GRADING ON A CURB: THE EFFECT OF SCHOOL QUALITY ON PROPERTY VALUES
By Barbara Laken and Annie Alexander
Of all the local neighborhood amenities that can influence a buyer’s decision to purchase a home, proximity to good quality schools is one of the most influential. According to the National Association of REALTORS® 2015 Profile of Home Buyers and Sellers, 25% of home buyers listed school quality as the deciding factor in their home purchase; with 20% listing proximity to schools as a pivotal consideration in their decision to buy.
Results from a recent realtor.com survey clearly illustrate the positive power of good community schools on consumer behavior: One out of five buyers surveyed said they would give up a bedroom or garage for a better school. One out of three said they would purchase a smaller home to wind up in the right school district. Buyers are also willing to pay more to live near desirable schools. One out of five home buyers said they would pay six to 10 percent above their budget for the right school. One out of 10 said they would double that to 20 percent!
Keep in mind that with the passage of the No Child Left Behind Act of 2001, and the Every Student Succeeds Act of 2015, there has been a shift away from using per pupil expenditures as a proxy for the quality of education; with more attention now focused on standardized test scores as the marker of education quality. These statistics are easy to find on most school websites.
Clearly, consumer demand is large enough to conclude that good schools increase home value by some measure. With nearly half of the home-buying population willing to pay more than their intended budget and give up amenities to get into the right school district, making a decision on buying a home should definitely include an analysis of local school boundaries …even for buyers who don’t intend to send children to those schools. So before you purchase your next residence, we suggest you hit the books — and make sure area schools grade as highly as your intended new home.