By: Chad Hartley
Chad Hartley is our guest blogger today; he’s the founder of Land Elements, a land use information and consulting firm specializing in site evaluation strategies for clients worldwide. You’ll see him check in here occasionally at the HouseFront Blog.
Marc, a friend of mine, recently mentioned houses located near schools sell at a higher price than other homes in the same neighborhood. At first his reasoning made sense to me. There seems to be a perceived value and a certain sense of nostalgia when families live close enough to walk their children to school in this day and age. Marc told me schools are increasingly becoming hubs of the community, often used for neighborhood and civic meetings during evenings and weekends. He argued that there is economic value in living near centers of activity. In addition, schools are usually an indicator of neighborhood stability and can provide areas of open space and recreation for nearby residents. All of these points seemed to make sense.
To test Marc’s theory our company, Land Elements, Inc., performed an analysis to determine if the sales of single-family residential homes near schools actually sell at a higher price than others in the same neighborhood. Selling prices per square foot were calculated for homes within eleven (11) sub-market areas in the greater Tucson, AZ metropolitan area. Sales data were gathered from the Pima County Assessor’s office for qualified sales transactions for single-family sales recorded within 2006. The analysis was based on the following qualifications:
· Only sales greater than $10,000 were used to help eliminate non-arm’s length transactions
· All sales between known related parties were not included
· Both median and average sales price per square foot were calculated to find potential anomalies and provide an accurate analysis of the sales data
· Sales data are for Single Family residential properties only (according to the Pima County Assessor office)
Homes Near Schools Actually Do Sell For Less
Based on the analysis for all of Pima County, living within a quarter-mile of any school actually adversely affects the selling price of a home. The average sales price for the entire market area decreased by an average of $10 per square foot when located within a quarter mile from any type of school. That means, on average, a typical 2,500 square foot home located within 1/4 mile of a school sells for $25,000 less than an identical home located at least a quarter mile away from the same school. This represents a 6% average reduction in price.
Tucson, AZ Single Family Residential Average Selling Price per Square Foot (2006)*
Tucson, AZ Comparison of Single Family Residential Homes within ¼ mile of a school*
What’s Going On?
One possible cause for the lower sales price for single family homes near schools is that some schools can be located on relatively busy streets (collector or minor arterials). Prospective buyers of single family homes might place a higher value in living on a quiet residential street rather than confronting after school traffic, buses, and the overall busier streets near schools.
Another possibility is many prospective home buyers do not want kids ‘hanging out’, riding skateboards, or taking part in other non-productive activities near their house after school. Although the analysis did not differentiate between elementary, middle, and high schools, it would be interesting to see if sales prices near high schools decreased at a greater rate than other types of schools.
For more information on Land Elements, visit LandElementsInc.com
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