Parents will move to a new neighborhood and pay a huge premium to live near a good school:
For some home buyers, there is no factor more important than the public schools their children will attend. They analyze student-body performance on standardized tests, school rankings, what percentage of alumni go on to four-year colleges and which schools send students to Ivy League or top-tier state universities. They then uproot their lives to move within these districts’ boundaries, where homes can cost hundreds of thousands of dollars more than nearby homes zoned to different schools.
In La Cañada Flintridge, Calif., a city in Los Angeles county, the acclaimed La Cañada Unified School District determines the real-estate market, agents say. “I’m very busy in March, when the private-school rejection letters go out,” said Anne Sanborn, a real-estate agent with Sotheby’s International Realty in Pasadena. When parents find out their kids haven’t been accepted at elite private schools, they start house hunting in La Cañada, Ms. Sanborn said.
Ms. Sanborn added that “there is a mass exodus from La Cañada when their kids graduate high school,” as families sell their homes and seek neighborhoods closer to downtown Los Angeles or Pasadena.
Parents don’t seem to care which way the causality runs:
Online tools that measure student performance have made it easier for home buyers and agents to assess schools across the country.
For example, GreatSchools, an Oakland, Calif., nonprofit, rates schools based primarily on how well students perform on statewide assessments and has provided rankings to real-estate websites Zillow, Trulia, Move and Realtor, said Weezie Hough, director of strategic partnerships.
In an analysis of 1.6 million home listings in the U.S. through the first six months of 2016, Realtor.com found that houses in public-school districts with GreatSchools ratings of 9 or 10, the highest scores possible, were priced, on average, 77% higher than homes in nearby districts with scores of 6 or lower. Additionally, homes located in top districts sell four days faster — at 58 days — than the national median of 62 days, the analysis found.