Do home values in areas where schools are well respected by the residents have more price support in a falling market than homes in other areas? Yes, at least in areas where private schooling is an option.

To see why this is so imagine a homeowner living in an area where the school is not to their liking and they pay for private schooling. The school expense is not tax deductible and the school is likely to be less conveniently located. This same owner could buy a home that is in a neighborhood where the schools are to their liking and effectively convert all the private school expenses into tax deductible home mortgage expenses and they likely have a school conveniently located near their home.

Thus, when private schooling is a practical option, demand for homes in areas where the schools are generally respected are likely to remain high even in markets where prices are falling. When demand is higher relative to the surrounding areas, then prices also tend to be higher as well. So expect uneven price declines as this buyer's market  continue to unfold.

To assist interested California stakeholders, the State of California periodically releases information on school performance. Other sources, including personal and anecdotal sources, must be used to obtain information on art, music, athletics and other areas of interest that are hard to discern from the State's performance assessment.

Buy Now?

Maybe now is the time to buy. If you are buying a house to live in for several years does it really matter if home prices drop? As long as you can afford your house payment, it really doesn't. As long as you do not have to sell as a result of a job loss or relocation then it does not matter if you are "underwater" at any point during which you own it. The only point in time which matters is the period in which you are going to sell it. So if you can hang on during any downturn then there is no reason not to buy now.

If you have a good steady job, have a down payment, have 2 months of cash reserves after closing, are employed in a field that is in demand or have multiple sources of income, then buy now. Why? Because whether you rent or you buy you are still paying a mortgage. When you rent you are paying someone else's mortgage and they get the tax breaks, any appreciation and they get the control. The owners control the landscaping, the interior, pet restrictions, and all material matters regarding the property. Don't underestimate the intangible benefits of owning. Buy when you can not when you think it is a good market or bad market.

Of course, if you are concerned about your job, don't have cash reserves, can't cover closing costs, or have a lot of other debt, then now is not the time to buy. If you want an honest discussion that will help you decide if now is the right time for you to buy, please contact me.