School quality is such an important factor in home values that real estate agents are sometimes counseled not to mention it to prospective buyers. The concern, agents are warned, is that too much enthusiasm for attractive, well-performing schools may harm sales in other areas.
Real estate firms aren’t the only ones who believe that good schools are good for property values. Surveys of buyers frequently find the same things, and that applies not only to families with school-aged children but also to older buyers.
Homebuyers, in study after study, say they would spend more to purchase a home near good schools. About one in five say they’d spend up to 10 percent more to be near good schools. One in 10 says good schools are worth a 20 percent premium. Perhaps most surprising, one in five would settle for a smaller house — fewer bedrooms, no garage — to live in an area with good schools.
At least one respected group of economists says the schools are the driving force in the equation. Generous buyers don’t cause healthy schools. Instead, successful schools raise property values and sales prices.
Those economists don’t work for a school board trying to get a bond request passed. They work for the Federal Reserve.
Good schools, they’ve found — most recently in a 2010 study of thousands of homes in the St. Louis, Mo., area — protect property values. They found that having effective, attractive schools made homes and other properties in neighborhoods and communities more valuable. Good schools protect the equity you have in your home.
More than that, the Fed economists found the effect grades on a curve. Horrible schools and poor schools have roughly the same effect — they subtract 10 percent to 15 percent from home values. That is, they steal $15,000 from the owner of a $100,000 home.
Good schools — the ones with “B” averages — add about 10 percent to the value of the same home. And the best, grade “A” schools, add as much as 20 percent to local property values.
The bankers at the Federal Reserve would say that spending a couple of hundred dollars a year for better-equipped, more-capable schools for a $10,000 to $20,000 return is a smart financial decision.
— PORT HURON TIMES-HERALD (AP)
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