School districts drive homebuyer decisionsDate posted: 1/8/14 07:15:00 AM
It's not hard to figure out what's important to American families when they look to purchase a home. Some families are attracted to a friendly exterior with a yard. Others want a spacious interior with updated appliances. Most can agree that a safe neighborhood is also of the utmost importance.
But there's usually one determining factor that stands above the rest when it comes to homebuyers: a quality school district.
According to a survey of 1,000 people conducted by Realtor.com, 91 percent of respondents said school boundaries were very important to their search for a residential property. Additionally, 33 percent of homebuyers would rather purchase a smaller home in a good school district compared to a bigger home in an average school zone. The study also showed one in five homebuyers would elect to give up a garage or a bedroom to live in a better school district.
What else will families do to be in a strong school district?
But families are willing to give up more than additional space to find a better school zone. They were also willing to dole out bundles of extra cash.
According to a report from Redfin, a real estate company, homes residing in top-ranked school districts typically netted more profit per square foot and held onto more resale value. Redfin said homes within quality school districts garnered around $50 more per square foot when compared to homes surrounded by average school districts.
For a similar 2,000-square foot home, that could mean the difference of $100,000 at the time of sale.
In order to calculate these findings, Redfin examined homes on Multiple Listing Services databases that were sold between May 1 and July 31, 2013. Redfin used the median sales price and price per square foot of properties from different school zones for its end results.
The real estate source found Los Angeles homes residing in top-ranked school districts could cost an additional $300,000 or more compared to homes in average districts. In nearby San Jose, homes in quality school districts cost $500,000 or more over similar schools elsewhere.
Finding affordable areas with good school districts
RealtyTrac recently unveiled a similar survey which compared home affordability in various zip codes with the quality of elementary schools.
The state with the most good schools in affordable zip codes was New York, which with 105, was nearly double the next best state.
North Carolina was second with 66 and Florida was third with 62. Illinois and Michigan rounded out the top five with 50 and 40, respectively.
On a city basis, Orlando, Florida, was home to the most affordable zip codes with good schools, according to RealtyTrac. Orlando led Florida with nine affordable zip codes.
Raleigh, North Carolina (eight) was second and Phoenix (six) was third. Five cities tied for third with five affordable zip codes with good elementary districts: Chandler, Arizona; Colorado Springs, Colorado; Grand Rapids, Michigan; Lexington, Kentucky; and Wilmington, North Carolina.
The most affordable city with good elementary schools was Trenton, Illinois, according to RealtyTrac. The average home price in Trenton from November 2013 to October 2014 was less than $100,000. Test scores at Trenton Elementary were 1.39 times the state average.
The least affordable areas with quality schools
Looking at the other end of the spectrum, 127 zip codes with strong schools were deemed unaffordable because homes in those areas carried a price tag two-thirds higher than the area's median household income.
New York City topped the list again with 22 unaffordable zip codes. California had four cities among the top seven least affordable, with San Francisco (eight), Newport Beach (four), Oakland (four) and San Jose (four) all in the mix.
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