School District Impact On Home Value

If you have or are planning to have children soon, you probably want to purchase a house in a good school district. That’s more than understandable. When you’re about to commit to your forever home, you want to make sure you choose a location that will allow your kids to get the best education possible.

Just how dramatically can being situated in a high-performing school district affect home prices and values? This guide takes a look at four common ways school district quality can affect the value of your home.

Four Ways School District Impacts Home Valuation

Studying historical homebuyers' and sellers’ generational trends reveals compelling data about how good school districts can increase home values. Four areas in particular stand out.

Housing Demand

The NAR found that 26% of all homebuyers consider school quality important. The organization further found that 42% of homebuyers between 31 and 41 years old — a demographic most likely to have young children — are influenced by school district quality. Online listings of homes in good school districts receive 26 more views than the average listing.

Families strongly prefer being in areas close to a highly-rated school — within walking distance, if possible. Realtor.com found that, in addition to their values being higher, homes located in high-performing school districts tend to sell eight days sooner than those in other areas.

Resale Value

Homes in well-performing school districts have built-in value. They’re sought by a large buyer pool as long as district test scores, attendance, and graduation rates stay strong.

When it’s time for homeowners to sell or downsize after their children graduate from high school, they’ll likely find more potential buyers willing to pay more to get their home. Especially if they’ve upgraded or made home improvements throughout their residency, owners may find themselves selling for much higher prices than they originally paid.

Neighborhood Stability

Highly regarded schools can produce a “halo effect” on nearby neighborhoods. They’re envisioned as being more stable, with higher incomes, greater access to valuable resources, and lower crime rates than other neighborhoods.

Although research tends to support this observation, it’s important to note that it’s largely a perceived effect — not necessarily a proven and verifiable cause and effect. Nonetheless, perceptions like this one can be powerful enough to affect home values regardless of fact.

Property Taxes

Since homes in high-performing school districts tend to be priced higher, property taxes may increase proportionately. Much of the property tax charged in these neighborhoods directly funds nearby schools, allowing them to improve on their already strong reputations.

What School District Am I In?

Want to determine what school district services your neighborhood or the neighborhood you’re interested in moving to? If so, GreatSchools.org offers an online tool that identifies nearby schools.

Enter a specific address or click on the interactive map, and the page will return the name of the school district serving the area and the closest nearby schools. You’ll also get overall ratings for each school that comes up.

How to Find School Ratings

To learn exactly how a school district gets its rating and reputation, start by visiting the website of the National Center For Educational Statistics. Search for the school you’re evaluating, and the page will show facts and stats like student-teacher ratios, ethnicity and gender breakdowns, and the school’s NCES School ID.

You can find more details by searching for the school’s individual “report card” through the Office of Elementary and Secondary Education. This site has information on the school’s ratings, including its:

• Math and science standards
• Graduation rate
• Average years of teacher experience
• Much more

Sites for the Bureau of Economic Research and the National Bureau of Economic Research may provide even more relevant school rating data.

Get to Know Your Children’s District

In many cases, you can draw a straight line between the performance of local schools and the value of nearby homes and neighborhoods. School district quality can also affect impressions of stability, prosperity, and the health of surrounding communities. Understanding the impact of successful schools can help you make a more informed decision when buying a home.

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