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Introducing Housing Prices and Incremental Substitution

Comments Off on Introducing Housing Prices and Incremental Substitution 18 September 2011

A friend who lives in Fantastic Falls, Virginia posed the question lately: Is there a premium for a home within the Langley High School district versus South Lakes High School? Langley High School is predominately situated within the postal addresses of McLean and Good Falls, and also the majority of the South Lakes High School district falls inside the boundaries of Reston.

This question has at its core the fundamental principle of “incremental substitution” that Thomas Sowell addressed in Simple Economics. Within the example of housing choice, what can a homeowner give up in exchange for a lower cost, or reverse is there a greater cost paid for a specific component of an element of the commodity of housing.

To attempt and establish if there’s a statistical distinction in value among these two schools, I ready a Comparative Marketplace Analysis from the Many Listing Service for all detached properties sold cost $500,000 to $1 million from April 1, 2010 to date (August 4, 2010). I selected those houses that the listing agent identified as falling inside the Langley High School pyramid after which those that had been listed as becoming inside the South Lakes High School pyramid. The information gleaned is below.

Langley High School: Typical Sold Cost $828,385; Median Sold Cost $828,762; Typical Seller Subsidy: $1,537; Typical Sales Cost Much less Seller Subsidy: 826,848
Typical Days on Market-Property: 62, Median 20; 70 Single-Family Detached Properties Sold; Typical age 1974; Typical Lot Size.97 acres.

South Lakes High School: Typical Sold Cost $656,177; Median Sold Cost $635,000; Typical Seller Subsidy: $3,970; Typical Sales Cost Much less Seller Subsidy: $652,207
Typical Days on Market-Property 55, Median 22; 61 Single-Family Detached Properties Sold; Typical age 1984; Typical Lot Size:.47 acres.

This information shows that there’s roughly a 26.2% cost premium for Langley more than South Lakes. It takes a couple of days longer to sell within the Langley pyramid but that could extremely nicely need to do using the reality that it generally takes a lot more time to sell a a lot more pricey property, regardless of exactly where it can be situated. Other aspects that might be coming into play is that the typical lot size is pretty much twice that inside the Langley pyramid than it’s within the South Lakes pyramid, but the typical age in South Lakes is ten years newer than that of Langley.

Choosing a high school which is the correct location for a specific student to flourish is really a lot an individual choice. Langley is properly respected, listed #47 within the U.S. News and Globe Report December 9, 2009 problem: America’s Ideal High Schools 2010: Gold Medal List. And South Lakes gives the properly regarded International Baccalaureate program. The Fairfax County Public Schools could be the 12th largest within the nation and presents a number of programs that assist ascertain which school provides the educational environment that enriches the knowledge for each and every certain student.

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