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Home near a good school? Its value increases by 77 percent

By: Kelly Leighton on in

A good school goes a long way when it comes to home values.

According to a recent study by ATTOM Data Solutions, homes in zip codes with at least one good elementary school have an estimated home value 77 percent higher than those homes in zip codes without a good elementary school.

The study compared home values and price appreciation of more than 45 million single-family homes and condos to average test scores in elementary schools in 4,435 zip codes across the country. A “good” school was declared so if their overall test scores were at least one-third above the state’s average.

Of the zip codes analyzed, 1,661 had at least one school defined as good. The estimated home value on average in this zip codes was $427,402, compared to the average home price of $241, 096 in the 2,774 zip codes without a “good” school, an increase of 77 percent.

“While good schools are one of the top items on most homebuyer checklists because of the quality-of-life benefit they provide, this report shows that high-performing schools also come with a financial benefit for homeowners in most markets — at least over the long term,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile, home prices in zip codes without any good schools tend to be more volatile, which might work to a homeowner’s financial benefit in the short term but not over the long term of at least 10 years.”

In zip codes with a good school, homes have seen an average return on investment of 32 percent, or $74, 176, compared to homes in a zip code without a “good” school, who have only seen an average return on investment of 27.5 percent, or $23,311.

 

Home Prices Rise 5.5% Year-to-Year

The report predicts that prices will see a 0.1% increase from July 2020 to August 2020, and a 0.6% increase from July 2020 to July 2021. Thanks to the COVID-19 pandemic, lower mortgage rates and a lack of inventory of for-sale homes, home price growth is rising at a rapid rate, the fastest rate in close to two years.

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