Home Undervaluation in Some Neighborhoods - Can we do better?

Question

https://www.redfin.com/news/un... We cannot re-write a better history, but can we do better as a field moving forward?

Nathan Gesner · Answer

You can't just look at house prices and declare America is a racist country.

The study is based on the last ten years, six of which had a black President. Most of these black communities (maybe all of them) have been controlled by the Democrat party for decades and are heavily represented by the black community. Atlanta is one they specifically mention and they've had black mayors, a city council that is majority black, black police chief, etc. Heck, John Lewis served on the City Council and then spent 30 years in Congress representing Atlanta. If systemic racism exists there, who's fault is it? The white couple that sell their house or the black politicians creating the "system"?

As Thomas Sowell famously said, "“Racism is not dead, but it is on life support — kept alive by politicians, race hustlers and people who get a sense of superiority by denouncing others as ‘racists."

Ron Brady · Answer

@Bill Brandt Thanks for sharing your thoughts & perspectives. I remain persuaded by Redfin’s data that there is an issue we in the real estate profession should try to address. But its truly a great and free country where you & I can differ and we can each address, or not, the issue as we each see fit, or not. Best wishes for your investing success!!

Bill B. · Answer

I DARE you to go in to any of these communities, improve the housing stock, and raise values. You will be called a racist before you are done. Don’t you know gentrification is racism in action? The only reason racist you racists would ever improve a neighborhood is to move the existing population out. I THINK the LGBT+++ community gets a pass on this, but that was 5 years ago, they might be racists now too?

Don’t forget, if you improve the inner city your racist, and if you flee the inner city, you’re racist. It’s almost like the word doesn’t mean anything any more, but never forget, you’re racist no matter what you do.

It’s almost like the government causes a problem, then blames racists and says more government is the only solution.

Bill B. · Answer

You too Ron. It's always great to meet someone who's willing to listen these days. I hate the phrase "Agree to disagree" but but we can at least say we were heard. Good Luck in all you do.

Bill B. · Answer

I don’t know of any real estate investors that research the race of the population before investing, not one. If you do, then find new friends/partners. Maybe where you invest there are several “identical” neighborhoods that are performing different. We don’t have that in Minneapolis or Vegas where I invest. Some are closer to the strip, some are closer to mountains lakes or rivers, some have better schools, they are closer or farther from busy roads.

If one area is “nicer” and it costs the same to live there one neighborhood will soon be empty and cheaper and one area will be full and more expensive. If they aren’t the same price to rent/buy then you have a pretty major error by a “real estate” company calling them “the same in all aspects”. Price is a MAJOR aspect of real estate, maybe the largest.

I’m not saying you shouldn’t feel free to put your money where you want, I’m saying that doesn’t give anyone the right to tell others what to do with their money just by calling them racist. It’s like they don’t understand the world doesn’t provide for equal outcomes in virtually anything whether humans are involved or not. And defaulting to racism isn’t a good argument. Especially when they’ve gotten to the point of “showing up on time” and Math are being called racist.

Ron Brady · Answer

@Nathan G. - Thanks for weighing in on my  post and on this topic that can often be hard to discuss these days.  I ask "can we do better" as I see the Redfin-raised issues as a) a problem and b) something we real estate investors can try to address.  I am unable to determine from your response if you also see this as a problem or not.  Thus, a question for you if your are willing to share: Do see this issues of different valuations based solely on race as a problem? If so, I welcome hearing your thoughts on how we, as an industry, might address it.  If you don't see it as a problem we can or should address, is there something Redfin's data analysis missed that causes you to take this perspective? I want to make sure I did not miss it too.

@Bill Brandt - Thanks for weighing in on my post and on this topic that can be hard to discuss these days.  I interpret the Redfin analysis to say that the neighborhoods it analyzed are equal in all aspects except race, not that any particular area merits housing stock improvements or gentrification as you've shared.  This said, I may have missed something in the article and I am ready to be corrected if you point me to portion of the article that I may have missed or mis-read.   Also, and I'm not sure if this is what you were getting at so feel free to respond if it is not, my wife and I invest in various types of areas for the sake of portfolio diversification in the same way that we invest in stocks and bonds of various risk-reward levels.  This way, if there is a flood that hits one of our areas, we're not completely wiped out by it. Final thought: We've not (yet) been being accused of being racist.  This said, because we are black each of us has been called a few other challenging words quite a few times in our lives.  On this I think we can both agree: that no one should ever be called a name based on the color of their skin or other characteristic.

Home Undervaluation in Some Neighborhoods - Can we do better?

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