Schools and home values revisited yet again...A couple buying a $300,000 home will have effective monthly housing costs of $1,326. Tack on $912 a month more for private school tuition (the national average, for one kid), and now you’re paying $2,238 for housing and school costs every month — enough to buy a $520,000 home in the same neighborhood. According to a recent analysis by Trulia, parents who think they’re coming out ahead by paying less for a home in a neighborhood with substandard schools and sending their kids to private school might want to run those numbers again. Don't forget the incidentals like gas or bus services, assorted fees, books, computers....and of course the fact that many private schools are not around the corner. Sleep overs, friends, activities are all "over there".
The report really doesn't break any new revelations, who doesn't understand the correlation between school performance and home values? This is especially true in metro Atlanta, we pointed out that schools are a major influence on home values in the Atlanta market in previous posts and track many of the local districts to compare trends. There "name" districts in the Atlanta metro market and those command a premium. Trulia found a GreatSchools rating of 9 or 10 correlates with a 32 percent higher price per square foot. Applying that premium to a 2,000-square-foot house valued at $300,000 would jack the price to $396,000. In zip codes in top-rated school districts (those with Great Schools ratings of 9 or 10), only 4 percent of kids go to private school, after adjusting for neighborhood demographics. But in other districts with Great School ratings of just 1 or 2, 18 percent of kids go to private schools.
The study is worth the time to read and as expected, there is a dissection of the the data studied that seems to be present in everything of late. As noted:
Let’s start with two essential facts about private schools, which explain a lot about who goes to private school:
- Essential fact #1: Just 20% of private school students attend non-sectarian schools; the other 80% are in religiously-affiliated private schools, of which half are Catholic.
- Essential fact #2: The cost of private schools is high, but varies widely. On average, tuition is almost $11,000, not counting discounts or scholarships. This ranges from $7,000 for Catholic schools and $9,000 for other religious schools to $22,000 for non-sectarian private schools. Tuition tops out at about $40,000 for the most expensive prep schools.
Given the high cost, kids from richer families are far more likely to go to private school than kids from poorer families. Only 6% of kids in households with incomes under $50,000 attend private schools, compared with 26% of kids in households with incomes of $200,000 or more. Education level, race, and ethnicity matter too. Even adjusting for income, kids whose parents have a college or graduate degree are much more likely to go to private school. Furthermore, non-Hispanic Whites are more likely to attend private school than African-Americans, Asian-Americans, or Hispanics with the same household income and parental education level.
So not much breaking news here but the report does get into specific parts of the country and looks into areas with the highest and lowest private school attendance rates. Georgia was not on either end of the scale. For metro areas, New Orleans has the highest rate at 25.1% of kids in private school while Fresno has the least at 3.7%. By "neighborhood" - aka area (not subdivision) the Monsey area of NYC has 86% of kids in private school. The report also looks at several other price and performance categories. Click here to read it - but the succinct point is...
In short, kids are more likely to attend private school if their family is rich, highly educated, non-Hispanic White, Catholic, orthodox Jewish, or Amish.
Yeah, Amish - who saw that coming?
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