The quality of nearby schools can significantly impact the price, value and demand of nearby properties. Understanding this connection is crucial for any homebuyer. For many parents, whether the house area has good schools for children is a key factor when choosing a home. Studies show that 84 percent of Canadian parents factor in schools when buying a new home. Even for those without children, knowing how school ratings affect home prices is essential. Today’s blog will explore the link between schools and real estate, revealing how living near highly rated schools can increase home values.
If you’re buying or selling, having a highly rated school nearby could increase your property’s value. A study by the New York Times found that a 5 percent improvement in school test scores in the United States could raise property prices by 2.5 percent. Even without considering school ratings, just living near a school can significantly impact property values due to the high demand for homes in well-regarded school districts. The school’s reputation and academic performance also play a crucial role. Highly regarded schools attract more buyers because parents want to provide their children with the best education possible. As a result, homes in these areas experience higher demand, leading to increased property values. Living near a school offers various resources, extracurricular activities and modern facilities that enhance home values. Homebuyers may seek out these neighbourhoods because well-equipped schools support a comprehensive educational experience and make the area more attractive to families. The convenience and proximity of schools are also key factors affecting home values. Families prefer neighbourhoods where the separation between homes is relatively short, making it a quick drive or enjoyable walk. Because of how school ratings impact home prices, investing in houses in these sought-after districts is often seen as a smart long-term investment strategy. Quality schools tend to maintain stability even during economic upheaval, making homes in these neighbourhoods more resilient to market fluctuations. This stability appeals to a variety of buyers, leading to increased demand and potential for higher returns on investment.
To highlight the benefits of living near a school, consider a study conducted by McMaster University and the University of Toronto. Researchers analyzed over 5,500 real estate transactions in Hamilton, focusing on homes within the city and their proximity to public schools in the Hamilton-Wentworth District School Board. Using a sample of properties, they estimated the value of various home features and determined how each feature contributes to property prices. Their findings revealed significant impacts: homes located farther from the closest elementary school saw a decrease in value by 7.29 percent for every additional kilometre and a 1.43 percent decrease for every added kilometre from a high school. This study was prompted by a series of school closures in Hamilton between 2005 and 2016, which included the closure of Prince Philip Elementary School in the Ainslie Wood neighbourhood. Due to local issues, students were relocated to Cootes Paradise Elementary School, resulting in longer travel distances for many families. The closure of Prince Philip affected every property in its vicinity to some extent, with homes losing up to 9 percent of their value. Although individual losses might have seemed small, collectively, researchers estimated a total devaluation of $4 million for homes in the area. This study underscores how the separation between homes and schools can affect property values near schools significantly.
Before you know it, kids will be heading back to class, wouldn’t it be nice to be conveniently located near one of the best schools in the region? Find a house in an area with a good school for your children just in time for back to school. Even if you don’t have kids, understanding how school ratings impact home prices can help increase your property value if you decide to sell. Trust McGarr Realty to help you navigate both buying and selling. View current listings and contact us today to begin your real estate journey.
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