(I was debating on writing this for a client but it IS very controversial and in the end, my client felt uncomfortable with the topic even though they agreed to everything written. I'll leave the article as is and let you weigh in on this. I'm not an agent currently so I feel somewhat in the clear just talking about it. But would love to know your feedback on this interesting topic and something that is very fresh in today's society)
Black net worth is generally lower than white net worth... yup, I said it. But I didn't say it, an article in CNN recently stated that African-American wealth is not protected by homeownership. Black people who purchased their first home between 2000 and 2010 have actually lost more equity than white people who bought in the same time frame.
Why is this?
A Professor of policy studies at John Hopkins University ran a report and found stark racial differences. African-Americans who purchase their first home between 2003 and 2005 suffered a 23% loss in net worth however in the same period, the net worth of white first-time homebuyers jumped as much as 50%. Net worth of white first-time home buyers increased by an average of $24,000 while net worth of black first-time homebuyers decreased by nearly $17,000. After 2009, net worth for black first-time homebuyers decreased 43%, compared to only 33% for white homeowners. While this is primarily dealing with real estate worth, net worth generally includes assets such as retirement savings and earnings, minus any debt owed against those assets.
The racial wealth gap is nothing new in the United States; where the median wealth for white families is approximately $134,000 compared to blacks and $11,000 and Hispanics at around $14,000. African-Americans tend to accumulate wealth connected to the value of their home.
Without touching too deeply into the PC-Realm, the main reason that African-Americans lost more wealth on their home is that they purchased homes in a black majority community experiencing high rates of foreclosure and declining rates of home ownership.
So, in our "equal housing" world where we are not allowed to steer anyone to a particular community or not, is it appropriate to suggest articles such as this, stating that buying in a primarily black community may not be the best option for resale value and equity? Where does the term "steering" come into play? Would we serve our African-American clients better by suggesting a home in a primarily white community for reasons of equity and net worth?
It's an interesting topic, especially for real estate agents whose primary job is to work for the benefit of our clients to the best of our ability. Would we be harming our clients by not suggesting this type of statistic?