Why school districts matter when buying a home
We help a lot of people buy homes. And one of the conversations we hear a lot between prospective homebuyers and real estate agents is what type of impact a school district has on the value of a home and the quality of life they can expect.
To be sure, school districts play an important role in influencing prospective homebuyers' decision-making. Those most interested in living in better school districts are families with school-aged children or those planning on starting families in the future. But buying a home in a solid school district also has benefits for homeowners without children.
Let's look at how school district reputation and quality can impact a property's value, how homebuyers can research school districts before settling on a neighborhood to live in, and the pros and cons of buying in a high-performing school district.
How do school districts affect property values?
It's common sense that families with kids — or thinking of having kids — want to be in a good school district to offer their children the best education possible in the safest neighborhood they can afford.
But even if you're single or part of a couple with no intention of raising a family — or an empty nester whose kids have flown the coop — living in a neighborhood within a reputable school district has undeniable advantages.
A few years back, the New York Times looked at the relationship between educational test scores and home prices in suburban neighborhoods. They uncovered that a 5% improvement in test scores raised home prices by as much as 2.5%. That's significant.
In 2013, residential real estate brokerage firm Redfin compared homes similar in style, size, and condition. The only difference was that some were near highly-ranked public schools are some weren't. According to their report, Americans, on average, “pay $50 more per square foot for homes in top-ranked school districts compared with homes served by average-ranked schools.” And that was a decade ago — the price difference might be even higher by now in some regions.
What should homebuyers consider when it comes to school districts?
Buyers can sometimes become so consumed with needing to be in the best school district that they lose perspective of the other characteristics they're looking for in a home. These are things like the neighborhood, square footage, outdoor space, upgrades, commuting distance, shopping, dining options, and proximity to parks and recreation. Decide what's really important to you and your family and if those things weigh more than being in a better school district.
There's also the cost. In a lesser school district, a larger home with a garage on a bigger lot could cost you less than a smaller home with no garage and less property in a better district. And taxes might be less, too.
Certainly, purchasing a home in a better school district may mean paying a higher price. But it could still be cheaper than buying a less expensive home in a lesser school district and then enrolling the kids into private schools. According to research from 2021, the average yearly tuition at a private K-12 school in the US was $12,350 per child. That means it would take nearly $160K to get one child from kindergarten to high school graduation in private schools. Double that for two kids. That could be the difference in home prices that could get you into a better school district.
As a buyer, you might also see that your competition — other homebuyers in the area — are willing to pay more to be in certain school districts. It all comes down to location, location, location. When homes sell above market value in a neighborhood, the value of nearby homes can also rise. You're more likely to see a home in a good school district retain its value longer and increase in value faster than those that aren't in a good district — even during market volatility. In a seller's market, it's not uncommon to ask for and get above-market prices simply based on the school district you live in.
What about homes that are within walking distance of a school?
If you can handle the morning and afternoon traffic from school buses — and the roar of the crowd during weekend football games — you may find that homes near schools tend to have pretty strong property values, especially compared to homes that are farther away. That said, what impacts property value most is school ranking and the general level of excellence, not proximity to physical schools.
Other pros & cons of living in a good school district
For families buying in a good school district, there are many upsides:
- Safety: Homes in better school districts typically are in safer neighborhoods, with better street lighting, well-kept sidewalks, and organized neighborhood-watch groups.
- Transportation: A good school district will have a good partner when busing students to and from school. Child supervision, proper maintenance of equipment, and training of drivers are paramount.
- Recreation: Most quality school districts will have playgrounds and sports fields open to the public after school ends and on weekends.
- Resale: If you live in an area with a great school district, especially if it's in proximity to good shopping and dining options, you can look forward to earning more on the future sale of your home.
There are also some potential downsides:
- Property taxes: Some homebuyers won't want to pay the higher property taxes that often come from living in a highly desirable school district.
- Competition: The more desirable the school district, the less likely there will be a choice of homes for sale when you're house-hunting. And it's more likely that you'll compete with other homebuyers — some with deeper pockets.
Finding a good school district to live in
Your real estate agent is the best source for the down-low on school district information. They know the community best and can guide you toward making the right decision for your particular situation. They might even have kids in the local schools and may be able to provide candid insight into school history, administration, after-school programs and other education-related questions that you might not find through online research.
Want to take your information gathering digital? There are many websites built to help buyers review school districts from various vantage points, like average classroom size, standardized test scores, student completion rates, sports team ranking, etc.
Here are a few:
- GreatSchools — is a national nonprofit that provides public and private school ratings and comparison tools based on student growth, college readiness, equity and test scores.
- Niche – connects students and families with schools and colleges. It has in-depth profiles on US-based schools and colleges and over 140 million reviews and ratings to help you find the right school district and community.
- SchoolDigger – has, for 15+ years, helped millions of parents evaluate school performance and quality by providing vital metrics for over 120,000 US-based elementary, middle, and high schools.
Ready to start searching?
Even if you don't have children, a great strategy is to look at homes in stronger school districts and then fine-tune your search from there.
To help you get into the home you want, it's best to be pre-approved, so you know the budget you're working within. Give one of our loan officers a call, and they'll help answer any questions about the process. Or, if you're ready to start now, you can always apply online!