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Many people plan to buy a home when they have children or are planning to start a family and in such situations schools become pertinent. Providing good education is vital and it is sensible to buy a home near a good school. But can you find equilibrium, a good school and an affordable home?
A recent report from RealtyTrac analyzes school test scores for about 27,000 elementary schools and home affordability in 7,200 zip codes around the country. From the 1,823 zip codes that had at least one reputable school, 65 percent of the homes were unaffordable to people earning average wages. In these areas, average-wage buyers would have to spend more than one-third of their income to buy a median-priced home.
According to the study, the top five most affordable zip codes with good schools are 60426, Harvey, IL; 48235, Detroit, MI; 40211, Louisville, KY; 70802, Baton Rouge, LA and 14215, Buffalo, NY, and the top five least affordable zip codes with good schools are 94027, Atherton, CA; 11201, Brooklyn, NY; 85253, Paradise Valley, AZ; 33149, Key Biscayne, FL and 07078, Short Hills, NJ.
A few of the metro areas with the most unaffordable homes with good schools were Los Angeles (183), New York (158), San Francisco (77) and Chicago (58). Some metro areas with the most affordable housing market with good schools were Detroit (45), Phoenix (22), Miami (20) and Milwaukee (14).
Data from the Bureau of Labor Statistics and the Department of Education confirm that in the Bay Area, Atherton’s Encinal Elementary School is one of the best in the state, but with median home prices at $6 million and average monthly mortgage at $36, 917, an average wage earner would have to spend 400 times their salary to live there. Similarly, Palo Alto’s Herbert Hoover Elementary, which scored almost 70 percent above the state average is located in a neighborhood with an average mortgage payment of $14,279, which accounts for 149 percent of an average wage earner’s salary.
In an attempt to find out how good schools impact homebuyers’ decisions, Realtor.com surveyed 1,000 home buyers and found that a large number of people are ready to sacrifice a few amenities in order to be near good schools for their kids. One out of five buyers is willing to let go of a garage or even a bedroom for a reputed school and one out of every three buyers is even ready to buy a smaller home.
More than half of the buyers are not particular about nearby shopping areas, as long as the school is good. It is also interesting to see that one out of five buyers is ready to pay between six to 10 percent more than what they were planning and one out of 10 said that they would pay up to 20 percent more.
Apart from providing solid education to their children, people also consider good schools to be an asset to the home’s value. According to the study, the median home prices in good school districts are almost double the median price of home in bad school districts. The study affirms that in 2015, the median sales price for homes in areas with good schools was $411,573, which was 95 percent higher than the $210,662 price near bad schools.
Most homebuyers will consider it ideal to find an affordable home near a good school, but the statistics show that the chances are slim in most parts of the country.
To read the RealtyTrac report in full, please click here.