]]> uncaptionedThe real estate brokers' mantra, "Location, location, location!" ought to be changed to "Location, location, education." The reason is that the quality of local schools is just as important to home values as location. If there's a mix of strong local public and private schools that are sending lots of graduates to Ivy League colleges, parents will spend top dollar to live there.

But you can get a lot more than a kid with a Harvard diploma. "The investment that communities make in their school system pays back in more than the education of their children. It also pays back in property values," says Ruth Kennedy , a principal at real estate services firm LandVest in Boston. "Property values can vary as much as 30% to 40% based on the local school district."

Indeed, in a January 2003 National Bureau of Economic Research paper, co-authors Lisa Barrow and

Cecilia Rouse found that for every $1 increase in state aid spending per pupil, property values increased $20 in aggregate per pupil housing.

"Given that people choose where to live based on the quality of schooling, it seemed reasonable to conclude that the attractiveness of schooling helps prop up property values," says Rouse, a professor of economics and public affairs at Princeton University. "The two are completely intertwined."

So where are these schools? Just ask David Savageau , editor of the 22-year-old Places Rated Almanac, which rates 354 areas by factors including cost of living, crime, climate and schooling. Its list of America's best and worst educational communities should be required reading for the parents of any school-age child.

In order to rate cities' educational resources, Savageau looked at such criteria as local school funding (as opposed to state or federal funding); the mix of private and public schools; the student-to-teacher ratio; library popularity, which breaks down the reading habits of residents; the degrees offered by local colleges; and college options for local residents. In the most recent millennium edition of the almanac, the top-ranked U.S. metro areas for education (we excluded one Canadian entry) rated as follows:

Rank Metro Area Score
1 Raleigh-Durham-Chapel Hill, N.C. 100.00
2 Boston, Mass.-N.H. 99.71
3 Albany-Schenectady-Troy, N.Y. 99.43
4 St. Louis, Mo.-Ill. 99.15
5 Chicago, Ill. 98.86
6 Rochester, N.Y. 98.58
7 Austin-San Marcos, Tex. 98.30
8 San Francisco, Calif. 98.01
9 Washington, D.C. 97.73
10 Dayton-Springfield, Ohio 96.88

Most of the education hubs also have established institutions that offer long-term value to the community. For example, the State University of New York at Albany was created in 1844, and has about 17,000 students enrolled in nine colleges and schools. Not only does the university provide a fertile environment that encourages learning, it is also a major employer that--unlike many now-defunct tech companies--is unlikely to endure massive layoffs.

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]]> "You don't see a lot of colleges folding overnight," Savageau says. "And you don't see colleges being added at a tremendous rate. The quality of schools are an important consideration behind mobility, and the better the education, the pricier the home."

In the fourth-quarter median home price report from the National Association of Realtors, nine out of Places Rated's top ten education hubs saw median home prices rise steadily. Only six rose above the national average, though, and one area's median home price actually declined; Austin's median home price shrank -0.5%, which was undoubtedly part of the tech-bust aftermath.

Education hubs don't always offer the best professional opportunities. Rochester, N.Y., and Dayton, Ohio, may rank among the top ten places for educational resources, but in terms of five-year salary growth, Forbes/Milken ranked them among the bottom 50 metro areas (see "Best Places"). Both cities, however, are significantly more affordable than Boston or Chicago. For example, the median home price in Dayton is only $110,000, while the median home price in Boston is $386,300.

Besides looking at the education rating for all ten hubs, we looked at the median home prices; five-year salary growth; and home price appreciation ranking, which measures percent change in price since 1990, as determined by the Office of Federal Housing Enterprise Oversight (appreciation rankings range from 1 to 185, with 1 representing the highest price increase).

Click here to see if any of the top ten education metro areas looks right for you.