You often hear the phrase “Location, Location, Location” when it comes to real estate values. But you might want to add another “Schools, Schools, Schools.”
Buyers are not only interested in great locations near amenities. They also want great schools and if you buy in the wrong school district it can negatively affect your re-sale value. Historically, homes that have resided in the worst school districts in Raleigh-Durham have reaped far less appreciation rewards. For example, in Wake County the average annual home appreciation has been approximately 3.5% while homes in the worst school districts saw less than a 1% increase according to sales data taken from the Triangle Multiple Listing Service.
Consumers believe that not only are they buying a home they’re also buying an education for their children even if it’s a public school. In fact, many buyers won’t even consider a property that doesn’t have a school rating better than average no matter how many bells and whistles come with the home.
However, buyers of Wake County properties have sometimes learned that while a home was located in a school district of their preference they soon learned that their child was zoned for another across town that wasn’t as high performing due to the school diversity policy. This issue alone caused them not to purchase the property. On the one hand, the school diversity policy, strives to protect schools from segregation but on the other hand it causes buyers in the market to reconsider certain homes that may be great buys but suddenly becomes less desirable due to the school assignment.
Consumers are willing to sacrifice certain things to live in the right school district even if that comes with a premium. According to a Realtor.com survey one out of five home buyers said they would pay six to 10 percent above their budget for the right school.
Buying in the right school district is not only a wise choice for the education of your child but it’s also a smart choice for re-sale purposes. The opposite of buying in the right school district could cost you tens of thousands of dollars in potential equity.
Author – Steve Gunter is the Real Estate Team Leader and Editor in Chief for Urhous Real Estate and Media Group. Steve enjoys running, eating (especially a great slab of ribs), and although he can’t swim, going to the water park with his wife and kids.