Last Updated on June 28, 2023
There’s no question about it– school districts have a direct impact on the cost of housing around them. In fact, research shows that for every dollar spent on public schools within a community, home values increased by 20 dollars.
The school rating system has become an important benchmark as well, with studies indicating that homes in A-rated school districts have an increased value by as much as $10,000, compared to similar homes in B-rated school districts.
But is it worth buying a more expensive home just because it’s in the school district of your choice?
Understanding the cost of buying a home in a specific school district
To figure out if the sacrifice of a more expensive home in favor of your desired school district is worth it, you’ll need to do a little math.
First, you’ll want to get an idea of how much homes cost within the school district of your choice and compare that to the cost of homes elsewhere.
- Calculate the monthly principal and interest payment (don’t forget PMI if you’re putting less than 20% down)
- Estimate property tax and insurance based on each area
Next, weigh your options should you not choose to live in the school district of your choice. Is it an option to send your kids to that school district? Are there charter schools available that may be a better fit? What about private school?
Now, you’ll compare the total monthly payment of the home in the more expensive school district with the cost of the home in the less expensive school district with the added cost of private tuition (if you’ve decided to go that route).
See where your cost differences are, then consider these factors, too:
- A school’s ratings and zoning can fluctuate from time to time, would you be okay with that?
- Evaluate the potential of each area/school zone in question. Oftentimes, you might find a home in a neighborhood that is slowly transforming. This change typically brings in young families in the process that take a renewed interest in the schools, thus turning a good school district into a great school district.
- Are you willing to sacrifice square footage, number of bedrooms and general amenities to be able to afford a home in a different school district?
Of course, nothing is a substitute for thoroughly evaluating each school in question. Beyond going online and doing some preliminary research on sites like Greatschools and Niche, it’s important to actually visit the school in person.
Get a feel for how the school functions when you talk with administration members. Make sure to ask about class size, extra curricular activities, language immersion programs, arts and music offerings and advanced placement courses available.
Ask your Realtor to connect you with parents who have children in the school districts you’re considering; better yet, ask your Realtor their thoughts, too. Your Realtor can help you weigh the pros and cons of specific school districts, using their market knowledge to guide the conversation.
Bottom line: Before you rule out specific areas/school districts in your home search make sure to consider all the above factors.