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Toronto Real Estate and Schools - Do Good Test Scores add up to Higher Real Estate Prices?

Toronto Real Estate and Schools - Do Good Test Scores add up to Higher Real Estate Prices?
By Susan Pigg
www.moneyville.ca

John Pasalis has seen dozens of moms-to-be in a panic and dads clutching spreadsheets of school scores walk into his Leslieville office during his years as a real estate agent.

He’s come to realize that when it comes to the hard math of buying a home, good schools count almost as much as price and location.

“People will say they want to live along the Danforth, but that really means they want to be near Frankland or Jackman schools,” says Pasalis. “When they talk about looking in Bloor West Village, they really mean Runnymede school district.

“Schools have become a huge concern for most homebuyers, even those who don’t yet have kids.”

So Pasalis and his partner Urmi Desai have done some number crunching of their own.

Sometime next month they will launch a novel new tool on their Realosophy.com website that is sure to stir up controversy and get homebuyers doing some calculations on their own.

They plan to post the EQAO scores and data for some 450 Toronto schools along with listings of all the properties currently for sale on MLS in the surrounding area. But, more than that, their small analytics team — Pasalis admits he prefers mining data to manning the TV remote at night — will try to explain if and how the scores translate at street level.

That could eventually lead to offerings on their website such as: The top 10 schools with houses for sale under $500,000; the schools with the most improved scores and how/if that is impacting real estate values; affordable areas with improving school scores.

“We’re not using this data to say, ‘Here’s where not to live,’” says Pasalis. “And you need to take these EQAO scores with a grain of salt. A lot of times buyers put more weight on school scores than they should.

“We’re trying to take a more optimistic and positive approach, to help people find neighbourhoods that may still be affordable but overlooked.”

The bottom line is that the top schools — at least the ones that score highest on the controversial standardized EQAO tests meant to assess the reading, writing and math skills of every Grade 3 and Grade 6 student in Ontario — tend to be in the most expensive neighbours.

And those are now out of reach of most buyers, thanks to a doubling of Toronto real estate prices the last decade and unrelenting bidding wars for what little does come up for sale in coveted neighbourhoods.

“People need to be educated. Yes, you may want to be in the top school district, but you don’t want to spend millions of dollars on a house,” says Pasalis.

“We’re trying to find ways to help people search for homes in a way they can’t today. And the reality is, most people search based on schools.”

Pasalis is keenly aware of the criticisms of school scores — that they speak more about socioeconomics than sound teaching.

And, in fact, some of the preliminary findings have been interesting.

Some 46 per cent of Toronto schools that score an average of 80 per cent or greater are in neighbourhoods where the average house price is less than $500,000, largely in Scarborough and North York.

So far they’re found there is “no straightforward relationship between the quality of local schools and house prices.”

Yet homebuyers remain confused and concerned.

“One of the most common questions we’re asked is, ‘If I buy in a bad school district, is it going to affect the resale price of my home?’ says Pasalis.

“We’re trying to answer a lot of these questions and either confirm what people believe or challenge some of the myths out there.”