Housing Prices Linked to Schools

IRVINE, CA-Orange County median home prices have made an impressive jump over the past year, industry sources report. In addition, the county boasts one of the highest-rated public school districts in Irvine Unified School District, reports ZipRealty Inc., which may be linked to the increase.

ZipRealty reports that average home prices increased 22% year-over-year to $531,500 as of mid-August, and the school district scored 9.2 on a scale of 1 to 10, with 10 being the highest. “Home values and school scores are always going to be linked,” says ZipRealty's president and CEO Lanny Baker. “In order to give our users the most complete picture of a home's value, we provide a school score, which is calculated based on test-score data as well as student/teacher ratios, for every home listing on ZipRealty.com.”

Daren Blomquist, VP of locally based RealtyTrac, says that his firm's “data shows that the median residential-property sales price (including single family and condos) in Orange County was $537,750 in July, up 24% from a year ago and up 56% from the bottom of housing prices for the county: $345,000 in March 2009.”

Blomquist adds, “And certainly, the school districts in Orange County—particularly Irvine—are strong. We actually look at combined school test scores to rate schools, and I noticed in our data that Northwood High in Irvine had the 40^th-highest total average test score nationwide out of more than 379,000 schools in our database. These two factors are certainly two indicators that the fundamentals of the Orange County housing market are very strong.”

Location is another reason for the strong housing market here, says Blomquist. “Usually home values get higher in markets closer to the water, and Orange County is no exception. On top of that, the weather is good, and homeowners have access to many amenities that are important to them (restaurants, entertainment, etc.). Homeowners also have good access to jobs in Orange County, where the unemployment rate is close to 6%--well below the national average (7.3%) and state average (8.7%).”

Master-planned communities like Rancho Mission Viejo should help ease supply and allow the typical transfer of move-up buyers who have finally regained a good chunk of the equity in their homes to move into these new homes, opening up more existing homes for first-time buyers and other move-up buyers, Blomquist adds. “These should help balance supply and demand in Orange County, which will likely slow the torrid pace of home-price appreciation the market has seen over the past couple years.”