Homes In Black Communities Undervalued By An Average Of $46K, Study Finds

Findings from new real estate studies show how Black Americans continue to shoulder the burden of housing discrimination, both in the value of their homes when they sell them, and in participating in the purchasing process in the first place. 

A study conducted by Redfin, a national real estate brokerage found that homes in Black neighborhoods are undervalued by an average of $46,000. The study examined over 73 million houses listed and sold between the beginning of 2013 and February of this year, CNN reported. An analysis of the home exposed a gap between the homes sold in predominantly Black neighborhoods compared those sold in white ones. 

“Our analysis rules out all the factors that are typically associated with home value and still finds a significant difference between the values of otherwise nearly identical homes in similar Black and white neighborhoods,” Redfin’s senior economist and the study’s lead author Reginald Edwards told the outlet. “We’re left with bias and systemic racism to explain the variation in home values. 

Another real estate analysis says systemic racism is causing Black Americans from participating in the latest housing surge. According to the most recent Home Buyers and Sellers Generational Trends report by the National Association of Realtors, first-time home buyers of all races are getting outbid in the housing market where supply is not keeping up with demand. 

Black Americans, however, made up just five percent of home buyers between July 2019 and July 2020. Most of those purchases were made by Black millennials during the first portion of last year. Latino home buyers made up only seven percent of the purchases during that same year. 

To address the discrimination, Edwards recommended homebuyers of color who have their homes appraised should get in writing what exactly contributed to value estimates. 

“Make them put it on paper,” he told CNN. “Is it the condition of the home’s appliances? Quality of upgrades made? Architectural features? Appraisers should have to justify why two similar homes would have such different valuations.” 

Other real estate experts said the nation needs more homes on the selling list so that biding doesn’t provide an opportunity for discrimination. 

The National Association of Realtors chief economist Lawrence Yun said people who feel that they’re being discriminated against should file a report with the Office of Fair Housing and Equal Opportunity and “find another agent.” 

Photo: Getty Images  

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