Your Home's School District Matters - Whether You Have Kids Or Not

One important part of determining the value of real estate is the rating of the school district. Properties that are located in outstanding school districts can sell for more than similar homes in less successful school districts. Before you purchase a new home, it is of vital importance to investigate the school district, regardless of whether you have children, or even if you do not plan to have any.

Home Prices Are Influenced by School District

Real estate agents have noticed that the school district where a property is situated is a key factor affecting home prices in certain areas or neighborhoods. Homes in the higher-performing school districts being sold for higher prices than similar homes located elsewhere has become a more widespread phenomenon in recent years, where it may have been the exception before.

Property in the better-rated school districts can be sold for as much as 30 percent more than comparable homes in other areas. If you look at the median cost of a residence in the US at around $220,000, the price difference is significant. In areas where median prices are higher, naturally, there can be an even bigger differential, but even in places where median prices are lower it's still a definite difference. Do the math, and it's a fair chunk of change.

Buyers Are More Particular In a Slow Market

In previous years, home buyers were more concerned with such things as the home's distance from jobs, shopping centers, downtown businesses, and possibly less tangible and measurable attributes such as having trees in the neighborhood. Now, home buyers are more wary of negative factors such as being in a school district that is less desirable, where the per capita spending and standardized test scores are low. Homes in these areas can be hard to sell if the homeowner chooses to move, and the property values of these homes tend to be lower.

Perception Creates Real Value

In some areas with the best schools, buyers actually bid up the prices. This can contribute to inflated home prices, or in a slow market can let homes decline more slowly than the general trend. This affects the listed price of any home in the area available for sale after the transaction. Buyers can easily get school performance summaries and related data early in the search. They know it is a significant factor in the purchase price of the property a good factor in what it may go for in a future sale. In many cases, school ratings are given greater credence than neighborhood demographic data.

No matter the state of the market, any reason that can lead a person to purchase a home in a particular neighborhood increases the value of those homes. Investors and homebuyers need to remember that the boundaries of school districts are subject to change, which can increase or decrease the value of the property by a significant amount. In an established district that is near a new subdivision, for example, things could shift seemingly on a whim, with little notice, as the population shifts. In real estate, little is permanent and almost everything is subject to change, and this even includes the school district in which the home is situated.