The higher the SAT scores, the more the house is worth
'As go the schools, so goes the real estate." This mantra among real estate brokers has long been a reality for both home-buyers and home-sellers.
But while a good school district has always been a powerful driver of housing costs in a neighborhood, never before has it been so easy to know how different districts compare.
Between the rise of the Internet and new laws that require more standardized testing and easier public access to test results, home-buyers can much more readily compare public schools.
Such was the experience of Jim and Karen Keefe. It made their move from New Jersey to Ohio the easiest yet for the couple.
"When we moved east seven years ago, the Internet was just emerging," says Karen. "This time around, I had so much at my fingertips."
Shortly after Jim accepted last year a position as vice president at a publishing company in northern Kentucky, Karen turned to the Web to scour for school districts across the Ohio River in Cincinnati.
With the click of a mouse, she found school statistics that resembled those of their competitive New Jersey district.
Housing markets used to be driven by word of mouth. Parents tended to rely on general reputation when it came to understanding which schools were performing best.
Now parents on the move are flocking to websites detailing student-performance statistics and district comparisons.
Homestore.com, which features such school reports, averaged 8.65 million unique users per month in 2004. Users surfed the site for about 300 million minutes in February 2005 alone, according to the most recent figures.
School information is the second-most popular feature after actual listings, according to Erin Campbell, corporate communications director.
Good schools have always been linked with higher home prices. But in some medium-size cities, the price difference between top-scoring and mediocre school districts can exceed $70,000.
In Cincinnati's Sycamore Community School District - where the Keefes eventually moved - the average home price is $182,438, compared with the neighboring Loveland school district, where houses sell on average for $106,580.
The price gap is in keeping with the scores. About 80 percent of Sycamore high school seniors last year took the SAT, averaging 579 in math and 566 in verbal, while 60 percent of Loveland seniors took the SAT, averaging 547 and 535, respectively.
Cities on the coasts and in Southern states like Florida and Texas have the largest gaps in home prices and test scores. In Brookline, Mass., for instance, an additional $250,000 means the difference between living in a top-notch versus mediocre school district.
The starting price for a three bedroom, two-bath house in Brookline is $700,000, says Kathleen Alexander, a realtor at Century 21 Cityside. But one of the "best-kept secrets," according to Ms. Alexander, is the nearby Melrose-Stoneham area, where a comparable house sells for $450,000.
The difference? The caliber of the schools in the different neighborhoods. Brookline High School scored significantly higher on the 2004 SAT test than Melrose High School. Average scores at Brookline were 578 on the verbal portion of the test, and 598 on the math; at Melrose High they were 519 and 513, respectively.
But statistics on school districts get mixed with other concerns, says Eric Belsky, executive director of the Joint Center for Housing Studies at Harvard University. It has to do with "social capital" - the contacts and connections people foster. Home-buyers tend to associate test scores with social capital, says Mr. Belsky, and standardized testing becomes a "shorthand way to make a judgment."
Down the street from the Keefes' new home in Cincinnati lives Rick Friedman, a corporate headhunter and self-described "school activist." As part of his job recruiting new workers into the city, he follows test scores and school districts closely.
It's all related, says Mr. Friedman. "Better-paid teachers yield better overall teachers. Better teachers yield better students. Better students yield higher scores. Higher scores yield a greater demand for people moving into the district."