Assessing a Potential Correlation Between Housing Prices and School Quality, as Measured by Academic Performance Metrics

In 2018, housing market-related spending was nearly 15% of the United States’ GDP. Fixed investment in real estate accounted for roughly 3.3% of GDP and spending on housing services was about 12%. Owner-occupied real estate contributed to 25% of household net worth. The correlation between net worth and real estate makes housing a critical aspect of both day-to-day and future life (“Introduction to” 2019). Housing is not only an investment in net worth, but an investment in a family’s future. A majority of homebuyers in a 2018 survey identified school quality as a dominant factor in their decision to purchase a house in a specific area. It is evident that buyers are willing to pay a premium for schools that are perceived to be a higher quality (Colley 2017). Westchester County, New York is one of the most expensive areas in the United States. There is a perception among homebuyers that Westchester County has some of the best schools in the country. High taxes, specifically property taxes, are often seen as a means to achieving better schools. However, even though Westchester County is known for better schools – home values often reflect this sentiment – it is critical to determine if there is actually a correlation between school quality and home values (“Why Are Our” 2010). This paper investigates if there is a correlation between school quality, as measured by a variety of performance metrics, and housing prices in Westchester County. Furthermore, this paper uses performance metrics to determine if there is a correlation between the achievement of different races in a school district and housing prices. Race based metrics, as measured by test scores for different ethnicities, will serve as specific markers of academic performance. If there is a connection between school quality (for all races) and housing prices, it is essential to determine if this correlation varies by race.