The Astronomical, Hidden Cost of Sending Kids to ‘Good’ Public Schools
The Astronomical, Hidden Cost of Sending Kids to ‘Good’ Public Schools
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It could cost you hundreds of thousands of dollars (gulp) to send your kid to public school—and that’s above and beyond the costs for things like supplies and extracurricular activities.
The reason: Homes in good public school districts—defined as districts with a minimum of one public school in which student test scores were at least one-third higher than the state average—cost 77% more than homes in average or below-average districts, according to data from real-estate research firm ATTOM Data Solutions.
The average home cost $427,402 in a good school district in July 2016, compared with $241,096 for other districts. ATTOM analyzed home prices and test scores in more than 4,400 zip codes in the U.S. for this study. “Towns with stronger public school systems will typically cost more to live in,” it says.
Let’s say you bought that $427,402 good-school-district home today, put down 10% buy it, and got a 30-year fixed rate mortgage on it at 3.2%. That house will cost you at total of nearly $600,000 over the life of the loan. On the other hand, if you bought the $241,096 mediocre-school-district house with a 10% down payment and the same loan terms, you’d end up only shelling out a total of about $340,000.
The reason homes in good school districts are more expensive is a function of supply and demand, explains Daren Blomquist, ATTOM’s senior vice president: “There’s more demand for these homes and that drives up the price for these homes.”
And the higher the value of your home, the more you pay in property taxes, says Blomquist; those in good school districts paid $3,867 versus $2,795 on average for those in less-good districts, the ATTOM analysis revealed. And for some those numbers are far higher: In Westchester, Nassau and Bergen counties—all of which are near New York City and are dotted with excellent public schools—property taxes average more than $8,500 a year, according to the Tax Policy Center.
Still, while rare, there are places where homes in good school districts are reasonably priced. Among the 10 zip codes with good schools that represent the best bargain home buying opportunities include zips in Chicago (60620); Cleveland (44125); Saginaw, Mich. (48602); Milwaukee (53209), Tampa-St. Petersburg, Fla. (33712), Orlando (32835), Las Vegas (89106); and Riverside-San Bernardino, Calif. (92277).
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