Do public school qualities drive housing value?
The relationship between school quality and housing price is highly complicated; better school quality could increase housing value, while it is also possible that better schools simply locate in better neighborhoods. However, it is true that homebuyers with kids try to search for neighborhoods with better public schools. Based on this demand, organizations such as the GreatSchools and the Stanford Center for Education Policy Analysis have evaluated schools based on academic performance and socio-economic composition of students. While they provide limited access to data, our urban research team presents our fine-grained data on public schools. Turn on the "School" option on our layer drop-down list.
By using data from the U.S. Department of Education, we evaluate 56,062 public schools based on the students' academic achievement level as well as their socio-economic status. We expect that our new feature would help real-estate agencies to readily understand the educational resources in each neighborhood. We further take advantage of the school districts and illustrate the areas with better public schools.
For example, the map below shows the spatial distribution of high schools (point) in Los Angeles-Long Beach-Anaheim MSA. The color of the points represents the score of each school evaluated by Market Stadium. In addition, we have the polygon which represents the school district boundary. Here, the color of the polygons is based on the average score of schools located within each boundary.
School District with darker green has a higher school rating
Are better schools correlated with higher housing value?
Using the score of schools evaluated by Market Stadium, we conducted a simple correlation analysis between the score of schools and median housing value. Since there is great heterogeneity in explaining housing value across MSA regions, we selected the case of Los Angeles-Long Beach-Anaheim MSA. Surprisingly, the score of schools solely explained 36% of the variation in housing value (i.e. correlation = 61%). While this may be the case for the Los Angeles region, we expect that the relationship between housing value and quality of schools would be robust.
This result implies that it is important to be aware of better public schools when making a real estate investment. By using our new feature on school quality, explore the areas of your focus regarding educational resources!
Best MSAs to find a good public school
In Huntington-Ashland, WV-KY-OH, for example, you are very likely to find a good public school. In detail, over 90 percent of the schools are rated in 1st Quantile (Q1) and 2nd Quantile (Q2). See the table below.
* Q1: 1st Quantile, Q2: 2nd Quantile, Q3: 3rd Quantile, Q4: 4th Quantile
The school feature will be updated annually based on the data provided by the U.S. Education Department.
Q & A?
Head of Urban Research
Doctoral student in Urban Planning at USC
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