["Real Estate Economics, EarlyView. ", "\nAbstract\nExisting literature has overlooked families' flight to quality triggered by school admission uncertainty and its real estate market and welfare consequences. We use an overlapping generations model integrating human capital, residential choices, and educational decisions to link admission uncertainty to the real estate market and welfare. Micro‐level data reveal the policy effects of Shanghai's “Equal Enrollment of Public and Private Schools” (EEPPS). The findings suggest that (1) EEPPS‐induced admission uncertainty shifts affluent families from private schools to high‐quality public junior high schools, elevating housing prices. (2) Policy effects are more pronounced in neighborhoods with access to superior schools. (3) EEPPS shows no significant effect on housing transactions in lottery‐based public school admission areas or on rental markets. (4) EEPPS reduces private education investment and weakens affluent families' intergenerational persistence while improving low‐income students' access to quality private schools. However, EEPPS‐induced rising housing costs reinforce low‐income families' class stratification, ultimately reducing social welfare.\n"]