School District Boundaries VS. Neighborhood Boundaries

[Spring]

A land fill doesn't have demographic data associated with it as does a school district. The fact that a school district could be considered for a location adjustment similar to a land fill is sad. Maybe this is the world we live in, but it is still sad.

 

[Michigan CG]

I personally feel that the large urban school district is better. I have strong ties to the school district and value the diversity that exists.......................However the prevailing view in our community is that the suburban schools are better. Wouldn't this determination be better left to the home buyer than the appraiser? .

The preference (or not) will be reflected in the sales prices of similar homes. I used to live in an area where the school district on the east side of an interstate warranted an adjustment of 20% vs the district on the west side of the interstate.

 

[The Warrior Monk]

A land fill doesn't have demographic data associated with it as does a school district. The fact that a school district could be considered for a location adjustment similar to a land fill is sad. Maybe this is the world we live in, but it is still sad.

Do you have market evidence that there is no difference in property values between the school districts? For market value assignments, appraisers rely on market evidence, not on the needs or opinions of particular individuals.

I remember early in my career appraising a property in a neighborhood of similar properties. However, the neighborhood was divided by the school district line. One school district has a 90%+ graduation rate; the other has a graduation rate below 50%? There was absolutely no other differences between the properties; just school districts. Needless to say, there was a HUGE difference in the values of otherwise similar properties right next door to each other.

 

[Spring]

I've used the application called Business Analyst Online (BOA) to get neighborhood characterisics based on a 1 mile radius from any address. Using this tool it was obvious that the neighborhood characterists of the comparables were very dissimilar to the neighborhood characterics for our neighborhood. I don't believe school district went into the analysis, but other marketing factors were included such as income, spending patterns, educational status, home owner vs. renter etc.

 

[The Warrior Monk]

Ultimately its the difference in price between what a property in one neighborhood sells for versus what the other property sells for in another neighborhood.

 

[Randolph Kinney]

I am not an appraiser, but rather recently sold a home. The home was appraised low by $9,500. The home we sold lied on the boundaries between, an urban school district and a suburban school district. The house is just within the boundaries of a large urban school district. My concern is that the appraiser used a very large 16 square mile boundary in order to include only homes located in the urban school district, even though there were many recent home sales in the proximate neighborhood which lies within the suburban school district. She even mentioned in an addendum that her school district criteria limited her pool of comparables. The appraiser reached far out of the neighborhood to find comparables in the same school district, crossing a lake and an interstate highway. My question for appraisers is--Does the school district criteria take precidence over physical location and other neighborhood characteristics? I didn't see anything in the Fannie Mae and Freddie Mac guidelines to indicate this is acceptable practice.

From Fannie Mae Selling Guide - May 28, 2013

Appraisal Requirements for Urban Properties

The table below describes lender requirements pertaining to appraisals for urban properties.

Lenders must ensure that …

• appraisers demonstrate that local market conditions make block-by-block analysis appropriate;
• appraisers analyze and use comparable sales of not only less similar properties from the subject neighborhood but also from competing neighborhoods if there is a lack of comparable sales in the neighborhood—either because of the level of rehabilitation or the relatively low number of sales transactions.

 

[Spring]

If there homes are in foreclosure, show distress, are boarded up or vacant and in the "bad district" there would be lot of pertinent factors to consider in the appraisal. However, if the neighborhood is vibrant, showing steady improvement, with low crime and neighborhood pride and in the "bad school district", it's clear that school district in this case is not a market issue. The appraiser in our case had to look far outside of the neighborhood and proximate neighborhood to get the type of comparables that supported the "bad school district" designation.

 

[Spring]

Why do appraisers struggle so much with the bad and good school district designation when the characterists of neighborhood itself and comparables within the neighborhood would give you all the data you need to determine market value. Isn't that the point of keeping the neighborhood boundaries as close as possible to the subject house?

 

[Spring]

Our home was located within the boundaries of a large urban school district, but the neighborhood was more suburban with a large lot; an additional parcel of farmland and backyard facing woods.

 

[Randolph Kinney]

If there homes are in foreclosure, show distress, are boarded up or vacant and in the "bad district" there would be lot of pertinent factors to consider in the appraisal. However, if the neighborhood is vibrant, showing steady improvement, with low crime and neighborhood pride and in the "bad school district", it's clear that school district in this case is not a market issue. The appraiser in our case had to look far outside of the neighborhood and proximate neighborhood to get the type of comparables that supported the "bad school district" designation.

You seem to be arguing a distinction between school districts labeling one bad and the other good.

What you are really showing is your bias on the value of your home versus a neighboring suburban location which is superior (higher value).

You had the opportunity to reject the sale of your home if it did not meet the contract price. Why didn't you?