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Where You Can Buy Homes Near “Good” Schools

In California housing markets, where the quality of the schools can vary from being great to awful, schools can be a major selling point for prospective buyers.

When searching for a home, the quality of the local schools is an important factor for families with children. According to a recent Trulia survey, 19% of Americans indicated that their dream home is located in a great school district. But among parents of children under 18, the percentage of Americans who want to live in a great school district jumps to 35%, in contrast to 12% of those without kids. Moreover, the survey also revealed that a great school district is almost twice as important to those who search online for their dream home on a weekly or monthly basis than those who only search annually.

Given the importance of schools in a family’s house hunting decisions, we decided to dig into this topic for the back-to-school season to see where schools are a major selling point. First, we looked at all the homes for sale on Trulia over the last year (June 2015 to June 2014) and analyzed how frequently the word “school” was mentioned in the for-sale listings in the 100 largest U.S. metros. Next, we looked at the frequency in which the word “school” was mentioned with a positive adjective such as: “great,” “winning,” “award winning,” “rated,” “excellent,” “good,” “best,” “top,” “ranked,” “distinguished,” or “performing.” Lastly, we looked at the relationship between mentioning “school” in the listing and the home’s price.

Where Schools Matter Most: Orange County and Silicon Valley

When we compare the frequency of school mentions across markets, we found a wide variation in the share of listings using schools as a major selling point. In metros with highest share of school mentions, as many as 3 in 10 listings talk about schools. Orange County and San Jose ranked highest, with 28% and 25% listings, respectively, mentioning a school. Among the top 10 housing markets with homes noting a school district, five are located in California, two are in Michigan, and three are distributed between Pennsylvania, Colorado and Louisiana. In these top 10 markets, schools appear in 17% to 28% of listings.

Trulia_SchoolSellsBig_Map

Where Schools Are A Real Estate Selling Point
# U.S. Metro % of listings mentioning the word “school”
1 Orange County, CA 27.6%
2 San Jose, CA 25.3%
3 Montgomery County-Bucks County-Chester County, PA 22.5%
4 Grand Rapids, MI 18.8%
5 Ventura County, CA 18.3%
6 WarrenTroyFarmington Hills, MI 17.3%
7 Fresno, CA 17.1%
8 Colorado Springs, CO 16.9%
9 Baton Rouge, LA 16.8%
10 Oakland, CA 16.5%
NOTE: Among the 100 largest U.S. metros

On the contrasting end of the spectrum, there are housing markets where schools are rarely used as a selling point and only about 1% to 5% of listings mention schools. Many of the markets where schools are less pronounced as a major selling point are generally located in Connecticut, Ohio, Pennsylvania, Massachusetts and Nevada.

Trulia_SchoolsSellsNot_Map

Where Schools Are NOT A Real Estate Selling Point
# U.S. Metro % of listings mentioning the word “school”
1 Las Vegas, NV 0.7%
2 Cincinnati, OH 2.8%
3 Nashville, TN 3.4%
4 New Haven, CT 3.4%
5 Hartford, CT 4.1%
6 Pittsburgh, PA 4.4%
7 Providence, RI 4.6%
8 Columbia, SC 4.9%
9 Cape CoralFort Myers, FL 5.0%
10 Rochester, NY 5.2%
NOTE: Among the 100 largest U.S. metros

Where Homes Located Near “Good” Schools Are Notable

We dug a little deeper and looked at the housing markets that not only mention the word “school”, but emphasize it using a positive adjective. It turns out that only 1% of homes for sale are described as being near a “good” school. More frequently though, in 10% of listings nationwide, schools are mentioned in the description, without necessarily a positive attribute.

Although the frequency of using a positive attribute is less common, some of the same markets rank on top. Among the top 10, four are again located in California: Orange County, San Jose, Ventura County and Oakland. Another four are located in Florida, including Orlando, Fort Lauderdale, Tampa and West Palm Beach. The other two are Atlanta in Georgia and Camden in New Jersey.

Where “Good” Schools Really Matter to Homebuyers
# U.S. Metro % of listings mentioning the word “school” with positive adjective
1 Orange County, CA 6.9%
2 San Jose, CA 4.4%
3 Orlando, FL 3.6%
4 Fort Lauderdale, FL 3.1%
5 Ventura County, CA 3.0%
6 Atlanta, GA 2.9%
7 Camden, NJ 2.9%
8 Tampa, FL 2.8%
9 Oakland, CA 2.7%
10 West Palm Beach, FL 2.7%

Taken together, if a listing doesn’t mention schools, does it suggest that the home is not in a good school district? Not at all.

In housing markets where the local school quality ranges from great to awful, highlighting a school district may be relevant to prospective homebuyers and schools are used a major selling point. This is especially true if a home is located near one of the more sought-after schools. When we look at the top 10 markets where schools are mentioned most frequently and with a positive attribute, we can see that they are generally located in states not recognized for good, statewide school systems, such as California and Florida. In these states, some markets do stand out with good schools. The variation may happen at both the state level and within metropolitan markets. Thus, it may be very important to emphasize the school district.

On the other hand, in markets where the local schools are all relatively consistent in quality either at the state or metro level or where schools are not necessarily an important selling point, schools are not frequently mentioned. For example, some of the Northeast states, such as Connecticut and Massachusetts, are known for good and relatively homogeneous school systems. Consequently, homebuyers in those markets may not be as concerned with good schools as they may be with some other neighborhood amenities. For example, schools are rarely mentioned is Las Vegas, which generally attracts more retirees and international buyers than parents with school-aged kids.

To illustrate this point, here’s a county-level map that reveals the percentage of schools with above-average ratings on GreatSchool.org, which grades public schools on a 1 to 10 scale (here’s how they do their ratings). As you can see, there is a lot variation in most states.

Trulia_GoodSchool_CountyMap1

Lastly, does the proximity to good schools impact home prices? The answer to this question is not straightforward. Home prices in great school districts are generally higher, however higher prices may be a result of higher-income residents living in those districts. The connection is hard to detangle and the causality is blurred. Are schools better because of the higher tax base, or did the higher income households move to the areas because of better schools? This answer is still debated among experts.

What we found in our analysis is that mentioning the word “school” in a for-sale home’s listing description does not consistently add to the price of a home or detract from it. Other neighborhood characteristics may be more important in explaining the variation in prices. In the very least, we can say that for the top three housing markets where schools are mentioned most, being able to highlight the home’s proximity to schools added about 7% to the listing price in Montgomery-Bucks-Chester County, PA, 10% to listing price in Orange County, and 16% in San Jose. But before you go crazy with the listing descriptions, keep in mind that median home prices in these three areas markedly differ.

So what’s the main takeaway for home sellers? In most housing markets, it pays to brag about your local school district if it really is a great, excellent, distinguished, award-winning, or highly-rated school.