Last month (November):
Years left: 9.833333333
P = $760.67, I =$453.64, Escrow = 726.93
This month (December):
Years left: 9.666666667
P = $765.99, I =$448.41, Escrow = 726.93
One months savings from this month’s prepayment: ~$2.22. They haven’t figured out that our escrow should be smaller yet… maybe next month.
Our house has lost 30K in value over the past year alone.
“They” say to purchase in a good district because those houses keep their value. Everyone wants to buy a house in a good school district.
If you have school-age kids that you’re sending to public schools, obviously you want a good district. Even if you’re not sending them to public schools you may want to live in a neighborhood with other school age kids in the neighborhood. (Not that neighborhood kids play together anymore, but you know, in theory.)
However, it’s not really clear that you need to live in a good school district if you don’t have school-aged kids. A good school district costs something– it means a higher purchase price, which in turn lead to higher property taxes (because the house has higher value) for something you’re not getting a direct benefit for.
Of course, when you buy in a good school district, you’re also buying neighbors who care about housing values and/or about education… otherwise they wouldn’t have paid that extra premium to live in the good school district.
Unfortunately, school districts are not static. They can change the district– if you’re in a bad district you can get a windfall… if you’re in a good district, you can get slammed.
Why did our house lose 30K in value this year? Because they changed our school district.
Of course, the reason they were able to change our school district (forcing kids in our neighborhood to bus to a school that isn’t the closest or even the second closest school) is because we are a mixed-income neighborhood. The truly rich neighborhoods they didn’t dream of switching schools on. There would have been too much push-back.
So hey, at least our property tax should be going down this year. But think all the money we would have saved if we just hadn’t bought in a good school district when we first moved here. Though our property values would still be going strong if we’d bought our second choice house in the super wealthy neighborhood. Of course, we’d be sending our kid to private school anyway because the publics won’t work with us until ze is older. So we’d still be paying those extra property taxes for no good reason.
So should you keep school district in mind when you’re buying a house? Well… sure, keep it as a factor, but don’t just use it as a heuristic. There’s some monetary trade-off point where the school district just isn’t going to matter, and if you’re planning on being in the house for the long-haul, maybe it isn’t worth the extra property tax. And if you’re in a lousy district to begin with, the only way for the schools to go is up. So maybe buying in a bad school district isn’t the worst thing in the world.
Did you buy in a good school district? Did you look at districts when you bought your house?