Fall is in the air and a new school year is upon us! As many are focused on the new routines and changes that occur this time of year, some might wonder how the location and quality of a school district affect the value of a home. As it turns out, quite a lot! Whether you are a buyer, a seller or someone who has resided in a neighborhood with a school for some time, list price can vary greatly depending on the school district that home resides in.
For many buyers, searching for a home within a good school district is a priority mainly because parents would like their children to attend a good school. By category, a good school is categorized by having at least a 30% test score range above the state’s average level. Parents want the best for their children, so many are willing to purchase a home within a district they prefer, possibly sacrificing an extra bedroom or living space. In some cases, buyers are willing to actually pay more for less space in order to send their children to a good school. The overall affect this has on the market is that home prices within a good district are listed noticeably higher, some families stating they are willing to pay up to 20% more for the home they want. Purchasing a home within the boundaries of a good school makes sense for investors as well. Even if they don’t have children who will utilize the school, these homes tend not to depreciate in value compared to homes outside the district. Therefore, since the homes are in higher demand, this purchase is a safer choice from an investment standpoint.
From a seller’s viewpoint, the same rules apply. You are safer listing your home at a higher price if you reside within the boundaries of a good school. If you sell your home in an area with a quality district, you may even be able to get the price you want without having to do extensive updating. For some, however, residing in an area with a good school can mean higher property taxes. Families who have resided in the same home for some time, who no longer have children attending school, can find themselves with extra financial burden while receiving no personal benefit from it. Because of this, unfortunately, more and more seniors are being forced from their homes.
In the end, houses that reside within the boundaries of good schools prove to be great for the real estate market. Quality schools and higher priced homes play off each other in that a school with higher test scores, usually receive a greater amount of funding. The students who attend these schools help that school achieve a good school rating, since families who reside in that district, typically have a higher standard of living. If you are searching for a home in a neighborhood with a good school rating, expect to pay more than similar homes outside the district’s boundary. Rest assured, however, that your investment has a greater likelihood of being protected from market fluctuations.