What You Need to Know: Buying a House in a School District

Buying a house in a school district is a no-brainer for families. Furthermore, even for singles and young couples without children, the benefits of buying near the top public schools in your area may be worth the expense. While you may spend more in the beginning, house prices in desirable school districts are often higher and give security during market downturns. 

Buying a House in a School District has Financial Advantages

A 2015 survey by the National Association of REALTORS® (NAR) gave a strong indicator of how schools affect property values in cities throughout the country, stating: “25% of home buyers listed school quality and 20% listed proximity to schools as deciding factors in their home purchase.

Aside from the obvious financial advantage, buying a house in a school district or an area that feeds into a highly ranked school system draws a broader range of purchasers at resale. You are not just attracting those looking for long-term value, but also parents who want to send their children to a good school.

Of course, expenses do matter, in a book, “The New Rules of Real Estate,” discussed house value and GreatSchools data to assess the degree to which there is a link between property prices and school ratings. Each state is assigned a school equity number in the book to assess the link between school quality and neighboring house prices.

Larger point gaps indicate a greater divergence in school rankings for properties in the top 10% of values and homes in the bottom 10% of values. Smaller numbers demonstrate more school parity (or comparability) between school ratings near residences at the top and low ends of the statewide market.

Higher Home Prices in Highly-Rated School Districts

New Mexico, New York, South Carolina, Virginia, and Minnesota were the top five states with the closest school equity, demonstrating the tiniest link between home prices and school excellence. Higher quality schools are not as heavily restricted in these states to higher property value communities, which means that buyers may discover good schools at a variety of price points. 

Homebuyers in Michigan, Pennsylvania, Ohio, Georgia, and Tennessee place much more value on their homes in highly ranked school districts, increasing the point disparity in school ratings between high- and low-value communities, or resulting in less school parity. In Michigan, purchasers in the worst 10% of house prices have access to districts with a 2.1 rating, whilst those in the top 10% have access to districts with a 9.2 rating. Living in superior school districts is important in these states!

In Pennsylvania, where school equity is greater by 7 points, homeowners who relocate from an area near a 5 school to a community near a 6 school suffer a 15.4 percent increase in expenditures. Pennsylvania buyers pay a whopping 60.1 percent extra to upgrade from an 8 to a 9. If you are buying a house in Pennsylvania, you should consider this both at the time of purchase and in terms of resale if you want to sell within the following few years.

Georgia has a 6.8-point school rating gap between low-cost and high-cost areas, making it one of the states with the least school equity and the greatest point rating gaps. In Georgia, like in Michigan, house buyers in the bottom 10% of housing values have school ratings closer to a 2, while those in more wealthy areas have access to schools closer to a 9.

In broad strokes, buyers in Georgia may face higher home prices in highly-rated districts, but they also benefit from a higher value of a house in a school district but a potentially higher resale return.

Finding High-Quality School Districts on a Low budget

Even in states with the least school equity, buying a house in a school district does not have to stretch your wallet to its breaking point. Many low-cost housing options are near to above-average schools, but the overall cost is significantly determined by your entire wish list. for example, buyers on a tight budget may be forced to forego square footage and high-end renovations while looking for a property in a high-rated school district.

However, return on investment is largely dependent on location – many of the home’s features can be changed or upgraded after closing. Aside from providing higher average returns, highly rated school districts can shield current homeowners from the ebbs and flows of the real estate market, allowing for a safer investment in the long run.

Aside from being financially advantageous, communities with high-ranking school systems tend to promote a strong feeling of community. Buyers may expect neighborhood activities, parks, and amenities, as well as an overall family-friendly ambiance because these locations attract academic-focused homes.

Planning to Buy a House in a School District?

Planning to Buy a House in a School District?

When you start looking for a house, your stage of life, your budget, and your family’s demands should take priority over all other factors. New buyers who evaluate all of the facts, including the impact schools can have on resale value, are more likely to discover the value they seek.

Even if you do not have a family or are just starting one, the benefits of buying a house in a school district should not be overlooked. If all else is equal, invest in a home near reputable schools and reap the benefits either when your children attend or when you sell the property to the next owner. For more guidance in home buying, contact your realtor today!

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