Using Abilene real estate data to compare its schools
January 2024 overview
- Before we get into the numbers, a caveat: in January 2024, 47 homes sold in AISD, 42 homes sold in WISD, and only 7 homes sold in JNCISD. Consequently, I'm comfortable making inferences about trends in AISD and WISD; much less so in JNCISD - all it takes is one million dollar sale in JNCISD to skew the numbers.
- With a slight fall in JNCISD prices and an adjustment in price in WISD by rougly $17,000, the gap between total price of JNCISD and WISD sales widened to $29,000 - mirroring the difference in November. The decline in AISD prices that started September 2023 saw slight a slight $1500 increase, but this, with the drop in WISD prices, puts AISD $136,271 below the average price of WISD sales. It's worth noting that homes in JNCISD are on larger lots (avg 3.556 ac) than WISD (0.738 ac) and AISD (.412 ac) which helps explain the price difference. WISD (avg build date 2008) and JNCISD (avg build date 2015) inventory have a twenty year difference in home age; the average AISD home was built in 1979. New
- If you adjust for inflation, the price on JNCISD homes finished better than 5 years ago (+$33,349) which I would attribute to the popularity of the district, bigger lots, and newer inventory, less in WISD (-$38,176) which I would attribute to the appeal of the new school experience down the road in JNCISD plus the dramatic gain in new-build inventory in WISD. Prices are roughly the same in AISD (+$2133) - the blood letting of school redistricting in AISD has passed and there's no reason to see much difference between today and 5 years ago.
- Comparing January 2024 to January 2023, total price for new-builds rose in WISD (+$21K) and AISD (+$26k), but fell for JNCISD (-$43K). Again, you've got to keep in mind these figures are somewhat suspect - only 7 homes sold in JNCISD in January 2024 - hardly a number off which to make broad statistical inferences and the swing in JNCISD prices, shown by the spikes on the graph, capture this.
- In current dollar terms, price per sf trended downward for the first month of 2024 in JNCISD (-$7/sf) & WISD (-$3/sf). AISD saw a $2/sf uptick.
- JNCISD & WISD homes were on the market the same number of days - 69. AISD homes were on the market for 50. New built homes moved slightly faster (5 days) over homes in WISD.
- JNCISD and WISD districts has 4.2 and 4.5 months of inventory, respectively. Inventory in AISD has been steady for the last three months at 3.1 month of inventory.
- New construction in WISD switched to a buyer's market in September 2023 when inventory rose to 6.7 months. January's inventory figure dipped slightly (-0.2 decrease) but at 9.3 months of inventory, new homes sales remain a buyer's market in WISD.
- Since October 2023, both AISD and WISD have seen a drop in new listings. We'll see if conventional wisdom prevails in the next few months and we see this number rise in preparation for summer sales and the monetization of tax refunds over the new few months.
- In January 2024, Wylie West homes sold for more than Wylie East homes for both existing homes (+$64,911) and new builds (+$33,328).
- On a per sqft basis, this rank flipped: All homes in Wylie East sold for $5 more ($173.48) than homes in Wylie West ($169.08). New builds sold for $7/sqft more in Wylie East versus Wylie West. The difference is driven by sf - Wylie West has larger homes. Homes sold in the last month in Wylie West were 2177 sf; homes sold in the last month in Wylie East measured 1731 sf - a 446 sf difference. Typically, the smaller a home, the more the price per sqft - this is because you are whittling the home down to the essentials - like bathrooms or the kitchen - and additional sf add value, just at a decreasing rate.
- Inventory of homes in Wylie West were larger and they stayed on the market longer - this is intuitive: larger, more expensive homes take longer to sell. The gains in inventory seen in WISD have been fueled by new growth in Wylie West - Wylie East has 4.5 months inventory; Wylie West has almost three times that at 13.0 months (but slightly down from a peak of 13.9 months inventory in December 2023). This is mirrored in new listings for new builds - Wylie West saw double (36 v. 18) the number of listings for new builds v. Wylie East. Roughly the same take down of closed sales for the two areas didn't deliver any solution to the problem.
- The graph All Homes - Sales Price (Constant Dollars) uses the Case-Shiller index to remove inflation so real estate prices can be compared across years. The table Average Mortgage Cost below goes one step further: it uses these average, inflation-adjusted home prices by district along with average historical monthly fixed-rate mortgage rates to calculate an average mortgage payment by district. JNCISD is in the lead at $2,004 followed closely by WISD at $1,845 trailed by AISD at $1100. Purchasing power of buyers in these districts is quite a bit different than it was when the average fixed 30-year rate was 2.74% back in January 2021. To compare an average January 2021 mortgage to today, an AISD mortage was $293 cheaper each month, a WISD mortage was $462 cheaper each month and a JNICSD mortage was $766 cheaper each month. In real term, affordability was at its peak in the fall of 2021 for Abilene area home buyers.
Why schools matter to your home's value
In 1956, Charles Tiebout introduced the idea of "voting with one's feet" in his 1956 article A Pure Theory of Local Expenditures. To pull from Wikipedia's synopsis of the article "the model holds that if municipalities offered varying baskets of goods (government services) at a variety of prices (tax rates), that people with different personal valuations of these services and prices would move from one local community to another which maximizes their personal utility. Similar to how shopping and competition lead to efficiency in private good markets, this model holds that individual choices on where to live would lead to the equilibrium provision of local public goods in accordance with the tastes of residents, thereby sorting the population into optimum communities. Basically, if an individual doesn’t like the public goods provision of one town, they can move to the next town over. The model has the benefit of solving two major problems with government provision of public goods: preference revelation and preference aggregation.
Abilene is no stranger to this concept. The best expression of "voting with one's feet" was first seen when AISD redrew the boundaries between Abilene High and Cooper. It was seen again, to a smaller degree, when AISD redrew the junior high boundaries and closed Lincoln Middle School. It was seen when AISD shuttered elementary school campuses in favor of largers campuses - even when the City of Abilene told them their prioritized school closures would produce the greatest, negative neighborhood impact. I say to a smaller degree because, by this point, preference revelation/aggregation was in full swing and home buyers had established a beaten path from Abilene ISD to Wylie ISD.
A nameless friend who is outwardly anodyne when it comes to real estate observed "in 2023, WISD and JNCISD passed their school bonds, the proposed school bond in Merkel ISD failed, and Clyde ISD and Abilene ISD didn't make a bond proposal". Looking ahead, he speculated what this could mean as home buyers continue to reveal their preferences with the school districts they choose.
School preference shouldn't be seen as the only issue that impacts the home market in Abilene ISD. About 1/3 of the land in the Abilene ISD lies in the flood plain and a redraw of those maps by the Army Corp of Engineers back in 2005 didn't help matters. This puts an additional cost on redevelopment. Wylie ISD had open tracts of farmland for development making new home development simple; Abilene ISD was largely developed with limited undeveloped tracts.
It's known among Abilene-area realtors that Dyess AFB personnel whisper among each other that Wylie ISD is the better choice. We look at prices in Wylie ISD and we see higher prices v. Abilene ISD. Most tangibly, we've seen Wylie ISD grow and Abilene ISD enrollment shrink. Now there are districts like Jim Ned CISD and Clyde ISD that are on the lips of home buyers because "the schools are better".
As a broker, my question is what sells at what price and how fast. I ask these questions because I work with home buyers that want to move from an illiquid position in a home to cash that lets them move to a new home with the least amount of hassle. It's undeniable that schools feature largely in this question. To this end, I've pulled together some MLS data to help frame the question (and provided an overview if you don't want to wade through all the data and graphs).
Most of the dollarized data is in current terms - this means data is unadjusted for inflation. As a result, each month's data suggests we've gained in terms of price and homeowner's have experienced a real gain in their equity. To correct for this, I used the Case Shiller Index to adjust some figures from current (nominal or inflated figures) to constant (what economists call real or inflation-adjusted terms) to enable comparability.
AISD v. WISD v. JNCISD
Apart from school district, attributes like age and square footage shoulder a the greatest share of a home's value. Three graphs of total sale price by distrcit are presented that somewhat control for this:
- a graph of all homes sold by district for an amalgamated view of price
- a graph of new homes sold by district - these values are more tightly clustered because this figures controls for age of property
- a graph of homes with >3000 sf sold by district. The idea is a 1000 sf home would feel the loss of 100 sqft acutely; a 3000 sf home less so. The outcome: price increases at a decreasing rate as the home gets larger.
all homes - SALES PRICE (current dollars)
all homes - SALES PRICE (constant dollars)
new built homes - SALES PRICE (current dollars)
homes >3,000 sf - SALES PRICE (current dollars)
PRICE PER SQUARE FOOT
Square footage is the most powerful driver of price. To control for this in a simple fashion, home prices were divided by sqft. Three graphs are used to showcase this:
- all homes by district (reported in constant and current dollars)
- new homes by district (reported in constant and current dollars)
- homes by district measuring >3000 sf
ALL HOMES - $/SF (CURRENT DOLLARS)
ALL HOMES - $/SF (CONSTANT DOLLARS)
NEW BUILT HOMES - $/SF (CURRENT DOLLARS)
NEW BUILT HOMES - $/SF (CONSTANT DOLLARS)
HOMES >3,000 SF - $/SF (CURRENT DOLLARS)
DAYS ON THE MARKET (DOM)
Days on market (DOM) is a measure of pain for the homeowner. Each day on the market means another day of keeping your dogs at the neighbors for showings, keeping the house tidy, paying a mortgage on a home when you'd rather liquidate and port the cash elsewhere. A seller's market shrinks days on market; a buyer's market causes this number to swell.
ALL HOMES - DOM
NEW BUILT HOMES - DOM
HOMES >3,000 SF - DOM
Months inventory is a ratio of current supply of homes offered for sale per the number of homes purchased over a period of time (usually within a month). The result indicates the number of months to take down all homes currently for sale in a market. The Texas A&M Real Estate Center states that 6.5 month inventory means the market is balanced - anything greater than 6.5 months suggests a buyer's market; anything smaller means shrinking inventory, giving sellers advantage in the deal.
ALL HOMES - INVENTORY
NEW BUILT HOMES - INVENTORY
Abilene ISD has more homes than WISD; WISD has more homes than JNCISD. For this reason, AISD will always come first for the number of listings and JNCISD last.
When looking at some of these figures like average price for new build JNCISD homes, the reader likely notices new listing numbers are small. This is the reason I omitted a graph for homes >3000 sf - the JNCISD numbers are too small to be meaningful. When our sample size gets limited; we have to be careful about making infererences about the market from a tiny sample - all it takes is one outlier to skew our statistics.
ALL HOMES - NEW LISTINGS
NEW BUILD HOMES - NEW LISTINGS
Like new listings, closed sales present the same ranking - AISD beats WISD, WISD beats JNCISD. It makes sense - AISD is a two-high school market, WISD a growing 1 high school market and JNCISD is a more rural 3A district.
ALL HOMES - CLOSED SALES
NEW BUILD HOMES - closed sales
WISD East v. WISD West
Now that Wylie seems to be committed to school district mytosis with the creation of Wylie East and Wylie West (and rumblings of a second high school), I thought it would be interesting to see how the two areas perform in terms of housing stats. It's not really an intended application of the Tiebout model - the taxes are the same, the topography is the same - the only thing you could be capturing hedonically (value for non-market things expressed in market records like price) is preference for Wylie East v. Wylie West. This isn't without local precedent; after all Wylie was birthed by the same dynamic when AISD built Cooper HS and 30 years of preferences causes the AISD school board to upend those choices.
ALL HOMES - SALES PRICE (CURRENT DOLLARS)
NEW BUILD HOMES - sale price (CURRENT DOLLARS)
>3000 SF HOMES - sale price (CURRENT DOLLARS)
PRICE PER SQUARE FOOT
ALL HOMES - $/SF (CURRENT DOLLARS)
NEW BUILD HOMES - $/SF (CURRENT DOLLARS)
DAYS ON MARKET
ALL HOMES - DAYS ON MARKET
Over the last 5 years, homes sold in Wylie East typically get contracts quicker than homes in Wylie West. In November 2023, Wylie East homes went under contract 10 days faster than homes in Wylie West.
NEW BUILD HOMES - DAYS ON MARKET
ALL HOMES - MONTHS INVENTORY
NEW BUILD HOMES - MONTHS INVENTORY
ALL HOMES - NEW LISTINGS
NEW BUILD HOMES - NEW LISTINGS
ALL HOMES - CLOSED SALES
NEW BUILD HOMES - CLOSED SALES
This overview of these real estate markets was provided by John Hill. Trained as a Ph.D. economist with specializations in urban and regional economics and public finance and licensed as a real estate broker, John combines a practicioner's approach with academic training in offering these observations.
Questions? Feel free to email or call John at 325.721.4428.
Last updated February 10, 2024 at 8:40 am.