Portland School Ratings Change Home Values

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Updated 05/2023.

Several considerations factor into buying a home, and local school districts might play a part in your decision-making process. The reason being: school rankings impact home values.

New home buyers are sometimes confused about the difference between a home inspection and a home appraisal. An initial inspection is typically done to find any repairs that are necessary in order for a sale to go through. A home’s value is assessed and appraised both before listing and before the final sale. For more information on this, read our article on the differences between inspections and appraisals.

While school rankings aren’t directly taken into account by appraisers and assessors, they do affect a home’s value. So, how does a school’s ranking figure into it all?

Before we get to that, let’s get clear on what a school ranking is.

What Makes a School Ranking?

First off, we’ll say that school rankings are somewhat arbitrary. There is no overarching, prescribed process or method to determine school rankings, and no one entity or organization is responsible for determining these rankings.

Greatschools.org (Non-Profit)

However, greatschools.org is a resource for finding U.S. school rankings. They’re an independent nonprofit with a stated mission to help parents provide the best possible educations for their kids. Always finding better methods and criteria to give the most accurate information, they collect data on a variety of data points, not just test scores. The data comes from a variety of sources, including state and federal departments of education. They also look at student progress from the beginning of the school year to the end, college readiness ratings for high schools, and equity ratings to see how schools serve the development of disadvantaged kids, and more.

While it isn’t the final word on the quality of any school, Great Schools is an excellent resource to help you sort out school rankings in any neighborhood, based on their 10-point scale.

Learn more about how greatschools.com acquires and assesses data for school rankings.

Oregon Report Cards

The Oregon Department of Education (ODE) also “rates” every school in the state. It does this by producing a report card and ranking the public schools in Oregon by a number of different factors. These include class size, attendance, and performance in various subjects, among other factors.

You can see the official Oregon school report cards website here. Or go here to directly type in the Oregon school you’re researching. The ODE report covers a range of data, from subjective information provided by schools to objective data from test scores and demographics.

U.S. News & World Report

The U.S. News & World Report produces a national list of schools that are ranked within their respective states. Their metrics focus on objective data like test scores, graduation, and preparation for higher education. The school rankings omit some subjective data and the interface is not as user-friendly as Greatschools, but it is a good source of helpful information on individual schools.

Schooldigger.com

Schooldigger.com is another site that aggregates a large amount of data to profile schools across the country. It is one of the school rating sites recommended by the National Association of Realtors (NAR) for discovering more information about school districts in areas where you may be looking for a home. Like the sites above, it provides a comprehensive summary of each school. A drawback is users are confronted with ads unless they subscribe.

How do School Rankings Affect Home Values?

When people are focused on their kids’ educations, they’ll make concessions on home features.

According to the National Association of Realtors (NAR) 2022 Buyers and Sellers Report, more than half of buyers with children under 18 years old stated that an important influencing factor in their decision when buying a home was schools. The report goes on to say that the most common compromise was the price of the home with the condition of the home coming in second.

This maintains the 2018 report released by Realtor.com, which stated that 78% of buyers chose to forego garages, large back yards, and updated kitchens in favor of highly ranked schools. It is obvious that more often than not, quality schools factor into the home buying decision for those with children.

Parents aren’t the only ones who care about school rankings when buying a home. Even those without kids sometimes base their decision on school rankings because they know these increase the chances of getting a higher price in a future home sale. So, when anticipating the ROI of their purchase, this factor plays an important part in their home buying decision-making process, as well.

While current, hard data is difficult to locate, in an effort to find some kind of correlation between schools and home prices, we looked at an Education Data Initiative report on spending per student along with a report from Housing Matters, an Urban Institute Initiative, which revealed that a 1% increase in school spending causes a 1.03% net increase on house prices. In a $500,000 home sale, this could potentially provide a home seller with a net return of $5,000.

Pairing these findings with the reality that property taxes are currently higher than ever here in Portland, and the potential correlation becomes clear. Though property taxes continue to increase, Oregon is spending less per student than the national average. Spending is slowly increasing however, and though levels are below the national average, Oregon is still listed among the top ten states for school spending, according to the Education Data Initiative Article cited above. Overall, the data suggests that school spending is related to higher school rankings, which then correspond to higher area home values.

Can You ask Your Realtor to Advise You on Schools?

No. It is illegal for a Realtor to guide you toward a particular school, a practice sometimes called “steering.” These laws are meant to protect communities from division in the form of racism and economic inequality. Realtors can point you to resources, but you’ll have to perform your own research.

The truth is, you might find that many schools that don’t rate the highest are staffed by dedicated, caring educators, which can make all the different in a child’s level of success. As a buyer, that’s something you’ll have to seek out and determine on your own. Fortunately, there are ways to gather plenty of good information about schools in the Portland area.

How Do I Learn More about My School District?

If you’re planning to view a home, consider using the Portland Public Schools’ search tool to find out which schools serve the address you’re interested in. Portlandmaps.com is also a great resource. There you can search for any address in Portland. On the right hand side, there’s a drop down menu where you can search for nearby public and private schools. Then, don’t be shy! Contact the school to see if you can set up a tour or talk with a point person on staff.

As we mentioned above, Great Schools is an excellent resource. There are other tools available, as well, like the Oregon Department of Education, which provides report cards on schools. Simply search for the school near the home you want to buy, and you’ll be able to access “At-A-Glance Profiles.” Due to the pandemic, they also provided “Adapted-At-A-Glance Profiles” for the 2019-2020 school year to allow for alterations in previous data.

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