What’s the value of college?
Some would say it leads to a good job; others would contend the knowledge gained is its own reward.
And, plenty of others believe that a college nearby makes for a great place to live.
A recently published study by economists at Rutgers University and The College of New Jersey shows that housing prices tend to be higher in college towns, with smaller colleges and four-year residential schools having the most positive pricing impact.
While that study used price data from the year 2000, values in many college towns appear to have been more resistant to the downturn, too.
“It would stand to reason that housing markets in college towns would be more stable … as the towns tend to have more stable economies and are less likely to attract speculative investors,” observes Celia Chen, economist with Moody’s Economy.com.
Location is a key support to home values. So what is it about land surrounding an ivory tower that makes it a desirable place to live?
Well, as die-hard sports fans can attest, each school is unique – lending distinctive character to the area. Still, experts have observations about who is giving homebuying a college try, and why:
Retirees Thinking Differently
“A lot of people are rejecting the stereotype of moving to a fifty-five-plus community,” observes John Brady, founder of TopRetirements.com. “Retirees moving to college towns are interested for stimulation … taking classes, the sporting events, and the recreational facilities provided by the college.”
For instance, Madison, home of the University of Wisconsin, is attracting retirees who want to enjoying top-quality health services, bike paths, cultural and sports events. Often, the retirees own another condo down south to escape the worst of winter, observes Dan Kruse, with Century 21 Affiliated in Madison.
Although retirees like the university ambiance, adds Kruse, they usually choose neighborhoods where fewer students live, to avoid noise and late-night activity.
Families Making Educated Choices
Since many college towns have high-quality public schools, they also attract families – especially when the town is within commuting distance of employment centers, notes Blake Gumprecht, a professor at the University of New Hampshire and author of “The American College Town” (University of Massachusetts Press, 2010).
In fact, towns home to elite, private college tend to have features of upscale suburbia, with relatively pricey housing and quality schools, he notes. “Places like Middlebury, Vermont, home to Middlebury College, and Hanover, New Hampshire, where Dartmouth is, have a higher paid faculty than many state schools and can support higher priced housing,” illustrates Gumprecht.
While the private, elite college provides one type of family-friendly atmosphere, other campuses also have appeal, depending on what elements a family values, Gumprecht says.
“For instance, large state universities typically draw students from all over the country and world, and have a cosmopolitan atmosphere and good schools,” explains Gumprecht. “And schools with a religious orientation may give [the town] a more conservative atmosphere.”
Investors Renting to Students
In a recent survey of 425 of its agents working in or near college towns, Coldwell Banker found that these locales continue to see purchases of rental housing, with 73 percent of agents reporting a “significant number of investors” buying homes near campus to rent out during the past five years, and only 21 percent reporting a decline in this activity in the past five years.
Indeed, even recessionary periods can be a boon to college towns, notes Gumprecht, since displaced workers return to school to retool their career.