What is the home price premium for a home zoned for a highly-ranked school?

Last week Redfin Blog, a national real estate market news and analysis site, released a report comparing home prices to the test scores of elementary schools across the country. You can check out Redfin’s report here: Affording a House in a Highly Ranked School Zone? It’s Elementary

Home sales price data came from MLS’s across the country. School rating data came GreatSchools.org and is based on each school’s state standardized test results compared to those of other schools in the state.

The Redfin report found that housing prices in the zones of highly rated public schools are remarkably higher than those served by lower rated schools. From the report:

While we expected to see higher prices for homes in highly-rated school zones, we didn’t expect the difference to be so large. In certain markets, the difference amounted to hundreds of thousands of dollars for similar homes in the same neighborhood.

The Redfin report was conducted at a national level. In order to see the differences that exist in our local market I ran a similar comparison on home prices to school ratings in Reno. As did the Redfin report, I looked at GreatSchools.org ratings for public elementary schools.

The GreatSchools website showed 42 public elementary schools in Reno, Nev. Of these the site provided ratings for 38 schools. These were the 38 elementary schools I tracked. The ratings provided by GreatSchools ranged from a low of 2 to a high of 10.

The Redfin report looked at home that sold between May 1 and July 31, 2013 to calculate median sale price and price per square foot of homes within each school zone. I used the same time frame for this analysis.

The table and charts below show the numbers for Reno’s public elementary schools. The trends are like those found by the Redfin report — perhaps with even starker differences.

GreatSchools rating Median Sales Price Median Sold PPSF
2 $93,000 $83.19
3 $110,250 $86.17
4 $100,000 $77.33
5 $152,000 $87.50
6 $172,000 $101.63
7 $186,000 $121.81
8 $181,900 $119.80
9 $241,500 $126.85
10 $434,250 $158.80

What is most striking is the premium paid for homes zoned for schools with the highest rating of 10. These median sales price for these homes is nearly 80 percent higher than the median price for homes zoned for schools rated 9; and 139 percent higher than homes zoned for schools rated 8.

greatschools ratings vs sales prices


  1. Lynne B

    I think this is a false equivalence. With almost no exception, schools are better in wealthier neighborhoods nationwide. Probably because parents who are themselves well educated and financially secure make darned sure the school is serving the needs of their children. In poor areas the opposite is true; there are more families where English is not the language spoke at home and parents working two or three jobs and hardly finding time to spend with their kids let alone organize “charity wine auctions” for their kid’s schools as they do at Caughlin Ranch Elementary

  2. Martin S.

    Very interesting observation on the large premium for the highest rating!

  3. Sully

    Sounds like the author of this report hasn’t heard of those ubiquitous pests known as “parents” – the ones that annoy you by telling you to do things you’d ordinarily try to avoid, such as homework. However, this fits right in with a realtors blog. It’s the house – not the people!!!!

  4. Zen

    Parents at successful schools in wealthier neighborhoods are forced to raise money for their school. These schools do not receive any Title 1 funds from the federal government like the struggling schools receive. The principals at these schools only have a small fraction of the funds at their disposal that the Title 1 schools have. As an example, the school that my kids went to had $34,000 dollars of discretionary funds for the principal to use for an entire school year for over 500 students. This money had to provide for the upkeep and purchasing of new copiers, computers, printers, paper, ink, school supplies, office supplies, playground equipment, art supplies, etc. I had one principal at another very successful school tell me that at her previous principal position in a local Title 1 elementary school, she had several hundred thousand dollars in funds at her disposal, mostly from the federal government. . I even had a teacher who taught at both types of schools tell me that the teachers at the Title 1 schools are better trained, because they have the money to pay for more teacher training.

    In the time I spent with my kids schools parent association for what would be considered a successful school, we purchased new playground equipment, new copiers, new drinking fountains, computers and smart-boards for the classrooms and provided funding for teacher training, etc. etc. The school district would not pay for any of these things, trust me on this, I went to them and asked. They gladly took our checks though when we wanted new playground equipment to replace the decades old playground equipment that was falling apart. We added about $90,000 per year to the $34,000 that the principal received from the school district. If you were in a Title 1 school though, the principal has far more money than we had provided to our school to purchase these things. It is a grueling task to put together the events and continually ask parents to donate to provide for the school, but without it the kids would be severely underserved. The school district and the federal government both know that parents in wealthier districts will not let their kids go to a school without the basic tools needed to provide a decent education and they take advantage of it.

    While money can certainly make a school better prepared to serve the children, a schools success is mostly determined by what happens at home. If the kids go home to a safe healthy environment with parents who value education and have the time and ability to make sure their kids are doing homework, preparing for exams and ready for a day at school, the child will usually succeed. If most of the kids show up to school prepared and ready for the day, with their homework done, then the teacher and the class as a whole will move forward and succeed. In an area with a majority of these homes, the school will succeed. If the opposite is true then the teacher and the class will struggle to get through the day and the year, and the school will perform poorly. What happens at homes of the children that attend a school determines the success of the school.

  5. Guy Johnson

    Thank you for your comment, Zen.

Leave a Reply

Your email address will not be published. Required fields are marked *