Column: Local school district is one factor when buying a home
Local realtor James Long gives his perspective to real estate in Guthrie.
Real Estate and Schools
When people buy a home there are many factors that influence their decision. The look of the home, its size, layout, age, and proximity to amenities are all important to varying degrees, depending on the individual buyer.
The local school district however is one factor with significant influence. We’ve always known that good schools attract families with school-age children, but recent statistics add concrete numbers and surprising trends to how people buy real estate.
Extreme School Buyers
Although, it’s not Guthrie, the best school districts near Seattle have recently seen a huge influx of buyers from China, paying premium cash prices for homes without viewing the houses in person and purchasing remotely. These buyers greatly value education.
The domestic home-buying population also clearly values the right school. Realtor.com’s recent survey of nearly 1,000 prospective home buyers showed that 91 percent said school boundaries were important in their search.
Dedication to Education
I personally know what Guthrie Public Schools system is like, I grew up in it. I got a great education, and personally feel that if you are meant to succeed and you are disciplined and are willing to work hard you can succeed anywhere. However, I am not the norm. People who are looking to move into our community are looking at state score cards, and the conditions of our facilities. They don’t care about the heart and hard work of our teachers, and most want to provide every opportunity to their children.
Consumers are willing to sacrifice certain things to live in the right school district. Some of Realtor.com’s survey results were surprising: One out of five buyers would give up a bedroom or a garage for a better school. One out of three would buy a smaller home. A full 51 percent would give up shopping for schools.
Buyers are also willing to put their money where their mouths are. One out of five home buyers said they would pay 6 to 10 percent above their budget for the right school. One out of 10 would double that to 20 percent. It makes one wonder: How much investment in a school district is appropriate?
Do Schools Influence Home Prices or Vice Versa?
Conversations about schools and their effect on a home’s value are often of the “chicken or the egg” type. Homes in the best school districts, on average, sell for higher prices than similar homes in less-popular school districts. A simple analysis might say that good schools are wholly responsible for this added value.
At the same time, on average, more affluent home owners live in more sought-after school districts. Statistics often show that for large sample sizes, the more affluence there is in a community, the higher test scores will be in that same community. Test scores are just one measure of “good schools,” but they’re a highly quoted measure. There can be a self-reinforcing mechanism here that might overemphasize the effect of the school itself on the prices of those homes.
Consumer Demand Shows Clear Connection
In the end, though, it’s hard to deny that there is strong consumer demand for good schools. Demand drives prices higher for a limited product like real estate. We probably can’t say exactly how much that demand has on home prices, because the market is so complex and every home buyer’s decision weighs so many different factors.
Clearly, though, consumer demand is large enough that we can conclude that good schools do increase home values in some measure. Half of the home-buying population is willing to pay more than their intended budget to get into the right school district, and more than half would give up other amenities. Making a decision on buying a home should definitely include an analysis of the school district, even for buyers who don’t intend to send children to those schools. Good schools provide stability for a community, and that’s good for the property values of everyone who lives nearby. So next time a school bond is proposed you might ask yourself “When I’m ready to sell my home would I like my value to be more, the same or less?” Supporting education just makes good sense on so many levels.