Black neighborhoods fall behind in housing market recovery, study shows

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Most economists would agree that we’ve fully recovered from the recession — the national economy is stable, jobs growth is robust and the majority of homes have regained or exceeded their 2007 pre-recession value.

But different metros have recovered at varying rates, and some have actually fared worse, as evidenced in The Washington Post’s The Divided American Dream, an in-depth and multi-part feature about the connection between race, class and the ability to build long-term wealth through homeownership.

Four WaPo reporters dove deep into Black Knight Financial Services home value data from 2004-2015, and their findings revealed that single-family homes in wealthier, predominately white neighborhoods have appreciated, on average, by 21 percent.

Meanwhile, single-family homes in predominately black neighborhoods are twice as likely to have homes that are worth less post-recession.

“The findings of The Post’s analysis underscore another way in which the economy, despite its improvements over the past several years, continues to deliver better returns for some Americans than others,” wrote WaPo reporter Kat Downs.

“In good times, housing converts income into wealth. It turns a paycheck into the next generation’s inheritance. But in neighborhoods that haven’t weathered the past decade as well, homes have become a source of debt, a physical trap and an obstacle to life’s other goals,” she added.

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Home values along race and class divides

In addition to an interactive infographic, the WaPo team produced four long-form pieces that focused on San Francisco, Atlanta, Charlotte, North Carolina and Washington, D.C., four major metro areas that are experiencing gentrification.

The difference in home values between North and South DeKalb County. Source: The Washington Post’s ‘The Divided American Dream’

In DeKalb County (Atlanta), the difference in home value appreciation between the predominately white northside and the predominately black southside is stark: Homes in North Dekalb have appreciated by as much as 40 percent while homes in South DeKalb have depreciated by 40 percent.

For example, one homeowner says the home he bought in 2005 for $269,000 was recently valued at $189,000 when he tried to refinance his mortgage.

“It just does not make sense,” he said. “You’ve got doctors, lawyers, teachers, all kinds of professional people, retired military like myself, who’ve done everything right — everything right — and it never seems to work out in our favor.”

In the bustling tech metropolis of San Francisco, home values have skyrocketed as much as 96 percent to an average of $2,247,333. Meanwhile, homeowners in Stockton have taken quite the hit: Their homes have depreciated by 21 percent since 2005.

At one point in time, residents in San Francisco and Stockton had similar average incomes and the home value gap was much “narrower,” said Jeff Michael, director of the Center for Business and Policy Research at the University of the Pacific in Stockton.

But, as San Francisco became a tech mecca, its income growth began to outpace the income growth in the Stockton, where the rich agricultural market was waning. Furthermore, Stockton residents could no longer afford the homes they got with subprime loans during the city’s building boom.

That has left most residents with homes that are underwater. It has also left them having to weigh the choice between keeping their home or becoming a renter.

In Washington, D.C. and Charlotte, North Carolina, the stories are the same — gentrification matched with racial and wealth inequality has put minority communities behind the eight ball, while wealthier, white communities continue to thrive.

“Many of the disparities reflect existing divisions in America that have been widened by the housing turmoil,” Downs concluded. “The bubble was a broadly shared experience — values rose rapidly in communities across the country in the early 2000s — but what happened next was not.”

“The result is that this housing cycle — spanning the bubble, bust and recovery — has left vastly different marks on communities across the country. For some families and neighborhoods, the legacy will linger for years. For others, its memory has already faded.”

How have home values in your city changed?

Here are the home value changes in the nation’s 50 capitals:

    1. Montgomery, Alabama: -1 percent to $137,478
    2. Juneau, Alaska: +38 percent to $368,986
    3. Phoenix, Arizona: +16 percent to $237,493
    4. Little Rock, Arkansas: +12 percent to $170,524
    5. Sacramento, California: -4 percent to $333,755
    6. Denver, Colorado: +32 percent to $350,694
    7. Hartford, Connecticut: +3 percent to $241,137
    8. Dover, Delaware: +10 percent to $209,527
    9. Tallahassee, Florida: +4 percent to $180,996
    10. Atlanta, Georgia: +1 percent to $194,798
    11. Honolulu, Hawaii: +56 percent to $716,727
    12. Boise, Idaho: +23 percent to $207,363
    13. Springfield, Illinois: +16 percent to $171,193
    14. Indianapolis, Indiana: +12 percent to $173,854
    15. Des Moines, Iowa: +13 percent to $185,635
    16. Topeka, Kansas: +13 percent to $142,674
    17. Frankfort, Kentucky: +10 percent to $228,120
    18. Baton Rouge, Louisiana: +32 percent to $190,094
    19. Augusta, Maine: Data not available
    20. Annapolis, Maryland: +12 percent to $507,942
    21. Boston, Massachusetts: +18 percent to $419,084
    22. Lansing, Michigan: -8 percent to $145,748
    23. Saint Paul, Minnesota: -19 percent to $140,944
    24. Jackson, Mississippi: +18 percent to $220,747
    25. Jefferson City, Missouri: Data not available
    26. Helena, Montana: +54 percent to $224,201
    27. Lincoln, Nebraska: +16 percent to $164,882
    28. Carson City, Nevada: -2 percent to $240,747
    29. Concord, New Hampshire: unchanged at $228,489
    30. Trenton, New Jersey: -3 percent to $280,428
    31. Santa Fe, New Mexico: +9 percent to $313,175
    32. Albany, New York: +25 percent to $224,752
    33. Raleigh, North Carolina: +19 percent to $233,566
    34. Bismarck, North Dakota: +91 percent to $284,378
    35. Columbus, Ohio: +10 percent to $186,390
    36. Oklahoma City, Oklahoma: +30 percent to $258,070
    37. Salem, Oregon: +30 percent to $203,627
    38. Harrisburg, Pennsylvania: +19 percent to $190,521
    39. Providence, Rhode Island: -4 percent to $268,761
    40. Columbia, South Carolina: +12 percent to $238,792
    41. Pierre, South Dakota: +48 percent to $268,491
    42. Nashville, Tennessee: +31 percent to $222,222
    43. Austin, Texas: +53 percent to $283,017
    44. Salt Lake City, Utah: +50 percent to $282,198
    45. Montpelier, Vermont: +43 percent to $249,893
    46. Richmond, Virginia: +17 percent to $232,750
    47. Olympia, Washington: +24 percent to $249,130
    48. Charleston, West Virginia: +22 percent to $142,690
    49. Madison, Wisconsin: +12 percent to $232,243
    50. Cheyenne, Wyoming: +34 percent to $230,629

Want to see the data for your specific ZIP code? View WaPo’s full study here.

Email Marian McPherson.