You've heard that location is the most important thing to consider when buying a home? New research says that may be true only if that location happens to be in a good school district. Homes in the best districts sell faster and for nearly 50 percent more than the average house.
A study by Realtor.com looked at all open real estate listings at the end of July and compared listing prices in school districts that commanded the top two ratings from GreatSchools.org. The result was noteworthy.
Homes in great school districts -- ranking a 9 or 10 on Great School's 10-point scale -- commanded an average price of $400,000 compared with the national median price of $269,000. Homes in poor school districts sold at a near 16 percent discount to the national median price, or $225,000 on average, according to the study.
"Our analysis quantifies just how good it is to be a seller in a good school district," said Javiar Vivas, research analyst for Realtor.com.
If you have school-aged children, there's a practical reason for the disparity. Sending your kids to private schools can cost a fortune. Private School Review estimates that the average cost of sending a child to private grammar school is $8,522 per year, while private high school tuition runs nearly $13,000 per year.
Assuming one child goes to private schools from kindergarten through 12th grade, that adds up to $128,510 per child -- almost exactly the same as the disparity in median home prices.
Based on those medians, a family that would otherwise send two or more children to private schools would be far better off paying up for a home in a better school district instead. However, both the Realtor.com data and the data on private schools reveak wide disparities in how much private schools cost from region to region -- and how much of a premium you can expect to pay for a home in a good school district.
The towns with the highest average private school tuition? Top-ranked is Palo Alto, California, where it costs an average of $28,702 per year to send a child to private school. New York pulls down the second-highest cost at $25,398. Washington, D.C., is third at $24,455. San Rafael, California, is fourth at $23,933. And Bethesda, Maryland, rounds out the top-five costliest cities for private school tuition, coming in at $23,480 on average.
The school district that commands the largest premium home price is in Beverly Hills, California, where the median home sells for an astounding $3.8 million, or 689 percent more than the $550,000 median home price in Los Angeles county.
Highland Park Independent School District in Texas ranked second, with average home prices at $1.8 million. That district commands a 632 percent premium over the average home in nearby Dallas ($277,000).
Other school districts that commanded the top premiums compared to their geographic medians:
3. Kenilworth School District 38, where homes sell for 606 percent more than the average in Kenilworth, Illinois.
4. Indian Hill Exempted Village School District, where homes sell for 600 percent more than those in other parts of Hamilton, Ohio.
5. Winnetka School District 36, where houses sell for 521 percent more than in other parts of Cook County, Illinois.
6. Manhattan Beach Unified School District, where homes sell for 520 percent more than the Los Angeles, California, average.
7. Scarsdale Union Free School District, where homes sell for 516 percent more than in other parts of Westchester, New York.
8. Saddle River School District, where homes sell for 478 percent more than in other parts of Bergen, New Jersey.
9. San Marino Unified School District, where homes sell for a 469 percent premium compared with other parts of Los Angeles county.
10. Mariemont City School District, where homes sell for 468 percent more than in other parts of Hamilton, Ohio.
If you want to check out the how your community ranks, check out Realtor.com's full listing here.