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August 1st, 2013

Homebuyers: Would you pay more for good schools?



SchoolIt’s no surprise that many people consider the desirability of neighborhood school districts when they purchase a home. But the degree to which schools matter and the extent to which some buyers are willing to pay more to secure a property in a certain district might be news to some.

Buyers: Schools are a major consideration

A recent online survey by Realtor.com, a home-shopping website operated by San Jose, Calif.-based Move, Inc., found that a substantial proportion of people who planned to buy a home within the next two years said school district boundaries would affect their home-purchase decision.

Moreover, nearly 60 percent of these prospective buyers said they were willing to pay more than they’d budgeted to buy a home within a specific district.

Read: Should you spend more for a house to get better schools?

Would you pay more for better schools?

  • Approximately 24 percent of the buyers said they’d be willing to pay up to 5 percent more than they’d budgeted
  • 20 percent said they’d pay 6 to 10 percent more
  • 9 percent said they’d pay as much as 20 percent more.
  • Only 40 percent were resolved to stick to their budget even if that meant sacrificing their preferred school district

What are you willing to sacrifice for better schools?

The 90 percent of homebuyers who said school boundaries were “important” or “somewhat important,” also said they would sacrifice other amenities to prioritize their choice of a particular school district:

  • Over 62 percent said they give up a swimming pool or spa
  • Over 50 percent said they’d be willing to live further away from shops
  • Nearly 44 percent said they’d would pass up a bonus room
  • Nearly 42 percent said they’d sacrifice living near parks or nature trails

In a statement, Barbara O’Connor, chief marketing officer at Move, Inc., said the survey demonstrated the “large impact” school boundaries have on home buyers.

Schools: Always important to homebuyers

The 2012 “Profile of Home Buyers and Sellers,” a separate survey released last year by the National Association of Realtors, also measured the importance of school districts to home buyers.

This survey found 61 percent of recent buyers ranked the perceived quality of the neighborhood as important in their home-purchase decision, and 43 percent said convenience to jobs was a desirable characteristic. Forty-six percent of buyers who had school-aged children highly valued the quality of schools, the same proportion of this group that ranked employment proximity as important.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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