Fall is in the air and with everyone back into a school-day routine, it’s worth assessing how public schools affect more than just your kids’ educational future. In fact, whether you have children or not, school districts should be on your radar when considering the housing market.
The school district in which a home is located has at least some bearing on that home’s value. Homes in top tier districts tend to be more expensive, while those in less competitive districts are cheaper. Following are a few ways home prices are affected by schools, and why it matters to you.
Urban vs Suburban
The market is complex enough that it’s not always as simple as good school = higher home value. For instance, other location factors will affect home prices too. Home prices in urban areas tend to be less affected by school district and more affected by other city-living attractions like shopping and cultural draws. In suburban areas, though, home prices are most definitely affected by school quality since these areas often appeal more to families with children looking for stability and room to grow.
Taxes
How are public schools funded? There are various levels of funding starting at the top—the federal level—and moving down to state, and community levels. Much funding comes from taxes like income and property taxes. And though many people aren’t clamoring to pay higher taxes, it’s worth thinking about how the taxes you pay affect the schools in your district. More money oftentimes means better schools because better funding allows for stronger teachers, and better learning materials. Sometimes a small jump in taxes can create a large appreciation in home value. So next time you’re in the ballot box voting on a new school bond, make sure to do some real thinking and ask yourself how it might affect your home value in the long run, and not just your pocket book in the short run.
What Makes a School “Good”?
School ratings depend on a number of different factors. Performance on standardized tests tends to be a big one. Quality of teachers, size of classes, and type of class or extracurricular offerings are others. More important factors include how much money is spent on each student per year, attendance and graduation rates, and overall college readiness. Make sure to research how your local schools add up. Ratings oftentimes vary from state to state; to help you in your search try browsing greatschools.org, a nonprofit organization that assesses a variety of different school factors and rates them for your convenience.
Link: greatschools.org
So What?
At the end of the day it’s worth knowing what’s going on in your local school district even if you don’t have kids attending, and especially if located in a suburban area. Educate yourself on how local schools are performing on standardized tests, where your taxes are going, and what local families think about their educational system. And next time there’s a community meeting with the school board, think about attending. Did you get a mailer about a new school bond in the mail? Instead of recycling it, think about how those funds will affect the local schools, and how those schools will affect the stability of your neighborhood, and as such, the stability of your home price.
Nice newsletter. Good article. Good information. Thank you. Carol
For conventional financing, borrowers with scores at 740 or anywhere above generally receive the same loan pricing (rate and cost). That being said, the better your credit the higher your chances of receiving loan approval with high debt to income (up to 50%) or high loan to value (up to 95%) which can be a major benefit when applying for a new loan. For Jumbo financing, borrowers with credit scores above 800 are generally rewarded with both better pricing and easier guidelines. There are no situations where better credit is a negative when obtaining new financing so we should all continue to strive to reach and then stay in the 800’s.
What are the advantages of a score over 800
Thank you Mike for this information. As a residential realtor the information that you provide is crucial to a successful transaction for my clients. You are indeed a pleasure to recommend to all of my clients. You are so professional, thorough, conscientious and pleasant to work with. !!
Hi Dane! Wanted to make sure I'm clear on this. Am I right in saying that on whichever remodel is done you still take a loss rather than an increase in value - the ROI will never exceed 100% of cost?