The Unexpected Connections Between Home Value and Local Schools

When looking for a new home, there are a lot of factors to consider such as location, size, and price. However, one factor that often gets overlooked is the quality of the local schools. It may seem unrelated, but there is actually a strong connection between home value and the quality of nearby schools. In this article, we will explore the unexpected connections between home value and local schools and why it is important to consider when looking for a new place to call home.

The Impact of Schools on Home Value

It is no secret that home values are affected by a variety of factors such as location, neighborhood, and market trends. But, one of the biggest influencers is the quality of nearby schools. In fact, a study by the National Bureau of Economic Research found that for every 5% increase in standardized test scores, home values increase by 2.5%. This may not seem like a significant amount, but for a home worth $500,000, that is an increase of $12,500.

Perception of Quality Education

The quality of local schools not only affects home values, but it also plays a role in the perception of the neighborhood. Parents, especially those with young children, are willing to pay more to live in an area with top-rated schools. This demand for homes in these areas can drive up home values and create a competitive market for buyers. This is especially true for families who are looking to settle down in an area for the long-term and want to ensure their children receive a quality education.

Economic Stability

Homeowners in areas with highly rated schools often have a sense of security in their investment. This is because schools with a good reputation tend to attract families with higher incomes. As a result, these families are more likely to invest in their homes, maintain their properties, and contribute to the overall economic stability of the community. This can lead to a more desirable neighborhood with higher home values.

Factors that Contribute to Higher Home Values

Test Scores

As mentioned earlier, standardized test scores have a direct impact on home values. Higher test scores are a reflection of a school’s academic performance and can be an indicator of the overall quality of education in the area. Families are often willing to pay more to live in a district with top-performing schools, which drives up home values.

School Districts

Along with test scores, the overall reputation and ranking of the school district also play a significant role in home values. Families often do their research when looking for a new home and will take the school district’s reputation into consideration. For example, a home located in a district with multiple highly-rated schools will be more desirable and command a higher price than a home in a district with only one or two lower-rated schools.

Proximity to Schools

The closer a home is to top-rated schools, the higher the home value tends to be. This is because families with school-aged children value convenience and the ability to have a shorter commute to school. Homes that are within walking distance or a short drive to top-rated schools are often in high demand and can fetch a higher price in the housing market.

The Continual Impact on Home Values

The benefits of living in an area with highly-rated schools don’t just stop at home values. The quality of schools and education in the area can have a continual impact on home values for years to come. As students graduate and move on to higher education or enter the workforce, they will often seek to settle down in areas that offer a similar level of education. This creates a cycle of demand for homes in these areas, leading to a sustained increase in home values.

Conclusion

The connections between home values and local schools may not be immediately apparent, but they are certainly important to consider when looking for a new home. Higher home values not only provide a solid return on investment, but they also offer stability and desirability for homeowners in the long run. So, when searching for your next home, don’t overlook the impact of nearby schools on home values – it could make all the difference in your future investment.