Impact of School Quality on Housing Value

Elementary school test scores play a significant role in predicting the sales price of neighborhood homes. A 2009 TRF study revealed that on average, every incremental improvement of school quality resulted in a home sales price increase of $0.52 per square foot. For a 900-square-foot home, a 10-point increase in school quality translated into a $4,500 increase in sales price.

The study, funded by the William Penn Foundation, was the first of its kind to look at schools on a very local level across entire districts, controlling for neighborhood and individual home conditions. Recognizing that schools play an important role in the buying and selling decisions of many families, TRF’s research examined the influence of elementary school quality on the sales price of homes in surrounding neighborhoods. The study also sought to examine the extent to which schools could be a vehicle for economic development.

The connection between school and neighborhood quality has long been assumed.  However, there was little objective and systematic data to support this assumption. TRF’s innovative analysis allows researchers and policymakers to set an actual dollar value on the relationship between the two factors from an evidence-based perspective. Understanding the economic value of improved school quality can be valuable to any comprehensive attempt to develop better schools and ultimately, stronger neighborhoods.

Click here to read a brief on the study.