Nothing seems to evoke more controversy in the real estate world then schools and school systems. For decades several small, very famous, boutique school systems had a chokehold over the Westchester market. If you were in the right zip code, you could name your price. If you weren't, your home could be worth half as much. This, in spite of the fact that there are many very well regarded school districts in Westchester County. But a school district that ranks only in the top 10-15% in the nation is going to pale in comparison to a district in the top 1%.
Parents have heard what they have heard through the grapevine and when they find that they are priced out of the toniest school systems, they write an entire county off their list. All of this is further complicated by steering laws that handcuff agents from speaking out FOR good school systems that have lower test scores simply due to a more diverse population.
Don't get me wrong. I fully understand why parents want the best for their children. Certainly, there are plenty of bad school districts in the United States. However, the notion that an entire school system can be judged by standardized test scores and that only the elite few school districts in the nation are worth attending has created a "manufactured" affordability crunch. At least in my neck of the woods, the school system arms race has been on steroids.
The new tax laws are pricing a lot more people out of these most exclusive school districts. With median taxes for some of these zip codes pushing up to $40k a year and beyond, the loss of local and state tax deductions over $10k/year is a heavy blow.
But perhaps this will have the unexpected result of broadening the market. What I found was that families who could squeeze by in these high-tax/high price areas tended not to question the value of these small slivers of real estate. This may not have made as much sense as these home buyers thought. First, it generally takes two partners to maintain a home with this overhead. Someone loses a job (either one) and they are immediately house-poor. Second, the sheer amount of money locked into the cost of living has to take a bite out of other things, like retirement, family trips, and other lifestyle issues that make life worth living.
There are still places where first-time buyers can purchase an entry level starter home without breaking the bank. There are even places where you can have your larger family home without paying almost $50k a year on property taxes.
After all, when a $1 million house is essentially the same house as a $700,000 house less than a mile away, one has to ask whether the price tag is really worth it. But when no one questions it, the home may well be the better overall value is never even considered.
The new tax laws may force this issue and return our market to the more level playing field it enjoyed in the past. A situation where Westchester's school districts are judged by the quality of their teachers and not by a scorecard of testing averages. Maybe it is time for those moving to Westchester to embrace diverse school systems and at each one a bit more carefully.