By Richard Johnson
- About 15.4% of single-family properties in majority-Latino census tracts and 12.5% of homes in majority-Black areas appraised lower than their contracted price
- With every 1% increase in the proportion of the Black population for a particular zip code, there is an estimated decrease in home values of $2,581
Homeownership still remains the primary driver of household wealth, but in majority-Black neighborhoods these residences are worth 23% less, or an average of $48,000 per home, than comparable homes with very few or no Black residents due to low appraisals. Primary residences are the largest asset among households across all age groups, except for the 55-64 year old demographic. However, such an investment is merely four stale walls and a roof, if one cannot act upon that investment because of a low appraisal value. Wachu’ mean Rich? Ok, let me break it down.
Why This Matters: About 15.4% of single-family properties in majority-Latino census tracts and 12.5% of homes in majority-Black areas appraised lower than their contracted price between 2015 and 2020, according to a report from Freddie Mac. For example, with every 1% increase in the proportion of the Black population for a particular zip code, there is an estimated decrease in home values of $2,581. It’s all about supply and demand, buyers and sellers, “gunz & butter baby” (Baby Boy reference).
Appraisals for homes set the price, and it’s the appraiser’s culmination of everything from looking at the condition of the home, the surrounding area and other factors who determine the price. If the appraisal is lower than expected, this reduces the wealth that can be made over the homeowner’s lifetime, since the value of the home when first sold is taken into consideration when resold. This can quickly and easily depress the property values of an entire community and addressing appraisal discrepancies could help close America’s racial homeownership gap. About 45% of Black families and 50% of Hispanic families owned homes in 2020, compared with 75% of white families and 67% of Americans overall, according to the Census Bureau.
Situational Awareness: Apparently it is not enough to simply stack, store and save for a lifetime to purchase a home, pass it along to your offspring to reduce their financial burdens and create generational wealth. One must also confront a system that aims to suppress our concerns, stifle our mobility and make the American dream, just that, a dream. So, when you hear people say it takes a village, don’t just consider it as an abstract idiom used to impress upon the listeners how we need to come together and all that jazz. Consider it as a call-to-action, rather a wake-up call. Now WAKE-UP, the appraiser’s at the door!
CBx Vibe: “Already Home” Jay-Z Feat. Kid Cudi
