Home Prices Fall in Immediate Wake of School Shootings
School shootings are among the most devastating events a community can experience, and the fallout is not just emotional. In areas that have experienced school shootings, the entire local housing market suffers on a long-term basis. Researchers from the Universities of Illinois and Georgia collaborated on a new study evaluating how home prices react in the short- and long-term after mass shooting episodes in schools. According to their data, home prices in the school districts fell by 7.8 percent over three years after the incident. After five years, that amount rises to 13.6 percent for schools just inside the border of the school district.
“Not a lot of good things happen to property values in the aftermath of a school shooting, and that effect persists, lasing for at least three years,” observed Illinois graduate student Juan Munoz. “The effect is more pronounced the closer you are to the school district boundary,” he added.
Ruchi Singh, a professor of real estate at the University of Georgia, and her co-author suggested, “Potential homebuyers are likely to avoid school districts in which a school shooting has taken place because they believe school quality will inevitably decline due to lower student enrollment rates, the departure of teachers, and lower standardized test scores after the shooting.” The data also indicates buyers with families are more affected by the idea of living in the area, since homes with higher numbers of bedrooms tend to take a harder hit than smaller properties.
Interestingly, commercial and industrial property values in areas near school shootings do not experience the same type of dip. Munoz observed the two researchers found little evidence of “place-based stigmas” for those real estate sectors. He added the two do not believe this type of stigma is necessarily the cause of falling values in affected school districts, either, but rather, “Our results are driven by a perceived deterioration in school quality.”