Good Schools can Equate to Higher Residential Real Estate Market Value

by Karen Briscoe
August 30, 2017

School is back in session for most students in the fall.  One of the key factors that contribute to the market value for residential real estate is the quality of the public schools.  The local public school can be an even larger factor than style, age and size of the home. Public school district falls into the category of location, because in the majority of cases the school is location dependent.  Test scores, which translate into ranking, is the indicator that many people rely on to determine whether a school is considered good.  So even if the owner does not need the public schools for personal reasons, it is still important for the parties to be informed when making a real estate decision.

According to CNN Money, good schools can translate into an extra $200,000 in home value. There are several reasons cited:  higher percentage of home ownership; homes on average are larger; and annual housing costs are higher.  http://economy.money.cnn.com/2012/04/19/living-near-good-schools-will-cost-an-extra-200k/

Home ownership rates translate to people who value where they live.  As a general rule tenants do not care for a home the same as owner occupied.  Absentee landlords may not have as vested of an interest in the community.  Owners invest in improvements and upgrades and spend more money maintaining their property on average than landlords.  Larger homes and higher annual housing costs correspond to a higher tax base.  As most public schools are funded primarily from property taxes, this correlates to better schools.

The question is often raised, if an owner could purchase more house for the money in a neighborhood that doesn’t have as strong of schools, what harm is there in that?  The short answer is that it becomes a self-fulfilling prophecy.  If the base price of homes starts at a lower amount, then it will appreciate at a lower amount. And higher priced homes often appreciate at a higher amount, all things being equal.

School districts can change boundaries and that can effect value.  And school rankings can be impacted due to school Board and administration changes.   Thus it is not a guarantee.  It is best to verify all of the relevant data prior to committing to purchase a home.  One of the sources many people cite for public school rankings is the U.S. News Best High Schools. https://www.usnews.com/education/best-high-schools/national-rankings

Karen Briscoe and Lizzy Conroy and their team HBC Group at Keller Williams are active and experienced Realtors® in the Northern Virginia, suburban Maryland and Washington, DC market place. We are happy to advise on what leads to market value, whether for home buying or selling.  Please contact via the means most convenient for you:  www.HBCGroupKW.com, 703-734-0192, Homes@HBCGroupKW.com.

 
Karen Briscoe is Principal of the Huckaby Briscoe Conroy Group (HBC) and author of "Real Estate Success in 5 Minutes a Day". She is an Associate Broker in Virginia, a Certified Luxury Home Market Specialist, and a member of the Women’s Council of Realtors. Karen began her real estate career developing residential lots with the Trammel Crow Company in Dallas, and in commercial real estate with The Staubach Company in the Washington, DC Metro area. Karen has a Masters Degree from Southern Methodist University and her BA from Stephens College in Columbia, Missouri – her hometown.
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