When potential home buyers are seeking a new residence, several factors influence their purchase decision and willingness to pay a higher price for a home. Aesthetic features such as updated kitchens and bathrooms, open layouts and curb appeal can boost home value, but studies are showing that a certain non-visual aspect of a home’s location influence its price significantly: the local school district.
The United States home-buying population highly values quality education. According to a Realtor.com® survey of approximately 1,000 potential home buyers, 91 percent said school boundaries were important factors in their housing search.
The Price of Higher-Ranked Education
In 2013, Redfin, an online real estate brokerage, conducted a study of over 10,000 elementary schools and 400,000 home sales across 57 metro areas to analyze the relationship between school performance and home prices.
The study concluded that, on average, buyers pay $50 more per square foot for homes in high-rated school districts than homes in average-rated school districts. The study found that homes served by different school districts with similar square footage, the same number of bedrooms and baths and location near each other can range in price from tens of thousands to hundreds of thousands.
Buying in a Good School District
Studies surrounding the correlation between home values and school districts often bring up the “chicken or the egg” question. Do good school districts increase home values or are better-valued homes built in good school districts?
Regardless, it is hard to deny that there is a strong consumer demand for respectable school districts, and that demand drives prices higher, especially for limited real estate.
Whether you have children, are planning or planning not to, or are empty-nesters, buying in a good school district can be advantageous. Statistically, not only do homes in good school districts have greater resale values but they tend to sell faster and are more likely to hold their values in the event that the market dips.
Interested in more home buying information? Our Mortgage 101 Handbook is a great resource for first-time and repeat homebuyers.