Do Schools Really Impact Property Values?
When you’re raising a family, you want only the best for your loved ones and children—the best neighborhood, home and schools. Which begs the question: is there a correlation between the quality of school and the value of a particular piece of property? The answer is a resounding yes. According to the National Bureau of Economic Research, for every $1 spent on a public school inside of a community, home values increased by $20.
This article is going to show the impact of schools as they relate to property values in neighborhoods.
People More Willing to Make Sacrifices to Be Near a Good School
Recently, Realtor.com conducted a survey of homebuyers to find out how school performance impacted their decision making when shopping for homes. The report found that for every five buyers surveyed, one was prepared to give up purchasing a home with a garage or a bedroom to be in proximity to a good school. One in three buyers reported that they would settle for a smaller home if it meant that it was close to a better school.
Aside from sacrificing in the floor plan, homebuyers reported that they were also willing to pay more monthly to live inside of a well performing school district. One of every fifth of surveyors reported they would be willing to spend an addition 6 to 10 percent; and one in ten said they would pay up to 20 percent more!
School Scores Impact Price
With the increased accessibility to data, the truth behind a school’s performance has become much more transparent. You can find out a school’s standardized test scoring in the same amount of time it’ll take to Google the best pizza place in the area. According to the Wall Street Journal, when Florida unveiled a new system for scoring schools, the value of homes was impacted immediately. Neighborhood homes near A-rated schools increased in value by as much as $10,000 when compared to a similar home a B-rated school’s neighborhood.
Creates Challenges for New Families
A great school representing your neighborhood can be a huge win for owners who already live there. However, there is a distinct problem that arises nor new families trying to enter such a neighborhood. This creates several socioeconomic issues for families that want to provide top-level schooling for their children. The best schools now have the most expensive neighborhoods surrounding them. Even if a family can afford the cost of living in such an area, these neighborhoods are very competitive, and houses will typically sell much quicker for much more money.
This creates a big gap between low-earning, middle and high-income families. Those who can afford to live a more affluent lifestyle, usually do. Which leaves lesser earning families stuck in schools that are not performing as well.
However, dreams of living in a good school zone are not always fleeting. Whether it’s saving up for a bigger down payment, PMI, or an FHA-backed loan, clients have many opportunities to secure a great loan.
Keep up with your all of your clients in all of their price ranges by using a real estate IDX website, connected to a CRM to manage all your data regarding their price range and future plans. When a new online lead registers from listing portal or directly through your IDX website, their information is imported, parsed, and scored automatically so you have a greater understanding of their preferred listing before sharing notes with your lender.