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Does the neighborhood make the grade?
That old wisdom to buy where the schools are good still holds true, perhaps now more than ever.
April 4, 2005: 8:56 AM EDT
By Sarah Max, CNN/Money senior writer

SALEM, Ore. (CNN/Money) - Homebuying hits high season in the spring as parents of school-age children rush to time their move with summer break.

Among these buyers, student-to-teacher ratios and test scores are as essential as square footage and closet space, say agents. In fact, parents seem as determined as ever to get their kids in the best schools, and they're willing to pay a premium to do so.

"If they're relocating to the area, quality schools is the first thing out of their mouths," said Rachel Herbert with Coldwell Banker in Fort Lauderdale, Fla. "Right now all of our prices are up, but in areas where schools are rated "A" by the state, houses are selling faster and for more money."

Education is so important, say agents, that buyers without children should sit up and pay more attention to school.

"By going in areas where the schools are not as strong, you're essentially cutting out a potential group of buyers," , said RealEstate.com general manager Jeff Lyons.

In his hometown, Charlotte, N.C., houses in school zones with higher test scores sold for an average of 12 percent more than similar houses in areas with lower test scores, based on research by UCLA and Dartmouth for sales between 1994 and 2001. That discrepancy is likely to be even greater today.

In the suburbs of Columbus, Ohio, buyers might pay as much as 25 percent more for a house in a desirable school zone, according to Jill Rudler, a real estate agent with HER Real Living. "I've always looked for property in areas where the schools are improving," she said. "I'm willing to pay a little more in taxes to ensure that my investment is solid."

Some notable exceptions

While school rules in some markets, in adult communities, second home markets and luxury markets where buyers are likely to send their kids to private school public schools aren't as big a priority.

"The market is becoming segmented and I think it's going to continue," said Rudler. Empty nesters and retirees are moving out of their old neighborhoods to golf course communities or condos in more central locations.

They might be spending more on the house itself, but they're conscious of managing fixed costs over the long run. "They're specifically targeting areas where property taxes are lower and hence the schools are not as good."

The same is true in South Florida. "We are divided into the areas near the water and the suburbs," said Herbert, explaining that neighborhoods near the water attract more empty nesters, international buyers, and second or third homeowners. "Some of our most luxurious developments are not in the greatest school districts."

Ocean views might be more important than test scores in some markets, but real estate agents say that it's always prudent to ask about school quality, regardless of your price point.

In New York City, parents who could afford to send their children to private schools are still bent on buying into top public schools.

"I was just working with a family looking for property in the $5 million range," said Meris Blumstein, a real estate agent with the Corcoran Group. "They insisted on being in a particular school district. That was their first criterion."

"The private schools get harder and harder to get into," she explained. "If you're in a good public school at least you have that to fall back on."

Crash course on school quality

Even as more emphasis shifts to schools, real estate agents are shying away from handing out school stats or acting as school advisors. Many agents don't want to be held liable if buyers hinge a decision on school quality only to find out that a district is being rezoned or that last year's high test scores were just a fluke.

You may need to track down school report cards on your own.

Depending on where you live, statistics about local schools should be available from your local school district or your state. School data is also available online, for free, on such sites as GreatSchools.net and HomeGain.com.

Keep in mind that there are nuances within a city and school district, said Lyons. In fact, if you have school-age children, it's not a bad idea to visit the schools in person.

Local scuttlebutt might also factor into your decision.

"It is word of mouth to some degree," said Rudler. "A lot of buyers who come to town and they go where their employers tell them to go."

That may not be the most accurate way to measure a school, but reputation does count for something, at least when it comes to resale.  Top of page

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