“An investment in knowledge always pays the best interest” — Benjamin Franklin
There are no two ways about it: investment in education is a winner from any angle, but it’s particularly critical to the real estate market. As one of the communities of Sarasota realtors, in my real estate business I see firsthand the value of good schools add to Sarasota investment property prices and the positive impact that has on communities as a whole.
“Grade A Schools can add about 10% to the property value of the area” — Northwestern University Study
The National Education Association (NEA) states that there is a correlation between successful students and the economic vitality of a community. I want to take that a step further by saying that great schools, which are a product of great teachers and administrators, help maintain the stability of a local real estate market.
As Sarasota realtors know, a good school system correlates almost exactly with a better-than-average real estate market, it’s simple supply and demand: areas with good schools are automatically in demand so prices go up. The recent US census illuminates this fact clearly as it shows over and over again; the areas with the highest spending on schools also have the highest property values, making education our most important Sarasota property investment.
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Spending on Education Equals Better Communities
The city of Greenburgh, NY is the highest spending city in the country on its schools, and also has the highest percent of people with a bachelor’s degree or higher, some of the highest incomes in the country, and of course, very high property values.
New York State as a whole has a 70% higher spending on education than the rest of the country, and as a result, it’s able to attract top teachers and administrators, thus improving its schools and its real estate prices at the same time. As Illinois State Representative Karen Yarborough reiterates in this Chicagomag article on the link between housing and schools:
“There are two basic building blocks of healthy communities: good schools and good housing” — Sarasota People: Leading the Way in Funding their Schools
Sarasota is also a great example, as the citizens of Sarasota have passed their second referendum increasing taxation in order to pour funding into schools. The third is up for voting in 2010. This kind of commitment to our schools is exactly what creates great communities, and a good Sarasota property market.
Quality education requires broad public support: it also requires educational and financial accountability. The budget for 2009-2010 is $404,075,131 and the majority of that money is spent locally and therefore reinvested back into our local economy.
Funding Schools Increases Sarasota Property Value
“In fact, a study by Professor David Figlio at Northwestern University has found that since the introduction of the grading system for Florida schools, those with the top grade add about 10% or around $8000 to property values in the area.”
In this Bloomberg article, Marcus A. Winters, a senior fellow at the Manhattan Institute and an economist who focuses on education policy, even advises buyers to consider buying in a lower quality school district and then working to improve the schools as a way of creating value on their Sarasota investment property.
And Professor Figlio agrees: He suggests finding a school that just missed the A grade as a way of paying less for a home, but still with a decent school in its area. Then if the school improves the following year, the investment property appreciates in value as well.
Conclusions for the Sarasota Real Estate Market
Sarasota is such a wonderful place to live: with such a thriving arts scene, a good real estate market and strong community. Currently Sarasota also has several stellar schools. Pine View School, for example, ranks #1 in the state of Florida and consistently ranks amongst the top 15 in the nation. While our public school system overall scores well against others in the state, I feel that we should continue to invest to improve the quality of schools so that Sarasota is consistently on top in all areas of the county. This strategy will ensure the value of real estate and a healthy economy long term.
Fell free to call me with any real estate questions: 941.587.0740.
