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Good Schools, Affordable Homes: Finding Suburban Sweet Spots

Posted by | April 4, 2017

MapFor better or worse, it’s common for city-dwelling families that reach a certain size to make the leap to the suburbs for more space and better schools.

But even among comparable suburban neighborhoods, seemingly arbitrary school district boundaries can lead to huge differences in price. There are many factors in a home price, of course, but economists have estimated that within suburban neighborhoods, a 5 percent improvement in test scores can raise prices by 2.5 percent. And for many cities, this is largely the pattern — prices rise with school quality. But there are some districts that break this pattern: schools that deliver on quality with homes that are relatively cheap.

Using home price data from Redfin, a national real estate brokerage, and school quality data based on test scores from the Stanford Education Data Archive, we developed a set of charts that look at school quality, home price and commute. For instance, in the Boston area (where many suburban school districts are considered first-rate), more expensive school districts like Brookline, Mass., tend to have strong scores and relatively short commutes. Equally good districts, like Lexington, may be cheaper, but people living there face longer commutes.

But in some areas – particularly a handful of dense cities with good public transit – the preference for being in the city center seems to outweigh the importance of school quality by a huge margin. Homes in central city locations are generally more valued than those farther out, and prices in the urban locations have risen far faster than in the suburbs since 2000.

The Bay Area is the most extreme case: Homes in the central city carry such a huge premium that buyers in suburban cities like Albany and San Ramon end up paying several hundred dollars less per square foot even though the schools are significantly better than those in San Francisco.

Continue reading at The Upshot

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