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I found a huge gorgeous home in a beautiful area but unfortunately the school system that serves the area is not ranked good at all.
I've been told not to buy in a bad school district since I won't be able to sell it for as much as if it were in a more upmarket area, which is true. But I will also spend MUCH less money when I buy the house to begin with, so it makes up for each other.
I can just spend the amount that I would save when I buy the house in the bad district and do something productive with it like investing it wisely or use it for private school when I have kids.
Plus, what's the point in buying in a good school system when you don't know what the school system will be like in 20 or 30 years. There have been places that have drastically fell in the rankings.
Last edited by Guidance100; 06-01-2013 at 04:36 PM..
It's fine. If the price is right, you like the neighborhood, you like the house, and you dont care about the school system, then buy it. If I didn't need a good school system, I would be living somewhere else too. Why pay a lot for a house and property taxes if you dont even plan to use the school system? As you said, the sale price is all relative.
I bought my house--in a district with fair-mediocre schools--in 1996, for $210k.
Today, based on recent comp sales in my neighborhood, I could sell it for more than $460k.
So, I would say that you can still make a decent profit on a home sale--regardless of school district--if you have a sufficient time frame for the resale.
Yes, there are districts that have drastically fallen in the rankings, but nobody can predict the future with any significant accuracy.
The only problem is that when you sell it, the buyers will have all of the same concerns as you do. People seem to forget the reason they got a "good deal" when they bought when it comes time to sell.
But one point about you investing the money that you would save. What you are doing is buy a "low quality 'investment'" (the home), on margin (only 20% down if you are smart), so you can invest the money you save in a better investment? So if you believe that your house will grow at a slower rate than the house in the good district, then you are making a poor investment choice. Of course a home is not technically an investment. The house depreciates in value. The land that the house is on can be considered the investment (it you really have to consider something to be)
I would agree with you if you were buying a smaller house in a good district vs a larger house in a small district because you didn't really need the space
I bought my house--in a district with fair-mediocre schools--in 1996, for $210k.
Today, based on recent comp sales in my neighborhood, I could sell it for more than $460k.
So, I would say that you can still make a decent profit on a home sale--regardless of school district--if you have a sufficient time frame for the resale.
Yes, there are districts that have drastically fallen in the rankings, but nobody can predict the future with any significant accuracy.
How much would a house bought for in 1996 in a good school system sell for today?
I just looked for one in Summit that sold in 1996 (very late in the year) and then again in 2012 (in the beginning and summit is up over last year). Found one on Madison Ave (sure people can find it if they want). It sold for $220K in 1996 and $557.5K in 2012. Only one point, so take it for what it is.
And no offense, I truly hope your house is worth $460K, but home earners tend to over estimate their own house when they want to sell (I know I have in the past, even with a bunch of comp sales)
If you send your kids to a mediocre school district they will become stupid and lose IQ points - at least that is what some on here will have you believe.
Parenting > Schools
Escape the facade of Generation X parents pawning their poor parenting on school districts.
I found a gorgeous home in a beautiful area but unfortunately the school system that serves the area is not good at all.
I've been told not to buy in a bad school district since I won't be able to sell it for as much as if it were in a more upmarket area, which is true. But I will also spend MUCH less money when I buy the house to begin with, so it makes up for each other.
I can just spend the amount that I would save when I buy the house in the bad district and do something productive with it like investing it wisely.
Plus, what's the point in buying in a good school system when you don't know what the school system will be like in 20 or 30 years. There have been places that have drastically fell in the rankings.
Not only will the home cost less, (both when purchasing and selling) but it is harder to sell a home in a bad school district. This is especially true if the home is more of a "family sized", rather than a "starter", or "retirement" sized. People with kids typically want good school districts, and those who do not care about the schools are those without kids, who typically will not want, or can not afford, a larger home. I'd also be cautious about buying the best/largest/most expensive home in the neighborhood, as they also make it harder to sell. (The adage is buy the "worst" home in the best neighborhood...) One of the reasons the home in a poor school district costs less, is that there simply is not a demand/market for those homes. They typically sit on the market for far longer, you likely won't see bidding wars or even multiple offers on a home. It also impacts your actual selling price, not just the listing price. A home in say Millburn or Chatham, will move quickly, and for at least close to actual listing price, if it not higher - bidding wars are not uncommon. The same cannot be said for towns with bad schools.
The home in a good school district will tend to better keep their value than one in a poor district. When the housing market fell so dramatically recently, the sale prices for home in the "good districts" saw significantly less of a decline. Home prices in every county fell year-over-year through the second quarter of 2012, which caused the statewide median home price to drop from $339,000 in 2005 to $251,000 in 2011 — indicating homes throughout New Jersey were sold last year at prices nearly 75 percent of their 2005 levels. While in the top school districts the hit was around 11%.
While there are districts that do fall in the rankings, a top notch school system does not become a bad one overnight, or even in a couple of years. Homeowners will have plenty of warning before their formerly good district would be classified as undesirable. In NJ your good school districts may change a few # in the rankings year to year, but they will remain good. I do not recall that there have been any districts that ranked in the top, say 75, that the following year or five have fallen into the bottom half in the rankings. And if you look at the rankings from 20 or thirty years ago, the top schools will be primarily the same bunch you see today. There tends to be more movement in the "average" school districts rankings...both upwards as well as downwards. A mid ranked school 20 years ago may now be good, great or really bad. "Bad" schools districts rarely ever get much better, some do improve, but...those at the bottom of the rankings stay in the bottom 25%.
I found a huge gorgeous home in a beautiful area but unfortunately the school system that serves the area is not ranked good at all.
I've been told not to buy in a bad school district since I won't be able to sell it for as much as if it were in a more upmarket area, which is true. But I will also spend MUCH less money when I buy the house to begin with, so it makes up for each other.
I can just spend the amount that I would save when I buy the house in the bad district and do something productive with it like investing it wisely or use it for private school when I have kids.
Plus, what's the point in buying in a good school system when you don't know what the school system will be like in 20 or 30 years. There have been places that have drastically fell in the rankings.
In the car business there is a saying, "There is an ass for every seat". If you like the home, buy it. When it comes time to sell, whenever that is, your potential buyers presumably will see the same value you will.
The school hard on is caused by the south/east asians that post here frequently.
I'm curious, what township are you looking at purchasing. I want to lol when you give me the name of a great community that the school nazis here claim as substandard.
Yeah, it would kind of help if you stated what town this house is in.
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