How Much Do Local School Districts Affect Home Values

Q: My husband and I are looking for a home. How important is the local school district? Lucy, Tinton Falls, NJ

A: Homes in good school districts generally command higher prices and experience faster sales than homes in lower-rated school districts. Research indicates that for every dollar spent on public schools, home values increase by around $20. Averages can be misleading and this positive correlation between better schools and higher home values varies from area to area because there are other factors that influence and impact home values. Also, over half of American households now are childless and more people with children choose to homeschool or send their kids to parochial or private schools. This trend may increase demand for housing in areas with lower performing public schools. Better local schools also often drive property taxes higher property taxes which may offset the economic advantages of higher home values. The quality of local schools is a very important factor in determining housing demand in an area but that could change over time particularly if other factors that affect housing demand become more dominant. Thanks for your question, Lucy.

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