RealtyTrac released a report today showing that nearly two thirds (65 percent) of ZIP codes with good elementary schools are unaffordable for homebuyers on the average wage. Average wage-earners would need to spend more than one-third of their income to buy a median-priced home.
The company based its school quality analysis on each state’s 2014 Department of Education test-score records, then looked at 1,823 ZIP codes that had at least one “good” school — 1,192 were unaffordable to average wage-earners.
In ZIP codes with at least one good school, meanwhile, the median home price was nearly double the median home price in ZIP codes with no good schools. The median sales price in 2015 for homes in ZIP with good schools was $411,573 — 95 percent higher than the median home sales price in ZIP codes without any good schools ($210,662).
Cities including Los Angeles (184), New York (158), San Francisco (77), Chicago (58) and San Diego (49) boasted the most unaffordable ZIP codes with good schools.
“But the good news is that there are still places that are affordable and have good schools,” said Daren Blomquist, Vice President at RealtyTrac.
These include Chicago (179), Detroit (44), Phoenix (22), Miami (20) and Charlotte (18).
Agents can add valuable information
People won’t move to areas just because of schools, but schools and lifestyle are important drivers, said Blomquist.
Agents who can give their clients early information on improving schools and school districts on the rise will be adding extremely valuable information, said Blomquist.
“If they can identify the gems, indicate that a school is on the upswing, they can really show their expertise,” he said.
“Look at your neighborhood — if the test scores have been steadily improving, is that going to have an impact on the housing market?” he said.
Particularly relevant to millennials
Mike Pappas, CEO and president of the Keyes Company, which covers the South Florida market, thinks this research is particularly relevant to millennial buyers and agents with children in school.
“The future for 2016 and 2017 will be the millennials who are starting to have babies, and they will be very concerned about education, so agents’ expertise in that space will go a long way.
“Those associates (agents) who have children and who are engaged in the school system — their involvement is critical because that is where their peer group is and where their knowledge is,” he added.
Pappas has seen school zones improve in South Florida to the benefit of the local real estate market.
“Over the past decade, there has been a focus on improving the South Florida public education system, and we are seeing great results,” he said.
“A good school district almost has a fairy-dust effect that that ripples through the community. When the schools are good, they get more parental involvement, more awareness and a stronger real estate market,” he said.
