October 1st, 2013 11:44 AM by Ron Mastrodonato
Redfin took a look at homes on Multiple Listing Services (MLS), databases used by real estate brokers, that sold between May 1 and July 31, 2013 to calculate median sale price and price per square foot of homes within school zones. School zone boundaries were provided by Maponics. School data and school test scores were provided by Onboard Informatics and GreatSchools. School service boundaries are intended to be used as reference only. To verify enrollment eligibility for a property, contact the school directly. The percentile rankings are based on test scores for each of the schools in this report. School and home coverage consisted of 10,811 elementary school zones across 57 metro areas and included 407,509 home sales.
In the age of Tiger Moms and raising the Smartest Kids in the World, getting the best education for their kids has become a borderline obsession for American parents. Problem is; it’s not cheap. And we’re not just talking about private schools. In the United States, housing prices in the zones of highly ranked public schools are remarkably higher than those served by lower ranked schools. Although we were somewhat floored by the higher prices in many zones, the good news for parents is that there are several neighborhoods left where homes are relatively affordable in highly ranked school zones. Redfin was able to uncover these steals by analyzing home prices and test scores of elementary schools across the country.
For this study, we analyzed home prices compared to the test scores of elementary schools across the country. While we expected to see higher prices for homes in highly-ranked school zones, we didn’t expect the difference to be so large. In certain markets, the difference amounted to hundreds of thousands of dollars for similar homes in the same neighborhood.
Median home sale prices vs school test score ranking. (Click for full size)
Everyone assumes that better school districts tend to have bigger homes, higher quality homes, larger lots, or a more prime location (views, quiet streets, etc). We’ve debunked that assumption. When accounting for size, on average, people pay $50 more per square foot for homes in top-ranked school zones compared with homes served by average-ranked schools. This means that the price differences for similar homes located near each other but served by different schools can range from tens to hundreds of thousands of dollars.
Median sale price per square foot compared to school’s test score rank (Click for full size)
Homes just a short distance apart with nearly identical attributes are selling for drastically different prices. We’ve looked across the country at homes that have sold in the last three months and found five examples where the prices vary on identical homes by as much as $130,000.
Every metro area in this report has higher prices for homes served by top-ranked public elementary schools. Coastal California leads the way in terms of cost, with homes in the highest-ranking school zones running from $300,000 more in Los Angeles to nearly $500,000 more in San Jose. Although the dollar cost differences in Miami and Phoenix were not as great, homes in the top-ranked school zones were still more than twice the price of homes in the average-ranked school zones, going from about $150,000 to $300,000 in median home sale price.
At the other end of the spectrum, Queens, NY, Raleigh, NC, and Eugene, OR offer smaller price differentials when going from an average-ranked school to a top-ranked school. For the chart below, average schools have test scores between the 40th and 60th percentiles in their state, while a top tier school is defined as the 90th percentile and above within its respective state.
So, what’s an ambitious parent to do with these rather daunting home prices? Fortunately, Redfin crunched the numbers and found numerous highly-ranked schools across the country where homes were significantly more affordable compared to homes within the boundaries of the top-ranked local schools. Click on any of the schools below to drop into Redfin and find homes currently for sale served by these more affordable school zones.
All information deemed reliable but not guaranteed.