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>“We know historically that places where minorities live are undervalued or lower priced,” Redfin’s Sheharyar Bokhari said. That, he said, makes them more attra
by thrwy_918 5y ago
>“We know historically that places where minorities live are undervalued or lower priced,” Redfin’s Sheharyar Bokhari said. That, he said, makes them more attractive to investors, driving up prices for residents.
This is undoubtedly true, and hurts potential first-time-buyers in those neighborhoods, but at the same time it benefits existing homeowners in undervalued neighborhoods by increasing the value of their homes.
Having predominantly black neighborhoods cost less than comparable neighborhoods that are not predominantly black is probably not, on balance, a good thing.
- jandrese 5y agoThe caveat is that in many of those neighborhoods the units are rentals, so the people living in the house don't see any of the gains from the property value. They only see their rent increase as the value of the land goes up.
- oh_sigh 5y agoThe caveat to the caveat is that property value doesn't always go up, and there are benefits to not owning your primary residence. If property value goes down, it is better to be a renter, because you just end up with cheaper rent instead of an underwater mortgage, or you can decide to just exit the neighborhood if things get too bad.
- jandrese 5y agoThat said, property values tend to go up over time. While there are cases of it going down in most places the trend is upward. If you are betting on them going down you are usually going to lose the bet. Renting is usually a bad bet.
- oh_sigh 5y agoThat really depends on your local area and your needs. If you decided to keep renting in Vancouver instead of buying in 2002...yeah, you made a mistake. If you decided to keep renting in Detroit instead of buying in 2002 - you have come out quite ahead. Also, even if property values tend to go up over time, that doesn't mean that homeowners can bridge the gap of maintaining ownership in down periods. If you bought in 2006, you might find yourself underwater on your mortgage 3 years later, with stagnating or declining wages and threats of unemployment, and forced to sell, even if you believed the market would rebound eventually.
- WaxProlix 5y ago> but at the same time it benefits existing homeowners in undervalued neighborhoods by increasing the value of their homes. Predominantly renter class people will not benefit from housing value increases. Their landlords will, though.
- dilap 5y agoIt hurts the traditional character of the neighborhood, too, though: as the people that historically lived there move out (cashing out or just pushed out by rents or property taxes), and an entirely different demographic replaces them at a new price-point.
- bo1024 5y agoOthers have pointed out some problems resulting from gentrification, but another is that of your home price rises a lot, so do your property taxes and you can still end up priced out of your own neighborhood that way.