If you are like most families, you choose your new home’s location based on the quality of the schools. Even couples that don’t have children yet put emphasis on the quality of the schools. It makes sense, though, as your home value does depend on the quality of the school districts in the area.
Homes in Good School Districts
So are homes in good school districts always worth more money? It depends on how you look at it. Typically, homes near a good school district sell for more than homes in less the quality school districts. But, looking at it the other way, homebuyers with more money will have the financial ability to buy the homes in the better school district. Studies show that children from affluent families usually test better. This will bring the schools’ ratings up – but is it the school or the students that go there?
Supply and Demand
Any way you look at it, there is often a higher demand for schools in a good school district. What happens when demand increases? The prices of the home will go up. Just how much does a home’s value increase? It depends on the level of demand. At some points, you may see the homes have rather high values, but then see them gradually fall as the demand waivers, which usually happens mid-school year.
No matter which way you look at it – quality schools usually surrounding higher value homes. Once that happens, it excludes the lower-income families, forcing them to buy homes in the lower rated school districts. That being said, the higher values tend to prevail in the better school districts. How much of a role did the school district play? It depends on the situation.
If you are in an area that the school just did a complete overhaul, such as building new schools, revamping the educational content, or hiring a new superintendent, it may raise home values in the area. The new and improved schools will bring in a higher demand. People will want to go to that school, which will, in turn, increase the value of the homes around it.
If the school was always good, chances are the home values have been higher all along. As the market naturally appreciates, so do the home values, making it look like the good school districts raise the home values.