Buyers are pulling out of deals and sellers are losing tens of thousands as buyers seek homes near the ‘best’ schools, say realtors.
Changes to elementary school boundaries at Ottawa’s largest school board will have an effect on real estate prices in some neighbourhoods, say real estate professionals.
The question is how long it will take and how much it will cost buyers and sellers.
“There will be winners and losers,” said Josh Eyking, a broker with RE/MAX Hallmark Eyking Group Realty Ltd., who has worked in the downtown area for the past 15 years.
“What will happen is higher demand in certain catchments and lower demand in others. I’m seeing that shift right now.”
Others say it will take longer before the effects are felt.
“Realtors are definitely paying attention to catchment areas,” said Paul Czan, the president of the Ottawa Real Estate Board.
Desirable schools do indeed have the ability to affect price points, but he doesn’t believe shifting boundaries will have an impact in the short term, he said. However, would-be home buyers are waiting on the sidelines until there is more certainty about boundary changes.
“A lot of people who are looking to move have put their plans on hold until there is more certainty over this.”
Proposed boundary changes for elementary schools at the Ottawa-Carleton District School Board were released on Feb. 28, sparking a firestorm of protest, with parents arguing that the proposed changes would split up siblings and tear neighbourhoods apart.
Last week, the OCDSB said it expects to release revised proposals and a school locator around the middle of this week. Trustees are to discuss the revised proposal at a board meeting on April 8. It will likely take another month before the final recommendations are released.
When buyers with children are looking for a new home, particularly those who are relocating from another city and aren’t familiar with Ottawa neighbourhoods, they may use a school catchment area as one of the parameters for their search, said Czan.
It’s not unusual for a buyer to say they want a buy a home in a specific catchment area, said Eyking.
Some buyers even come armed with the Fraser Institute ratings, which give schools a score out of 10, based on publicly available data such as provincial test results. The ratings are designed to have an average value of 6. The Fraser Institute also gives a ranking compared to 3,021 elementary schools in the province.
The ratings can vary widely, even for schools that are relatively close to each other. Devonshire has a score of 8.5 compared to 4.4 for Centennial Public, which is 1.8 km away, for example. Severn Avenue has a score of 8.2 compared to 3.5 for Pinecrest, which is 3 km away — and across the Queensway. Knoxdale has a score of 8.3 compared to 4.4 for Manordale, which is 2.2 km away.
Evening Update
For some parents, it’s not just a matter of getting into the school with the highest rating, said Eyking. Some want to be within the boundaries of a school they feel will benefit a child with learning disabilities or special needs. Some will stretch their finances as far as possible and trade down to a smaller house in the desired catchment area. Others will give up their car to live near their chosen school.
“For many buyers, the school catchment area is the primary condition of sale,” he said. “Forget restaurants and main street commercial. It’s schools.”
The OCDSB school boundaries review aims to shift student populations to make smaller schools, often English-only schools, more viable by adding French immersion to all schools. The goal is to make all schools “good” schools.
However, for buyers that is not considered “tried, tested and true” at this point in time, said Eyking.
“They’re buying the biggest asset of their life. They want to make a sound decision based on facts. A lot of families aren’t willing to bet their most important asset and their kids’ future on a ‘maybe.’”
The current uncertainty around the final decision is affecting both buyers and sellers, said Eyking. Some buyers re-drew their parameters as soon as the proposed new boundaries were released. He said he has seen buyers back away from a home that would typically sell for over the asking price because of a potential change to the catchment area.
Catchment areas can make the difference between a house getting one offer or getting three offers, said Eyking. In a $1-million home, multiple interested buyers can represent a $50,000 to $70,000 differential in sale price.
On the flip side, with only one offer, it can mean $50,000 to $70,000 less than the asking price. That’s a potential difference of up to $140,000 between a house in a desired catchment area with multiple offers and a similar house just outside the catchment area with only one interested buyer.
At the end of the day, one of the things buyers believe they have control over has been taken away, he said.
“The rug has been pulled out from under them.”
Brett Liscomb, a realtor with Bennett Property Shop Realty, agrees that some buyers use school rankings as a reference point. But buyers also use other data, such as crime statistics.
“If you have school-age kids and you’re not familiar with the city, one of the few things you can look at from the statistical point of view is the school rankings,” he said.
In addition, there are differences inside the greenbelt and outside. In the urban area, neighbourhoods with socioeconomic differences abut one another.
“You don’t see that in Orléans or Barrhaven,” said Liscomb, who said some buyers are looking to go “deeper” into a school boundary.
Meanwhile, there are other factors at play. Some home buyers want to be within a boundary because a school has better access to before-and-after-school care, because they prefer certain start and end times for work reasons, or because parents prefer a specific French immersion model, he said.
There are external factors that are affecting the real estate market as well, including interest rates, global events, local issues and the economy. A federal election tends to slow down the housing market, said Liscomb.
He points out that buyers with school-age children are only one segment of home buyers.
“For every buyer who wants to be in an area because of the school zone, there’s a baby boomer who wants to live in a quiet area.”
At this point, the effect of school boundary changes is hard to quantify, said Liscomb. He predicts it will take two years to see the effects of boundary changes on the real estate market.
Eyking said he doesn’t want the question of how shifting boundaries could affect real estate prices to be considered a “privilege problem.”
“It’s not just downtown,” he said. “It’s anywhere there are new boundaries. It’s across the city.”
Parents who are fighting boundary changes say real estate prices have nothing to do with their fight.
Zoe McKnight, a Devonshire Community Public School parent who belongs to an advocacy group fighting the boundary changes, said she has never seen property values raised in the main parent group chat, which has 450 members.
McKnight said some parents, including those in her school community, have sent a counter-proposal for boundary changes that would send their children to a school that is under-resourced because it currently doesn’t have French immersion.
“Parents are focused on kids’ well-being and the many, many flaws in the OCDSB’s proposal and process,” she said.
“House prices have not been part of our advocacy and have no place in this discussion.”
Trustee Lyra Evans said she has had a call about the real estate values issue.
“My priority is education and students,” she said. “I am responsible for those kinds of things.”
Eyking, who has three children, faces moving his youngest child to another school if the boundary proposals go ahead. He was hoping the youngest could walk to and from school with his older sisters. The boundary changes mean some families will have to juggle pick-up and drop-off times and will sever community ties, he argues.
Eyking, whose family were farmers, went to school on Cape Breton with the children of coal miners.
“I think it made me a stronger person. It made me resilient,” he said. “But for me, this doesn’t make sense.”
