Take a look at your new home wish list. You’ve undoubtedly included the number of bedrooms and bathrooms you need, listed the amenities you hope to find, and perhaps even the type of neighborhood you hope to live in.
One aspect of the home purchase that few buyers consider is the house’s future resale value. Sure, you don’t have a crystal ball with which to read the future, but housing market experts and economists have studied home values for decades and understand the issues that impact value, both positively and negatively.
Since your home is also a hefty investment, jot down the words “resale value” on your wish list and read on to learn why, whether you have children or don’t, purchasing in a good school district is a wise decision.
The studies
The multitudes of studies on the influence of nearby schools on property values all agree that a good school district positively impacts value.
One study, with results published at BiggerPockets.com, claims that homes near schools with a 4 or 5-star rating at SchoolDigger.com held their value better during the Great Recession than those near schools with fewer stars.
One study found homes near schools that had been awarded an A rating by the state realized an additional $50,000 in value versus homes near those schools with a B rating (Wall Street Journal). That study was in Florida however that number could even be greater in Orange County, CA.
“A study done by the National Bureau of Economic Research found that home values increased $20 for every dollar spent on public schools in a community,” according to a report from the National Association of REALTORS®.
Buyers agree
When the National Association of REALTORS® interviewed homebuyers for their “Profile of Home Buyers and Sellers, ” 25 percent of them wanted to live in a “quality” school district.
More significantly, for home sellers, 53.3 percent of those interviewed expressed a willingness to exceed their budget for such a home. The NAR broke that number down further:
- 6 percent of buyers are willing to pay one to five percent above their home purchasing budget.
- 7 percent will pay six to 10 percent above budget.
- Almost nine percent would pay 11 to 20 percent above budget.
What makes a school district “good?”
One of the most common determinants of school quality is test scores. For instance, GreatSchools.org bases its ratings primarily on test scores.
U.S. News’ annual “Best High Schools” rankings are based on three criteria:
- State-mandated test scores.
- How effectively the school educates its minority and disadvantaged students.
- Participation in and performance on International Baccalaureate (IB) and Advanced Placement (AP) exams.
Interestingly, a recent study sponsored by the Andrew W. Mellon Foundation suggests that “mean test scores are significantly related to property values.”
How much more is a good school district worth?
Determining a dollar value on the additional home values in high-performing school districts seems to be the only area the experts disagree on. One study claims that homes in school districts with high test scores are worth $16,000 more than similar homes in poor-performing districts. (Refs 6)
A Brookings report claims that, on average, homes in high-scoring school districts are worth $205,000 or more than those in low-scoring districts. (Refs 7)
Figlio says homes in top districts net a 23 percent premium over homes in other districts. The best news, at least from the professor, is that no matter the fortune of the housing market – whether it is rising or falling – the premium remains consistent. (Refs 8)
Proceed with caution
Doing your research is the key to shopping for a home with a quality school district as your top criterion. Two game changers to watch out for are the deterioration of quality schools and rezoning.
Check recent elections for how residents voted on school bond issues. A well-financed school is a good sign.
Inquire as to the teacher turnover rate. When many teachers leave a district for greener pastures, it may be a sign that the quality of the schools is going downhill.
Rezoning a school district typically occurs due to overcrowding. A few years back, Las Vegas parents with children in the Clark County Schools District discovered that 17 schools would be rezoned because of overcrowding and a lack of funds to build new schools.
It is important to know that even in a specific location, the schools can vary. For example the beautiful Dove Canyon area in Rancho Santa Margarita are not all directed to the same high school. So beware and always confirm whenever and where ever you chose which school your specific address is registered for. The same is true for Ladera Ranch area.
Although the size and price of a home are always key components when considering the purchase of a home, choosing a home in the best school district you can afford is also an important factor.
When considering the home’s future value, the quality of the school district sometimes trumps all other considerations. Knowing that this is not only going to be your home, whether or not you have children, it is very wise to help protect and grow what is for most people their home is their largest asset. Therefore, school consideration is a worthy consideration for value of future resale.
In South Orange County we have some great choices. The Capistrano Unified School District are top-notch, it’s important to know that not all home addresses are assigned to the same school. If you have a specific school in mind, you need to verify the address you are considering, for it’s boundaries. I always encourage everyone to check out The Great Schools website linked below for in-depth statistics. If you have questions about any specific school, please feel free to ask. My sister (the other half of OC Property Sisters) has her teaching credential and has been a substitute teacher at almost every school here.
I’m also thrilled to announce that Tesoro High School has received a perfect 10 rating! The choir class is led by an Academy Award-winning teacher, and the sports teams are highly competitive and often make it to the playoffs.
You can find information about all schools here Great Schools
This could save you hundreds a month, When buying your home, this is really worth your time to read.
If you have questions or need to understand Property Tax percent, Mello Roos, and Special Assessments
So many great areas in Orange County. Did you know, Rancho Santa Margarita was honored with safest city with best quality of life, they also have great schools. If you would like to see my top five reasons for choosing for living in Rancho Santa Margarita Explore the unparalleled beauty, vibrant community, and exceptional amenities that make this place truly exceptional. Don’t miss out! Here are my top 5 reasons for living in Rancho Santa Margarita, check it out.
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Thinking about Selling or Buying in Orange County, San Diego, or Temecula Area… We are just a phone call, text or email away with any questions you may have or in helping with the choices that are best for YOU!!! Wishing you all the best in moving forward down this wonderful crazy wild adventure of life.
Quote for the Day…
The way you look at things is the most powerful force in shaping your life.
~ John O’Donohue
Thank You,
Your Local Realtor
OC Property Sisters, Dianne & Annette
Orange County Real Estate Expert.
OC Property Sisters
website; OCpropertySisters.com
Email: ocpropertysisters@gmail.com
Phone, text, email, or schedule a meeting.
Dianne Hicks; 949-441-9092
Annette Hurd; 949-226-2252
Fathom Realty
BRE License # 01858415
