The Hoover, Alabama school system recently made a decision to end bus service to public schools starting in 2014. I don’t typically cover this type of news on my blog, however I starting thinking of the potential impact this could have on real estate values in Hoover and decided that this is actually very relevant to my job as a real estate appraiser.
The job of an appraiser is to measure value as well as those factors that effect value, either in a positive or negative way. By removing school bus service, which is a popular amenity offered by Hoover, the city could be eliminated as a potential place to live by people who require and depend on this transportation to get to and from school. The question I asked myself was “will taking away this service result in people not moving to the city, therefore reducing demand and eventually creating a negative impact on real estate values”. Basic supply and demand is in play here. If there is less demand because of no bus service, but the supply stays the same (or increases due to new construction), there will be a surplus of inventory and prices will eventually drop. I read a recent article by the local Fox News affiliate where local real estate agent Chip Watts stated that his company had lost 10 home sales since the news was announced. This is a direct and immediate response to the elimination of school bus service, and it’s not positive.
In my 23+ years as a real estate appraiser I have found that school systems play a large part in driving property values. In fact, the school system is one of the main search criteria I always keep in mind when doing comparable searches in my appraisal assignments. Will being in the Hoover school system become a negative factor because no bus service is available? A public forum was held this week so residents could voice there concern and a common argument voiced by many parents was the problems they will have in getting multiple kids to different schools and still get to work on time. This will probably be the thought process future potential buyers will also go through when deciding between Hoover and another city to buy a home in. I guess only time will tell as to the long term effects on real estate values of this decision, unless it is overturned. What are your thoughts on this matter? Can you think of any other problems this could cause? Leave me a message below I would like to hear your thoughts.
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Is being in the MB or Vestavia school system perceived as a negative because they don’t bus? No. Will probably see a short term rise in the number of homes on the market as those won’t deal with it look elsewhere, but as the number of students decreases, as the system’s finances improve, and as the test scores improve, values will return.
There are some differences between Hoover and Mountain Brook and Vestavia, and its hard to compare them. Something one reader pointed out was the land area covered by Hoover is so much more that the other two. I’m not sure if it will matter in the end but for right now the current residents are seeing it as a negative, which could also reflect the feelings of potential buyers. Mr. Watts, the real estate whom I referenced in the article did note that their office had lost 10 sales, so there is some market support for the negative influence a lack of school bus system may have on home values in Hoover.
Very Nice blog Great I Agree With Real Estate sale business .
Thanks for your words of encouragement.
See reply from Mayor Ivey:
https://docs.google.com/file/d/0B4AcB2X6GY82emI1S2JTYjd2aHM/edit?usp=sharing
I do not agree!!!
Thanks for sharing your concern Mr. Fulton. The potential affect on your home’s value is valid, since our home is usually the most expensive thing we will ever buy. I hope things work out in your favor.