Finding the perfect place to call home sweet home can be a really tough process. You’re not only searching for a place to raise your family, but you also need to make sure your choice is a smart financial investment for your future. Based on American housing trends data collected by the National Association of Home Buyers, homeowners in the south move every 13 years. That’s the shortest length of stay of any of the four regions studied. If you’re feeling the 13-year itch and thinking about moving, make sure that, over and above the primary factors that buyers often take into account, such as size, price, and location, you don’t overlook a factor that could impact your home’s value by as much as 20 percent: your school district.
School District & Home Value
How important is the school district to potential buyers? The National Association of Realtors surveyed recent home buyers on secondary factors that impacted their home buying decision. The survey concluded that 46 percent of buyers who had school-aged children ranked school quality as very important, the same percentage of survey respondents who ranked employment proximity as very important. Factors that buyers were looking for in a school system were the age of the schools, the condition of their facilities, the student-to teacher ratios, and test scores. If you’d like to check your local school’s quality rating check out Schooldigger.com or Greatschools.org.
You don’t have to be an economics wiz to know that the demand from buyers who want to live in a quality school district can create a seller’s market. If you’re a buyer or seller crunching property value numbers, keep in mind this equation you might not have learned in Econ 101: House + Quality School District= $$$$. Ok, this formula might not be scientifically proven, but these statistics certainly help validate it:
- Prices of housing in a school district that were perceived to be highly rated by buyers increased the value of the home by $0.52 per square foot.1 (Tweet this)
- A 5% increase in the average elementary school test score is associated with a 4.9% increase in house prices in that school district.2
- After accounting for differences in size and quality of the house, the estimated remaining difference in the value of houses in what was considered a better school district was $9,500.00.3
Additionally, homes in a quality school district historically have held their value well in a down real estate market, making them a solid financial investment.
So whether you have children and are looking for a great school district to maximize their educational opportunities, or you don’t have children and are just looking to make the best financial investment when purchasing your home, keep in mind the impact a quality school district has on your home and/or potential home’s price.
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2Black, S., (1999), “Do Better Schools Matter? Parental Valuation of Elementary Education,”Quarterly Journal of Economics, Vol. CXIV, 577
3Bogart, William T., and Brian A. Cromwell. “How Much More Is a Good School District Worth?” National Tax Journal, 50 (1997), pp. 215-32
1Tiebout, Charles. 1956. “A Pure Theory of Local Expenditures”. Journal of Political Economy. 5 February 2013.