More Than 1,000 Schools Closed—and Home Values Could Take the Hit

More than 1,000 public schools across 700 communities closed last year, according to new data—shuttering a prized neighborhood amenity and potentially putting nearby home values at risk.

Just ask Virginia Morris. She and her family moved to their neighborhood in Oro Valley, AZ, because they saw the local school as a “package deal.”

Copper Creek Elementary was A-rated, close enough to walk to, and deeply tied to the surrounding community—exactly the kind of feature that has shaped homebuying decisions for decades.

But in May 2026, after nearly 40 years in service, Copper Creek closed.

“We never expected in a million years this would be taken away from us,” Morris said at a December meeting of the district’s governing board. “An entire community, and an entire neighborhood, completely gutted.”

Economists have long found that high-performing public schools offer a benefit that extends beyond students. In one landmark study, buyers paid 2.5% more for homes assigned to schools where test scores were just 5% higher.

But that relationship can work in both directions. A strong school can make a neighborhood more desirable. Take it away, and homeowners can lose some of the buyer demand—and the price premium—that came with living near it.

Buyers pay for access to neighborhood schools

“Public schools and homes are bundle goods: Where people live will decide where kids go to school,” explains Jiayi Xu, economist at Realtor.com®. “In other words, people are not just buying a living space but also a seat in a school district, whether they have kids or not.”

It’s a particularly potent package at the elementary school level. Unlike a high school that may draw students across a large area or a charter school with open enrollment, primary-school attendance zones are generally smaller and more closely resemble the boundaries of individual neighborhoods.

Of the 1,025 closed schools identified by Realtor.com in an analysis of National Center for Education Statistics (NCES) data, nearly half were elementary schools—putting that uniquely personal piece of the housing market in play. 

The importance of that connection was on display earlier this year in Sugar Land, TX, as Fort Bend ISD considered closing Sugar Mill Elementary.

“We chose this A-rated school and even bought our home here because of the care, stability, and support Sugar Mill provides,” parent Vicki Haislip told trustees at a January board meeting.

Other residents made the same connection explicitly: One warned trustees that closing a school “completely surrounded by residential homes” would negatively affect the value of those properties.

At school board meetings across the country, parents have pleaded with officials not to erase the place around which their families have built lives. (Melissa Phillip/Houston Chronicle via Getty) The anger at closure hearings often comes from a sense of betrayal: Families bought homes, put down roots, and trusted that the neighborhood school would still be there. (Melissa Phillip/Houston Chronicle via Getty)

Research shows why that concern is not purely sentimental.

A 2023 study in Real Estate Economics tracked Atlanta-area homes before and after unexpected changes to elementary-school attendance boundaries. When a boundary change gave a home access to a substantially better-performing school, its sale price rose about 3% and it was sold about a month faster. A move to a worse-performing school pushed demand in the opposite direction.

On March 9, the Fort Bend school board voted 4-3 to close Sugar Mill.

A school closure can change the housing proposition

While there are a number of studies that put a specific price on the value strong schools add to nearby homes, the evidence is thinner on what discount, if any, appears when a school closes.

One of the strongest studies examined the sudden closure of a well-performing public school in Cedar Falls, IA. Researchers estimated that the school added about 6.8% to the value of homes within its attendance zone, beyond the value associated with its standardized test scores.

Xu agrees that this is directionally true.

“When a school closes or kids get reassigned, nearby home values typically fall,” she explains. “Sometimes the impact goes further, signaling broader neighborhood decline, which can scare off family buyers and depress prices even more.”

But Humberto Marquez, a licensed real estate broker in Texas, suggests that the impact starts well before a school actually closes.

“The real problem isn't the school closure itself—it’s the limbo that comes with it,” he says. “The minute a school gets added to an ‘under consideration’ list, buyers with kids in the area start ruling that neighborhood out.”

Of course, that doesn’t mean every closure will produce an immediate or predictable drop in home prices. But the testimony from families shows the underlying mechanism clearly: They had treated the local schools as foundational to their decision to buy.

It also points to a harder question: How does a desirable neighborhood with a strong housing market lose its school in the first place?

A neighborhood can keep its homeowners and lose its students

Around Copper Creek, nothing about the housing market suggested decline. The median list price was up almost 4% from a year earlier and 11% from three years earlier, according to Realtor.com data.

The same was true in Sugar Land, where median list prices were up 3% from three years prior, even as Texas’ median list price fell about 5%.

But inside the homes, there was a trend line in decline. Fort Bend ISD’s demographer described it as “regeneration.”

Established neighborhoods can lose students as children grow up and empty nesters remain in their homes, while new housing elsewhere adds younger families. The district pointed to new construction as its largest source of enrollment growth.

Arizona officials described a similar process around Copper Creek: Homes were increasingly being purchased by retirees, while some younger families were moving toward less-expensive communities such as nearby Vail and Marana.

In Oro Valley, 35.7% of residents are 65 or older and just 16.3% are under 18, according to U.S. Census Bureau records. The median owner-occupied home value is about $476,000, compared with roughly $414,000 in Vail and Marana. And while Oro Valley’s population grew 2.2% between 2020 and 2025, Marana’s jumped 26.2%.

The numbers hint at a bigger housing-market force behind the enrollment shift: The places where established homeowners have accumulated the most housing wealth are not necessarily the places where the next generation of families can afford to buy.

It's true that the birth rate has fallen to fewer than 1.6 children per woman, down from 2.1 recorded in 2006—the rate needed to sustain the population. And that is showing up in enrollments.

Nationally, NCES projects public pre-K–8 enrollment to fall about 5% between 2022 and 2031, from 34.1 million students to 32.2 million.

But fewer children is only part of the story—where those children live matters just as much. And housing costs help determine that geography.

A recent study found that if housing costs had remained flat after 1990, there would have been 13 million more children born in the U.S. by 2020. The country's total fertility rate in the 2010s would have been 77% closer to the replacement rate if those costs hadn’t increased, the research showed.

At the same time, high home prices can push the families who do have children toward cheaper communities—redirecting school enrollment from established neighborhoods toward newer-growth corridors.

It’s a confounding paradox: The school helps make a neighborhood desirable and valuable. Over time, the next wave of young families gets priced out, and the local school has to close.

And once it does, the equation changes again.

Losing a school can reinforce the shift

A 2022 study using federal school records and Census data tried to answer that chicken-and-egg question.

Across rural U.S. counties, researcher Joseph Sageman found that school closures induced additional population loss in many, though not all, of the counties he studied.

That creates the possibility of a feedback loop, according to Xu.

“If birthrates keep falling, the pool of buyers who actually need a school seat shrinks over time,” she says. “That doesn't mean a decline in housing demand. It means fewer purchasing decisions will be driven by school quality, and more will be driven by other factors such as commute time to work or lifestyle amenities.”

Over time, Xu says, that could “compress the school quality premium, shrinking the value gap between homes with a strong assigned school and those without.”

But, she adds, “national birthrate trends don't necessarily translate evenly to local markets. Migration patterns can offset the effect.”

That distinction is critical. A region can have plenty of housing demand, while the families driving school enrollment migrate from one part of it to another. Once again, Tucson offers a telling example.

In July 2025, months before Copper Creek would be voted to close, Marana Unified opened Tangerine Farms K-8, built for 800 students in what the district calls the “quickly expanding” Gladden Farms neighborhood.

That same month, Vail School District opened Saguaro Creek K-8, its 22nd school, in the growing Rocking K community.

The contrast is striking. One established community would soon lose a beloved school while growing communities were building new ones.

And it may point to the most valuable takeaway for homeowners. School closures are far from a sign that demand for a particular neighborhood is dropping. Instead, they may signal that the people who want—or can afford—to live there are changing.