Public school systems….a polarizing issue when buying a house, kind of like a swimming pool. Either you love it or you hate it, a “must have” or a “could care less”.
In the Pasadena area, the San Marino school system is one of the best if not the best in the state of California. The South Pasadena school system enjoys an excellent reputation as well. Unfortunately the Pasadena public schools have not been on the list of the most highly sought after school districts. Given the choice would you rather go see the Lakers or attend a Clippers game? Most homebuyers have not used the public schools as a compelling reason to reside in Pasadena, unless they are attending one of the many private and pricey schools in the city.
The purpose of this article is not to discuss the pros and cons of the available school districts in the area, but to see if a correlation exists between property values in a given area and the school system in which it resides. Do the better public schools help to maintain higher property values in their city?
First let’s look at the cost of a private education. The cost of K-8th grade at a private educational institution can set you back from $12,000 to $15,000 annually. For those 9 years, be prepared to pay in the neighborhood of $135,000. Oh and by the way, that is for one (1) child.
Now let’s take a look at the housing markets in the subject areas and what has happened in the last year as real estate markets began to retreat both locally and nationally.
The City of San Marino has sold 86 homes this year to date compared to 108 last year. These were sales results through September. The median price increased from $1,400,000 to $1,552,500. If you have the number one school system in the state of California, your real estate market must be immune to external forces?
South Pasadena real estate reports sales of 82 homes this year compared to 141 last year through September, but despite the unit decline, the median price has only dropped 2.6% from $819,000 to $797,500 this year.
With the median price of a single family detached home in California down 40.9% from September ’07 to September ’08, these are remarkable results in a state that has been hit hard by the foreclosure and sub-prime crisis.
When reviewing Pasadena real estate, the numbers begin to change. Last year through September, Pasadena recorded approximately 1176 home sales and a median price of $665,000. In 2008 unit sales decreased to 736 and the median price dropped to $600,000. Down about 11%. (Note: the Pasadena sales numbers were not verified for accuracy. They were taken as reported by the i-Tech MLS. The numbers reported for 2007 may have some duplication due to the i-Tech and MRMLS being combined)
The $64,000 Question
Maybe the more appropriate heading should be the $135,000 question. Are the Pasadena public schools negatively affecting Pasadena Real Estate Prices?
The Pasadena housing market is about ten times the size of South Pasadena or San Marino. Maybe it’s just possible when you have a school district that size, top performance will always be elusive. Just look at the beast known as LA unified. If larger school districts were broken up into more manageable units, would performance increase? If performance increased, would housing values stabilize and be less subject to volatility?
I do not know the exact answer to the question. Based upon the evidence, it certainly doesn’t appear that Pasadena public schools provide property values here in Pasadena any advantage. If no benefit exists, then only hindrance remains.
We all want what is best for our kids. I once heard the best gift a parent can give to a child is a good education. Would you be willing to sacrifice your living standards by moving to a smaller, more expensive house to enable your children to attend an excellent public school? I realize sometimes that is just not possible.
An improved public educational system is in everyone’s best interest.