This report is available exclusively to subscribers of Inman Intel, a data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.
Real estate is all about location, and for today’s homebuyers, the location they’re most concerned about is their potential home’s placement in a high-quality school district.
In the National Association of Realtors’ 2022 Home Buyers and Sellers Generational Trends Report, 23 percent of all homebuyers said school district quality influenced neighborhood choice. That number nearly doubled for millennial homebuyers in the 32 to 41 age group.
Although homebuyers can independently research schools through sites like Niche and SchoolDiggers and word-of-mouth recommendations from parents, portals in the past several years have stepped up to provide accessible, easy-to-understand information on the individual listings, neighborhoods, and school districts on their list.
“With almost one-third of home shoppers having children under the age of 18, providing school data is important to help parents make informed decisions,” a Zillow spokesperson told Intel about its decision to launch a search-by-school feature on its mobile app in October.
Although there’s robust demand for school data, it comes with the same risks as crime data. It can be used to make biased inferences about a neighborhood’s value and diversity and open the door for fair housing violations — if agents, brokers and portal leaders aren’t mindful of how they source, display and share data.
Lee Davenport
“All of this comes down to people’s ability to have the most access to information,” real estate educator and coach Lee Davenport said. “Yes, [a consumer] can go do a Google search and get some information, but the whole point is that because we do this every single day, we have access to resources that may not come up on the first or second page of Google. That’s the whole point. Giving them the tools.”
With information comes great power, Davenport said. She’s urging portals and real estate leaders to foster a more holistic and transparent approach to understanding and sharing school data while helping agents uphold fair housing standards.
“But unfortunately, there’ve been numerous studies and research that show rating school ratings that are primarily based on test scores,” she said. “Test scores only tell one part of the story. Was this community redlined at one point in time? What opportunities has this school had access to? What’s the diversity of a school? These are the caveats we have to be transparent about.”
The ABCs of school data on portals
Zillow, Realtor.com, Redfin and Homes.com’s school data is sourced from GreatSchools, a 25-year-old nonprofit that collects and analyzes data from all 51 state departments of education and the federal government. Zillow and Realtor.com also use HomeJunction and Precisely to source additional information about school district zones and boundaries.
GreatSchools has revamped its scoring system twice over the past six years in response to fierce criticism about its methodology potentially reinforcing negative stereotypes about schools in lower-income and diverse areas, leading wealthier, often white homebuyers to self-segregate and flock to neighborhoods with higher school rankings.
“I think GreatSchools has a lot of responsibility to think deeply about how their platform is being utilized or not in relation to patterns of segregation,” Stanford professor Francis Pearman told education site Chalkbeat in 2017. “The notion that a quality school is necessarily one that is white and affluent is a problematic stance.”
GreatSchools pushed back on the idea their scoring reinforced segregation; however, they updated their scoring system again in August 2020 to a four-point system that considers test scores, student progress, college readiness and equity. Test scores have the least weight on the total score, while student progress has the most.
“We are committed to an ongoing evolution of how we can paint a broader picture of school quality that better captures the factors that matter most to parents and that research shows can make a difference in student success,” the nonprofit said of the change. “We think the changes we are making to our methodology are a step forward in our ongoing mission to illuminate issues around equity in education.”
Christian Taubman
Despite past criticisms, Redfin Chief Growth Officer Christian Taubman said GreatSchools is well-trusted and serves as a “first step” in homebuyers’ research journey.
“We try to provide data that answers the most common questions about a home and neighborhood. We’ve found that schools are top of mind for many people, especially families with school-age children,” he said in an emailed statement. “GreatSchools is a nonprofit that is transparent about its methodology and data sources.”
“We appreciate that GreatSchools has increased emphasis on student growth and equity ratings over standardized test scores in its ratings,” he added. “We recommend that buyers and renters use GreatSchools information and ratings as a first step, and conduct their own research and visit local schools to help inform their decision.”
Sara Brinton
Zillow and Realtor.com expressed equal confidence in GreatSchools and said they have strict display and search standards to avoid steering.
Realtor.com Principal Product Manager Sara Brinton said the site doesn’t allow users to filter for homes based on school ratings, and Taubman said Redfin publishes GreatSchools’ subscores for test scores, student progress, college readiness and equity — not just the overall score. Meanwhile, Zillow has a disclaimer that encourages homebuyers to do further research.
“We are committed to fair housing and have considered this when deciding how to display school information on our site,” Brinton said. “For example, we do not offer a search filter that allows consumers to filter for homes based on school ratings, as ratings are only one way to evaluate school quality.”
The growing demand for school data
Taubman said providing school data comes with risks, but it is part of creating a transparent homebuying process — especially for the millions of households with school-aged children clamoring to find their place in the market.
“We’re very deliberate and thoughtful about the data that we show on Redfin, always aiming to balance transparency against the risks of perpetuating historic inequities,” he said. “We consider this carefully every time we add data to the site.”
He added, “In some cases, like crime data, we decide that we can’t get accurate enough with the data for the benefits to outweigh the risks. In other cases, like climate and school data, we decided the benefits outweigh the risks.”
NAR’s Home Buyers and Sellers Generational Trends Report reflects a steady demand for school data, with nearly a quarter of all buyers from 2019 to 2022 noting that school district quality impacted their final buying choice. The share of homebuyers who said school district quality impacted their buying choice experienced a slight decline during the shift to virtual learning in the early pandemic years, dropping from 26 percent in 2020 to 23 percent in 2022.
School district quality ranked above walkability (21 percent), availability of larger lots and acreage (19 percent), convenient access to health services (15 percent), and convenient access to public transit (5 percent) and airports (8 percent) in 2022.
When looking at the data by age, school district quality unsurprisingly carried the most weight with millennials and Gen-Xers, who are most likely to have school-aged children in their households. In 2022, 30 percent of buyers aged 23 to 31 and 40 percent of buyers aged 32 to 41 said school district quality impacted their final buying choice.
Over the past four years, a growing number of homebuyers have begun to compromise on home price, home size, home style, home condition and how far they live from work. For example, the number of homebuyers willing to compromise on home prices experienced a 22 percent change from 2020 (22 percent) to 2022 (27 percent) — a trend that likely reflects a historic run in home price appreciation throughout the first years of the pandemic.
However, homebuyers have been consistent in their unwillingness to budge on school quality — with the share of all homebuyers willing to compromise on the metric never going above 4 percent.
NAR changed the reporting methodology for its 2023 report, making it difficult for Intel to properly compare the past year to the previous four. NAR expanded the survey age range from 23-96 to 18-97, and instead of six age categories, the report now has seven.
As a result of the widened age range, the total share of homebuyers who said school district quality impacted their buying choice dropped from 23 percent to 15 percent — a -34 percent change from 2022. The metric only outranked convenience to health facilities (15 percent), access to bike paths (6 percent), convenience to airports (5 percent), and convenience to public transportation (2 percent) for the 2023 report.
Still, the share of millennials and Gen-Xers who prized school district quality remained consistent with NAR data from 2019 to 2022. Nearly a fourth of buyers aged 24 to 32 and buyers aged 43 to 57 said school quality impacted their final buying choice, and nearly a third of homebuyers aged 33 to 42 said the same.
Homebuyers were still unwilling to budge on school quality, with only 2 percent saying they sacrificed school quality to get their desired home.
Tom Gamble
TKI Analytics CEO and co-founder Tom Gamble said households with school-aged children will continue to guide the real estate market for the foreseeable future, as older generations of homebuyers have “an enormous amount of equity” and don’t want — or need — to face the challenges of the current market.
“The fact they have an enormous amount of equity coupled with the fact that they’re in their eldering years — not old, but eldering — doesn’t make getting into the market an attractive choice right now,” he said. “And with rising interest rates, borrowing money is very, very expensive right now.”
Gamble’s company is in the process of creating its outlook for the upcoming quarter; however, TKI’s third-quarter report revealed families with at least one child 24 and under living at home accounted for 35 percent of all the 301,314 listings it correctly predicted for 2023. Households with children 7 to 17 accounted for another 20.9 percent.
TKI’s predictions are based on proprietary artificial intelligence-powered algorithms that “identify patterns and correlations” from more than 300 data sources, which help real estate agents identify areas of opportunity for farming, marketing and other business activities.
“Those with children are driving listing inventory today followed by empty nesters and singles,” Gamble said in an emailed statement to Intel. “Out of all properties expected to list, we have already been correct more than 300,000 times with plenty of runway to far exceed that number. And by studying the various profiles, we can see who is driving listing inventory.”
He added, “Those who seemingly want more-or-less space, access to better schools along with job or relationship-driven moves are driving listing inventory.”
A Zillow spokesperson echoed Gamble’s findings, saying that one-third of the platform’s users have children under the age of 18.
“According to Zillow’s Consumer Housing Trends Report, 52 percent of buyers rated their preferred school district as a highly important location factor,” the spokesperson said. “The importance of school district selection was particularly evident among buyers in their 30s, with 75 percent of them emphasizing its significance.”
“In addition, 67 percent of buyers in their 40s and 61 percent of first-time buyers considered it a highly important factor in their home search,” the spokesperson added. “Year over year, the percentage of buyers who considered school districts highly important remained steady at 43 percent from 2018 to 2021.”
‘Provide, but don’t personalize’
As the information highway widens, Dr. Davenport said brokerage leaders must help agents understand how to educate homebuyers without breaking fair housing laws — a lesson that was on full display with Newsday’s 2019 exposé that revealed widespread issues with steering.
“There’s a thing that is implicit in the fact that we’re called agents. Part of the very definition of our name is more of us being a conduit … We’re not really supposed to give our opinion on anything. It’s not our job,” she said. “Our job is to make sure people have the most access to all of the options available, so they can make the best decision for them.”
“The moment you begin to say, ‘If you were my daughter or my son, or if these were my grandchildren,’ you’ve crossed the line,” she added. “All of a sudden, this agent or broker has now personalized this family’s search. Let’s stay away from that personalization. Again, it’s not our job to say, ‘This is what I would do.’ Once you add that to the conversation, know that you are probably getting ready to cross into unfair housing.”
On the portal side, Davenport said leaders have the responsibility to help consumers understand the context of the information they’re providing, whether it is a short disclaimer explaining what a school’s score is based on — similar to Redfin’s decision to display GreatSchools’ scores for each category — or linking to an in-depth article or blog post that explains the checkered history of school evaluations.
She’d also like to see portals partner with fair housing testing centers to make sure their current standards around displaying school data are strong enough.
“The thing I always recommend is partnering with fair housing testing centers,” she said. “Self-audit. Reach out and say, ‘Hey, are we violating some things in our approach to this?’ This is something that we’ve been trying to push — instead of waiting for your hand to get slapped by the government or by a lawsuit, which we know too well in the real estate industry, take the first step first.”
