Restless: Homes near good schools cost twice as much, and two-thirds of those neighborhoods are unaffordable

Scroll down for a clickable version of this map.
Scroll down for a clickable version of this map.

If you want to know why home prices are out of whack in America, look at our lousy schools.

One oft-overlooked element of home pricing is the scarcity of good public schools in America.  Overlooked by everyone except young families, of course, who know quite well how much good “free” schools cost.

In plenty of Americans towns and cities, parents feel the public schools aren’t good enough for their kids, so they spend anywhere from $5,000-$25,000 annually — per child — on a private school.  Quick math will tell you that buying a home in a good school district is worth its weight in gold. Econ 101 tells you that home prices in districts with good schools soar as parents try to fight their way in.

Here’s another big reason American families are restless. They must navigate a terribly unfair Catch-22 — either they stretch their budgets to afford a home near good schools; or buy a more affordable home and pay for private school.

Now I have some data to prove it, courtesy of the folks at RealtyTrac. The firm analyzed school test scores for nearly 27,000 elementary schools in more than 7,200 U.S. zip codes, along with home price affordability in those same zip codes. (Good schools were derived from Department of Education data, and ranked at least one-third higher than average on test scores.) The result: surprise! In two-thirds of zip codes that had at least one “good” school, average wage earners would be forced to spend more than one-third their income to buy a median priced home.  Or as I like to say, average people with average incomes can’t afford average homes, a sign of a broken market.  Meanwhile, the median sales price of homes in areas with good schools was DOUBLE the price of homes not near good schools ($411,573 vs $210,662).

Below, you’ll see a chart of 10 zip codes where home prices are low relative to wages, but there are good schools nearby. Below that is a clickable, national map that you can use to explore the data yourself.  If for some reason you have trouble loading the map, click here.

affordable good schools

*Includes zips with at least one good school (defined as having a 2014 test score at least one-third higher than the state average) and with affordable homes (where buying a median priced home requires one-third or less of the average wage-earner’s income). Only most affordable zip code from each state is listed. States with no good schools in affordable zip codes or insufficient home price data were not included. Sources: RealtyTrac, BLS, State Depts. of Education.

Like what you are reading? Support me by signing up for my email newsletter or clicking on an advertisement and patronizing a sponsor.



Don’t miss a post. Sign up for my newsletter

About Bob Sullivan 1648 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

Be the first to comment

Leave a Reply

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.