How a Home’s School District Affects Property Value

Posted by TSI Appraisal
If you’re in the market for a new home, what’s at the top of your criteria? If you said school districts, you aren’t alone. Choosing a home that’s in a good school district can be a top priority for many buyers, even those who don’t have children.
Districting can have a significant impact on resale value as well as the number of offers a seller receives. For a topic so important to property values and high on buyers’ wish lists, school districting isn’t something we tend to talk about a lot. For one, the how and why of districting isn’t widely known and parsing out how school districts are determined can get a little complicated.

How School Districting Works

There are over 14,000 public school districts in the U.S., according to the Census Bureau, including elementary districts (elementary grade students), secondary districts (for students in grades 9–12), and unified districts (all students in an area).
Within some larger or more populous school districts, municipalities may create specific school attendance zones. Since some districts have multiple schools serving students of the same age, these zones determine which area students go to which school.
The Census Bureau updates boundary maps every two years and conducts demographic research on districts. However, that Census data can lag behind updates made by  municipalities in the off years.
Traditionally, Mid-Atlantic and New England districts followed municipal boundaries. That’s less common in the Midwest and Western U.S., where districts can cross city or county boundary lines.
Additionally, while the Census Bureau tracks district boundaries, it doesn’t set or revise them. That’s a decision made at the local or state level. The process for how this happens can vary a lot from one part of the country to another. However, the general trend in redistricting these days is consolidation. Maponics points out there were more than 200,000 districts in 1900.

What School Districting Means for Homeowners

Wherever you live in the country, your home is in part of a school district. While you may think only families with kids should worry about school districts, all homeowners can be affected.
In some areas, taxes benefiting education are voted on at the district level, and some communities can be particularly committed to educational causes, meaning voters approve higher taxes for the district. In one unusual case, local parents even sued to raise property taxes and increase school funding. However, while higher taxes can be great for area schools and the families they serve, it might give pause to some buyers.
When it comes to buyers with children and those planning on starting a family, purchasing a home in a well-regarded district can take top priority. Jennifer Riner from Zillow points to a Trulia study that found that two-thirds of adults living with children said a neighborhood’s school district would be “one of the most important considerations” when searching for a home.
Sam DeBord, Realtor and Managing Broker at the Seattle Homes Group further exemplifies this mindset in his piece on the topic:
“I know the importance of school boundaries. When our first child reached school age, my wife and I went house hunting with school-boundary maps in hand. If a home was one block outside our favorite elementary school’s boundaries, we didn’t even go in. The look of the home, the neighborhood, and how it was laid out were all factors that could disqualify it from our list, but the primary hurdle for every home was that school boundary line.”

What School Districting Means for Resale Value

That special attention buyers have for school districts can translate into an advantage when you’re ready to sell. Jennifer Riner says there are a few things you should keep in mind.
“Being located in a good school district helps with resale by attracting more attention to your property (assuming it’s on the market),” says Riner. Still, while resale value can be important, the effect goes even further. “Being located in a good school district is considered a safe investment,” Riner notes. “Homes in good districts don’t often fluctuate in price when the market goes down and are usually valued higher than comparable properties that may be just a few streets away.”
While a highly regarded school district will give you better options at resale time and help your investment weather market fluctuations, just what does that mean for buyers with kids?

How Backpack and Stroller Neighborhoods Compare

Trulia found an interesting divide when it came to families in large metro areas: some neighborhoods were stroller neighborhoods (those with children aged 0–4 years) while others were backpack territory (school-age children of 5–9 years). The study found that nearly all big cities had more stroller neighborhoods than backpack neighborhoods, suggesting that families moved away as their children approached school age.
Stroller neighborhoods, where parents lived with their young children, tended to be more densely populated, likely with urban high-rises. Families who could afford to relocate opted for the suburbs when their children reached school age, the report found.
Still, other factors were reported to keep school-age kids in the city. Some pricey neighborhoods in Los Angeles saw fewer families moving as their children grew up, as those neighborhoods boasted strong schools, while affordable and lower-density neighborhoods in New York also retained a high number of families with school-age children due to affordability and quality of life factors.
While young families may be split over cities versus suburbs, one thing is clear: school districting influences their decision.

What School Districts Could Mean for You

There is no question school districts are an important factor to consider when buying or selling a home, whether children are a part of your household or not. All buyers should familiarize themselves with the school district and attendance zone for any potential home purchase. Zillow has partnered with GreatSchools to provide rating data for each of their listings, which can be helpful for buyers. DeBord suggests verifying a home’s district before you buy by contacting the school district directly or asking the home’s real estate agent. With your next home in a great district, you can rest easy knowing you’ll be able to reap the rewards when it’s time to sell.