In a new Redfin report, it was found that homes in Black neighborhoods are undervalued by an average of $46,000 nationwide. In Philadelphia, homes in primarily Black neighborhoods are undervalued by an average of about $26,000, or 27%, compared with similar homes in primarily white neighborhoods. The average sale price of homes in primarily Black areas of Philadelphia is about $96,600, compared with $162,600 in primarily white areas.
A neighborhood is considered “primarily black” if 50% or more of its residents are black.
Along with homes in primarily Black neighborhoods being undervalued, black homebuyers are also having a harder time accessing home loans. In Philadelphia, about 17% of Black people who apply for mortgages are denied, compared with about 6% of white applicants, according to a Redfin report based on 2019 Home Mortgage Disclosure Act data. The average property value in 2019 on these loans was $165,000 for Black applicants and $295,000 for white applicants.
In an interview with the Philadelphia Inquirer, Habitat for Humanity Philadelphia’s CEO Corinne O’Connell said “I am in no way surprised by the finding” when asked about the valuation gap in Philadelphia. “The valuation gap is a direct result of decades of purposeful, sustained segregation by the government — federal, state, local.”
You can read the full Redfin Report about the valuation gap in housing to learn more.
Habitat for Humanity Philadelphia’s CEO Corinne O’Connell sat down for an interview with WURD to discuss more about the valuation gap. You can listen to full interview below: