Nothing quite marks the end of the summer like seeing the familiar fleet of yellow school buses driving around town. Back to school season is in full swing!
There’s no denying that school systems have an impact on housing values. Simply put, people are willing to pay more for good schools. We see evidence of this in research by Brookings Institution, which found that across the 100 largest metropolitan areas, housing costs average nearly $11,000 more per year near a high-scoring public school than near a low-scoring public school.
So, what does this mean for home buyers?
Be Prepared to Pay a Premium
Buying a home in a top-ranked school system will cost you. How much more? An analysis by Redfin showed that buyers are willing to pay an average of $50 more per square foot for homes near top-notch schools. Homes just a short distance apart with nearly identical attributes can sell for drastically different price points if it means buying in a top school district vs. an average school district.
You May Need to Make Some Sacrifices
If you prioritize school systems in your overall buying strategy, you may need to make some sacrifices to stay within budget. In a recent survey, many buyers stated they would trade amenities for better schools. About 62 percent said they’d give up a pool or spa, 50 percent would give up accessibility to shopping and nearly 44 percent would pass on a bonus room.
Budget for Higher Taxes
State and federal government provide some support, but the majority of public education is funded by municipal tax dollars. The amount of support that school districts receive from municipal property tax revenue depends on the local tax base. In areas where the majority of students are attending public schools, you can expect property taxes to be covering the lion’s share of the funding.
School Spending May Increase
If you choose to buy in an area where residents value education, school spending will be a main focus. If you have school-age children you may be in support of spending if it’s going toward improving the quality of your kids’ education. This money can go toward anything from state-of-the-art technology to new programs and supplies. However, if you do not have children or once your kids are grown, you likely won’t feel the direct benefit. Regardless of whether or not your family utilizes the public schools, you may still reap the benefit of school spending. In fact, a study by the National Bureau of Economic Research suggests a one dollar increase in per-pupil state aid increases aggregate per-pupil housing values by about $20.
It’s Not All About Buying
There’s no doubt that great schools make for an easier sell. This is based on the historical trend that as test scores rise, so do home values. Thinking long-term, this means that when it’s time to list your property, you will likely reap dividends.
How to Research School Systems
The area where you choose to buy your home impacts the public school system your children have access to and your property value. Considering these facts, how can you go about researching school districts?
- There are some fantastic online resources such as the U.S. Department of Education and comparison websites like GreatSchools.com and SchoolDigger.com. These sites provide excellent snapshots, reports and data about districts and specific schools.
- At a minimum, you should speak with parents who have children in the school system. They can give you the inside scoop and discuss their experiences.
- You can even schedule an on-site visit to meet with teachers and faculty to learn about areas that may be of interest to you, such as statistics on test scores, student-to-teacher ratio, graduation rate, class sizes, special programs, etc.
Choosing a Location With Schools In Mind
Whether or not the educational aspect influences your home search, you should still consider the proximity of your house in relation to the schools. From a logistics standpoint, the location has a direct impact on traffic patterns during pick-up and drop-off hours due to school speed zones and bus stops. Depending on your situation, you may want to be in walking distance of the elementary school or as far away as possible. Moreover, where you buy within a town or city may determine which school your child will be allowed to attend.