Bus in neighborhood

People have many different priorities when considering buying a home. These include proximity to a job, amenities, location within a city, the number of bedrooms, and interior finishing. The list goes on and on.

When making a decision about this huge purchase, there are so many factors to weigh. Not the least of which is, where will your kids go to school?

Will you be able to sell the house when you move, and for how much? Will you get a good return on your investment?

The common wisdom for buying a home has been “buy in a good school district, even if you don’t have kids.” And there is good reasoning in this approach - especially if you have kids.

However, there are also some good reasons not to let the school district influence your decision.

Do You Have Kids?

The biggest factor for buying a home in a good school district is, of course, whether you have kids under the age of 18. The truth is, when you buy a sought-after home in a good school district, the value of that home is reflected in the price. You will be paying more up-front. But then, your children will benefit from the education a good school district provides.

The alternative is living in a bigger or better home in a less-desirable school district. At that point, you must factor in the cost of paying for a private school education or making a lifestyle-altering choice like homeschooling your children. Some families are able to do this. However, most families will want to benefit from a high-quality public education.

Private schools, as many people know, can run into the thousands per year for each child. The average tuition cost for a private school can run up to $10,000 per year. That is the same as paying around $900 per month in extra mortgage payments.

Tip: The age of the schools, the condition of the facilities, student to teacher ratios, and standardized test scores are all things you can find online about a public school district. These are the factors used in determining the value of the school district.

If you are childless and not planning to have children, or have children over 18, buying an expensive house in a good school district may not be for you.

As mentioned above, the value of the school district does tend to be reflected in the price of the home and the property taxes. If you are paying this without reaping the benefits, it’s no deal for you. You can always pass that inflated price on to the next buyer, which makes this option seem like the safe bet. However, your home isn’t going to appreciate in value as much as a home in an area with bad schools.

It’s true! You can look at the data provided by Zillow to see the home appreciation values for the last 20 years in any area. The reality is that home values have gone up faster and higher in gentrifying areas than in those with good school districts.

What does this mean?

In the economics blog “Up From Wage Slavery”, the author makes a good case for why this trend is changing. Here are some of his reasons:

  • Government policy can affect school district changes quickly.
  • The growth market is in gentrifying cities. Small towns with good school districts appreciate, but fewer people are choosing to move there.
  • People moving to cities are increasingly either childless or waiting until they are older to have children.

Conclusion

It’s not a bad investment to buy a house in a good school district. In fact, it can be one of the safest investments to make. If you are directly benefiting from the schools in your area, it’s a no-brainer.

But if you are looking at buying a home for its appreciation value, the truth is in the data: homes in gentrifying cities (many of which have less desirable school districts) are appreciating faster and higher.

If you are interested in looking for a house and live in Southeast Michigan, please give us a call. We would be honored to help!

248-348-7200