School systems bolster home price in some areas

There are many different factors that can impact where prospective buyers purchase property, and one in particular is local school systems.

There are many different factors that can impact where prospective buyers purchase property, and one in particular is local school systems.

This is especially true for households that still have children that need to get through elementary, middle and high school, according to a report from Trulia. In the wake of the recession, many parents can't afford to send their children to private schools that offer top-notch education, so buying property in areas with highly ranked public schools has become very important.

The most appealing real estate market based on this factor is the Saratoga Union district just outside of San Jose, California, the report said. Currently, for every preschool-age child in this area, there are 2.38 elementary school students, based on Census Bureau data.

"If families never moved, then the number of 5-to-9-year-olds would be very close to the number of 0-to-4-year-olds in an area, and the ratio would be very close to 1," said Trulia chief economist Jed Kolko.

Experts claim the higher this ratio, the more desirable the school district becomes and can subsequently push property values upward.

Local home prices still high

The San Jose housing market is a key area that emerged from the real estate bubble burst relatively unscathed. Contributing to this immunity was neighboring Silicon Valley, which offers promising job prospects paired with high income levels. As a result, at the end of July, public property data indicated the median price for square foot in San Jose was more than $600.

Despite high price points, households continue to shell out considerable amounts of money just so their children can have access to premier public education.

Additional school districts catching the eyes of households include the Lovejoy Independent School District in Dallas, Cold Spring Harbor Central School District in the New York City-area, Glencoe School District 35 in Chicago and San Marino Unified School District in Los Angeles.

Mortgage rates providing options

Although home prices in the nation's best school district can be high, a recent decline in fixed mortgage rates could make financing the purchase of a home in one of these areas very affordable to consumers.

During the week ending August 30, the average rate for a 30-year FRM fell to 3.59 percent, while 15-year FRMs averaged 2.86 percent, which was also a decline from the previous week, according to a report from Freddie Mac. Last year at this time, the rates averaged 4.22 and 3.39 percent, respectively.



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