Most major Web real estate sites list “location” and “price” as the two key home purchase decision factors, and sometimes add “quality of schools” as a third.
None of them list “real estate taxes” as a driving factor.
And a key study indicates that Westchester residential real estate shoppers, uniquely, care most about quality of schools, and very little, if at all, about property taxes, when weighing a purchase decision.
Speaking of Web real estate sites: Check those that provide data on real estate activity and you’ll find that in recent years Katonah-Lewisboro real estate has not underperformed compared to surrounding towns, contrary to constant claims in these parts.
Please, check the sites yourself.
It doesn’t make sense to equate K-L “per square foot” values with towns like Scarsdale and/or against a down-county weighted average, as the K-L Finance Committee did in its 2012 spring report. You may as well compare K-L p.s.f. to the east side of Manhattan.
But if you look at price trends, days on the market and inventory in recent years, you’ll find that K-L real estate moves in virtual lockstep with surrounding towns.
Of course, K-L isn’t a single real estate market. It’s a collection of zip code-defined markets, and performance varies somewhat from one zip code to another.
But review the secular performance of our zip codes and those of surrounding towns and you’ll find all of them perform about the same, especially if you start with 2007—just prior to the housing bubble bursting/Great Recession—and follow along thereafter.
As for the key study: In 2001, as part of an impact statement for a water treatment plant planned for Westchester, the New York City Department of Environmental Protection (DEP) asked 10 leading Westchester real estate brokers to choose the top two home purchase decision factors.
Zero brokers chose real estate taxes as first or second most important.
Note that 2001 is the starting year of the 2012 Finance Committee data that some interpreted as forging a link between school taxes and real estate values, even though the data actually demonstrated no such link.
In the DEP study, “brokers who actively market residential property in Westchester County” were asked to rank eight parameters that might influence purchase decisions, including: “price-to-value ratio”; “geographic location” (how close to job centers); “quality of schools” (measured by factors like test scores, teachers’ salaries, percent of college-bound students); “amenities” (like parks and libraries); “proximity to commuter railroads and highways”; “real property/school taxes”; future “resale value”; and “general quality of the community.”
“Among these parameters,” the report states, “the quality of schools emerged as the predominant site selection…by far the most predominant issue…
“Real property and school taxes were not considered to be the most important or the second most important factor to homebuyers…Most of the brokers indicated that buyers who have selected Westchester County as a place to live typically come to a site anticipating that taxes would be high, higher than neighboring Putnam County and Connecticut…As a result, nearly all other factors are more important in selecting a home site.”
There is no data to indicate that Westchester home buyers have changed their outlook since then. In fact, a detailed and thoughtful (though slightly conservative-skewed) 2010 Westchester Magazine article on Westchester’s real estate taxes (bit.ly/12ZGken) noted that, “The formula ‘good schools equal high home prices’ might as well be tattooed on the forehead of every realtor in the County.”
A review of today’s online real estate bulletin boards shows that buyers looking into Westchester specifically discuss quality of schools as their primary concern.
BTW: The DEP report indicates that if teacher salaries are too low, buyers consider that a sign of weak schools.
The bottom line:
No matter how one characterizes the performance of K-L real estate, it’s part of Westchester County, where buyers look at quality of schools above all other factors, especially real estate taxes.
So as we examine ways to hold down K-L operating expenses—as indeed we must—let’s remember that if we care about our real estate values, it’s more important to preserve the excellence of our schools than to irrationally suppress our real estate tax rates.
Oh, and, isn’t our community also supposed to care about how our schools affect our kids’ futures?