Buying a home is a great decision but not an easy one. A home is an investment and buyers consider a number of factors before zeroing in on a place they want to put their money in. Let us look at some of the buying trends.
Some of the key parameters people consider before taking a decision on buying a home are – apart from the budget, design and layout of the house, is the proximity of the house to the supermarket and healthcare services as well as basic amenities. These few considerations help prospective homebuyers from taking a decision. There is one other aspect which also plays a significant role in swinging home purchase decisions; it is the proximity to good schools in the neighborhood. This is a key factor which can not only influence a buyer’s decision but also impact its pricing markedly. And, this is a proven fact.
Analyses of realty statistics and consumer surveys have revealed a startling insight of consumer behavior in buying homes. Nearly 90% of buyers looking to buy homes show a preference to invest in homes that are closer to schools. This trend is evident among families with children who are yet to complete their education.
The availability of well-known and reputed schools closer to the neighborhood has attracted buyers in great numbers, who are ready to shell out skyrocketing amounts for homes. Apparently many buyers are even investing for the future generation, without even taking a look at the property.
What emerged from detailed research on consumer behavior in the realty sector, is that one out of five buyers portrayed immense flexibility in housing plans and design on the one-hand, yet made no compromise on what they thought was a crucial factor- proximity to a well-known school, to influence their purchasing decision.
Even though consumers came with certain fixed housing plans and preferences in mind, they were willing to change, for instance give up on a garage or a bedroom or compromise on the size, layout or design just to live in the school district. Surprisingly, proximity to shopping malls and grocery stores figured last on their list of priority in home purchase decisions among 50% of buyers.
Buyers are willing to cough up anywhere from 6 to 20% more for a property closer to the right school!
Realty prices in areas that are close to schools is certainly higher and in demand compared to areas farther from schools. Statistics have revealed that buying homes in the best school districts fetch higher prices as compared to homes from not so popular areas.
Even with all factors considered equal, still buyers end up paying much more for houses situated close to reputed and highly rated schools. This is not the case with homes closer to schools with lower ratings.
A survey conducted by a national realty brokerage, Redfin, found some really stark facts in consumer behavior and pricing differential in home investments. The study which employed a mammoth data of 407,000 home sales found that buyers end up paying $50 additionally per square foot for homes situated in highly rated school districts. This was not the case with homes situated close to average-rated schools.
The research found pricing differential to be significant as much as thousands of dollars among homes which had the same square footage, number of baths and bedrooms but were close to a well-known school. Interestingly, homes that were greatly similar witnessed huge price differentials just because a school boundary line separated them.
This goes to show that location of a school and home prices definitely are interconnected whether we want to believe it or not.
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