many buyers considering buying a home in an affluent school district, they may be willing to spend more on a home to avoid the monumental cost of a private school, which can be as high as $20,000 or more per year in some areas. Although purchasing a home in a strong school district may mean paying a higher price for that home, it is still sometimes cheaper than investing in the costly expense of private school. Sellers who are aware of this trend may be able to get away with selling their homes above market value because they know many buyers are willing to pay a premium to be in certain school districts.
Those who plan on putting their children in private schools will most likely place less emphasis on the quality of the school district and will spend more time considering the private school itself. With that being said, those who live close to highly regarded private schools can typically command higher home values due to their close proximity to the private school. Even if your school district isn’t highly desirable, you can talk to your real estate agent about other selling points about your home or community you can frame when talking to a potential buyer. A report from NPR found that a budget for a typical school boosts a community’s funding and nets the school a 45% boost in funds, mostly drawn from property taxes.
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