As the back-to-school season kicks into high gear in September, real estate markets in cities near top-rated schools, universities, and educational institutions are seeing noticeable shifts. Education has always played a crucial role in shaping housing demand, but this year, the impact seems even more pronounced. From families seeking homes in top school districts to students flocking to rental properties near prestigious universities, the back-to-school season is influencing real estate transactions in a variety of ways. In this article, we will explore how the start of the school year is affecting housing markets in cities like Boston, New York, Los Angeles, and family-friendly suburbs, and how buyers, renters, and investors are navigating this period of heightened demand.
The Influence of School Ratings on Home Values
One of the most significant ways that the start of the school year impacts local real estate markets is through the demand for homes in school districts with strong reputations. School district ratings are a major driver of homebuyer decisions, with families consistently willing to pay a premium for homes located in top-rated areas. According to the National Association of Realtors (NAR), homes located in highly rated school districts typically see higher home values, with some areas experiencing price premiums as high as 10–20% compared to nearby homes in lower-rated districts.
As school doors open for the new academic year, families who have been searching for homes near quality schools are pushing to finalize deals before the school year begins. Areas around well-ranked public schools and private institutions are particularly desirable, and real estate agents report increased activity in these neighborhoods. For example, in cities like New York and Los Angeles, demand for homes near renowned public and private schools has intensified as parents prioritize access to top-tier educational opportunities for their children.
In cities like Boston, where prestigious universities and top-rated public schools coexist, there’s an even greater overlap of housing demand from both families and university students. These factors combine to drive home values upward, as well as increase competition in the rental market.
Demand for Rentals in College Towns
The back-to-school season is also driving up rental demand, particularly in college towns and urban areas with large student populations. As universities and colleges reopen their doors, student housing markets are experiencing a surge in rental activity. Cities like Boston, New York, Los Angeles, and Austin, Texas, which are home to some of the nation’s most prestigious universities, are seeing high demand for apartments and rental properties near campuses. With many students returning to in-person learning after years of remote or hybrid classes, there is heightened competition for off-campus housing.
Rental prices in these college towns have surged in recent years, fueled by the increasing demand for proximity to top universities. In cities like Boston, rental prices near universities such as Harvard University and the Massachusetts Institute of Technology (MIT) are among the highest in the nation, with students and their families willing to pay a premium for short commutes to school. Similarly, New York City’s rental market around areas like Columbia University and New York University (NYU) remains competitive, with rents rising steadily each year.
The strong demand for student housing is not limited to the rental market alone. Real estate investors are capitalizing on this trend by purchasing multi-family properties in areas with universities or colleges, knowing they can capitalize on student rentals. In many cases, these properties are consistently occupied, providing steady income streams for investors. The surge in demand has also led to a rise in new construction projects specifically catering to the student housing market, with purpose-built student housing developments becoming more common in high-demand areas.
Family-Friendly Suburbs See Increased Interest
For families with school-aged children, the back-to-school season can also signal a shift in the housing market. Many families begin looking for new homes in suburbs that offer not only excellent schools but also a family-friendly environment. In particular, suburban areas near large cities, such as those surrounding New York City, Los Angeles, and Chicago, are seeing increased interest as parents prioritize educational opportunities and community amenities.
In suburban markets like the North Shore of Chicago or the San Fernando Valley in Los Angeles, families are actively searching for homes in neighborhoods known for their strong school systems and safe environments. These areas are seeing heightened demand in the months leading up to and following the start of the school year, as families look to make moves before the academic calendar begins. Real estate agents in these areas report that homes in highly rated school districts are often selling quickly, with multiple offers from families eager to get their children into the best local schools.
Additionally, many families are opting for homes with ample space, prioritizing larger properties with outdoor areas for children to play. This shift toward suburban living, in part fueled by the pandemic’s remote work surge, has continued into 2023, with many families choosing homes in quieter, less urbanized areas while still being close enough to larger cities for work and other amenities.
Impact of Back-to-School Season on Commercial Real Estate
The start of the school year also has a unique impact on the commercial real estate market, particularly for properties serving the educational sector. Demand for properties suitable for schools, educational institutions, and private tutoring centers has grown, as more families are prioritizing supplemental education and extracurricular activities. Investors and developers are increasingly turning their attention to retail spaces that can be converted into educational facilities, such as after-school programs, daycare centers, and private learning institutions.
In cities like Los Angeles and New York, the demand for commercial real estate for educational purposes is rising. These commercial spaces are seeing increased leasing activity, particularly near high-density residential areas or affluent suburbs where families prioritize their children’s education.
Conclusion
The start of the school year has always had a significant influence on local real estate markets, and 2023 is no exception. The back-to-school season drives demand in both the residential and rental markets, particularly in areas near top-ranked schools and universities. Whether it’s families seeking homes in family-friendly suburbs with top-tier school districts or students searching for rental properties near prestigious universities, the start of the school year continues to shape housing trends in key regions. The surge in demand for properties near educational institutions is also having a noticeable effect on commercial real estate, as investors see opportunities in the growing demand for educational spaces. As education continues to play a central role in housing decisions, the back-to-school season will remain a pivotal time for real estate markets across the country.
