A family was preparing to move from another state to El Paso. They had a budget in mind and were considering two properties. One was in a neighborhood with a school score of 9, while the other had a score of 6, but the price was lower for the 6-point neighborhood. The family's question was simple: how much does a 3-point difference actually reflect in home prices, and is it worth paying more for that difference?

To answer this question, we first need to look at what the scores measure. The school scores you see on Zillow or Redfin are GreatSchools ratings, which are based on test scores, student growth, and for high schools, college readiness, rated on a scale from 1 to 10. The growth metric looks at how much students have improved compared to the previous year, filling in gaps that test scores alone may not show.

In terms of the relationship with home prices, data released by Redfin has shown that homes assigned to top-rated schools sell for about $50 more per square foot than those assigned to average-rated schools. While this is a useful reference, it's important to note that this premium can vary significantly by city, and in markets like El Paso, where home prices are relatively low, a 3-point difference may not translate into as large an absolute dollar amount as in larger cities.

Looking at actual cases within El Paso, Glen Cove Elementary has a score of 10, Tippin Elementary and Hawkins Elementary both have scores of 9, and Bliss Elementary has a score of 8. While the numbers may seem close, there can be substantial differences between a score of 9 and a score of 6, reflecting not just test scores but also growth and equity metrics.

If a family is moving to Texas for the first time, they should also consider property taxes. Texas has no state income tax, but property tax rates are relatively high, and these rates can vary slightly depending on the school district. If they base their monthly budget on the previous state's standards, the actual holding costs may be higher than expected, so it's advisable to check the property tax rates for the school district along with the school scores.

The relationship between this premium and school scores can vary with market conditions and does not guarantee a specific increase in property values. Therefore, rather than deciding to spend more based solely on score differences, it's better to verify a few additional factors: whether the scores have been stable over the past few years, the student-to-teacher ratio, and what parents are saying in reviews about the school environment. This information is not reflected in the score alone.

When assigning GreatSchools ratings, test scores and student growth are each weighted equally. Here, growth refers to how much students have improved compared to the previous year. Therefore, even if test scores are low, a good growth rate can result in a surprisingly high final score, and vice versa. Relying solely on one score can lead to missing these trends.

While neighborhoods with high demand from Korean families tend to have steady rental demand, this does not guarantee that prices will always rise. It's important to also look at recent rental price trends and vacancy rates alongside school scores to make more stable investment decisions.

• Trends in rating changes (last 3-5 years)
• Student-to-teacher ratio
• Content of parent reviews
• Verification of the assigned school for the property address

Ultimately, the family chose the 6-point neighborhood, deciding that the 3-point difference was not significant enough to justify the higher price. Of course, decisions may vary from family to family. Scores are just reference points, and before finalizing a contract, it's advisable to double-check the assigned school for the address on the school district's website and consult with a real estate professional if necessary. This article does not constitute investment or legal advice.