How School Ratings Alter Portland Home Values in 2021
Whether you’re buying or selling, the school district of the home in question will inevitably come into play. A home’s value is assessed both prior to listing and prior to sale. For more information on this see our explanation of inspection versus appraisal. The long and short of it is: school ratings are murky territory. Schools don’t exactly get appraised the way a home does. But they do affect a home’s value. Let’s take a look at how that works and how you can better traverse the murky.
1. What Constitutes a High-Ranking School?
First we’ll start off with the basics. What does a high-ranking school even mean? Well, that’s part of the problem. How a school becomes ranked isn’t exactly codified. Without doubt, standardized test scores come into play. They are the easiest way to quickly assess how a school is performing, but they also don’t tell the whole story.
Using a variety of metrics, GreatSchools is an excellent resource for checking out what the schools in your desired neighborhoods are. You can examine anything from the diversity of the school’s population to the percentage of children with disabilities who are disciplined (in comparison with their peers). This website won’t tell you everything – nothing will. But it will at the least paint a picture of how others in the neighborhood feel about the school system. Given how nebulous the effect of local schools is on property values, and how many factors come into buying a home, it’s useful to just see a number.
2. How Do School Ratings Affect Property Values?
Okay, we’ve already claimed this as a nebulous affair. So why bother trying to figure it out at all? Well, this may seem obvious, but the process of buying a home can become fear-based. With such a monumental decision to make, the stakes are high. Those with children or planning to do so will want to make sure their kids have good schools to attend. And like it or not, those without children will want to make sure their property values increase over time, and the quality of schools affects that.
In 2018, Realtor.com determined that 78% of buyers went without desired features in order to enter a higher rated school district. So inevitably that will drive up prices – think square footage, updates, number of bedrooms. The most common things to forego were updated kitchens, large backyards, and garages.
While hard, up-to-the-minute data is hard to come by, it’s also worth looking at long term trends. A 2012 report by the Brookings Institute showed that home values near high-scoring schools in the 100 largest US metro areas correlated with home values that were, on average, 205,000 higher in value. We can only imagine that this disparity has increased over time with inflation. And a report from the National Bureau of Economic Research determined that every dollar spent per pupil in additional taxes raised home values by $20. It should follow, then, that districts with higher tax brackets and more school spending will also boost property values (and with that, taxes).
3. How Has the Pandemic Affected School Ratings in Portland?
Now for the elephant in the room. The honest answer is that we don’t know yet. The pandemic has thrown the entire Portland real estate market into uncertainty. How schools handle things in normal times is highly dependent on individual teachers and administrators. In a time of such great turmoil, the differences in quality may become much more evident – but there’s no numerical assessment. We’ll have to wait and see how reviews come in, how word of mouth travels, and how students perform on standardized tests following remote learning.
4. Can Your Realtor Advise You on Schools?
No. It is legally impossible for a Realtor to guide you toward a particular school, a practice referred to as “steering.” These restrictions are in place to protect the community from polarization in the form of racism and economic inequality. So your real estate agent will not be able to simply tell you where the “best” schools are. And in fact, you might find that many schools that don’t rate the highest are staffed by competent and caring individuals. The dedication of individual educators makes a huge difference, and that’s something the buyer will have to seek out and determine on their own to an extent. There’s good news, though. The internet being what it is, plenty of good advice exists out there to help you out.
5. How Do I Find Out More about My School District?
Okay, then how does a buyer navigate this situation, if the real estate agent is unable to advise them? The best thing you can do is know where to look to figure out what schools are available to you. If you’re planning to view a home, you can use Portland Public Schools’ search tool to find out what schools serve that address. We also recommend checking out portlandmaps.com, which allows you to search for any address in Portland. On the right hand side you’ll see a drop down menu that will allow you to search for nearby schools. This can be particularly helpful for anyone interested in private schools.
We mentioned GreatSchools above, but there are other tools out there when you’re trying to get the gauge of a school near where you want to buy. The Oregon Department of Education provides report cards – simply look up the school and you’ll be able to read all of their information. Generally they provide “At-A-Glance Profiles” – for this past year those have been amended to include the word “Adapted.” Meaning, the data from this year is a little different than from most years because of the pandemic. But looking at the difference between this past year and prior years might be illuminating in the end.
Looking to Buy a Home in Portland? Reach Out Today!
While it is true, yes, that we can’t directly advise you on schools, we can get a feel for what it is you’re looking for and point you to related public data. In fact, that’s our specialty, and we’re one of the most experienced teams you’ll find in the city. Contact our top 1% buyer’s team, which prioritizes customer service and is full of top-ranked, local industry veterans ready to help you find the home of your dreams.March 17, 2021