Compared with homes in primarily white neighborhoods, homes in primarily Black areas have consistently been valued at tens of thousands of dollars less over the last decade, after accounting for fundamental factors that contribute to home values, like square footage and walkability.
The discrepancy is a way to measure the cost to Black families of racist housing policies like redlining, continued racial bias in mortgage lending and appraisals, and inherent racism.
Editor’s note: An earlier version of this report incorrectly stated that Black neighborhoods are undervalued in every city included in our analysis. There are three cities—Pittsburgh, Houston and Fort Wayne, IN—where homes in Black neighborhoods are not undervalued after adjusting for the fundamental factors included in our methodology. The relevant language has been amended. We also updated the headline and the sections about the roles of appraisers.
The average home in a primarily Black neighborhood nationwide is worth $46,000 less than a comparable home in a primarily white neighborhood.
That’s according to a Redfin analysis of value estimates for more than 7 million homes that were listed and sold from 2013 through February 2021, accounting for the fundamental factors that contribute to a home’s value, such as size, condition, neighborhood amenities and schools.
“Our analysis rules out all the factors that are typically associated with home value and still finds a significant difference between the values of otherwise nearly identical homes in similar Black and white neighborhoods. We’re left with bias and systemic racism to explain the variation in home values,” said Reginald Edwards, a senior economist at Redfin. “Today’s Black homeowners are missing out on $46,000 worth of wealth due to racist housing policies that were outlawed in the 1960s and continuing biases among homebuyers and housing professionals in parts of the homebuying process like appraisals and mortgage lending—and that’s $46,000 that would multiply as the years go on and benefit future generations.”
The fact that homes in Black neighborhoods are worth less is one reason for the racial wealth gap in the U.S., as home equity is a major way to build wealth. Black Americans are far less likely to own homes than white Americans: Just over 44% of Black Americans own the home they live in, versus 74.5% of white Americans. The Black families who do own their homes have less equity than other races, with median home equity of $89,000 in January 2021 versus $113,000 for white families.
“The undervaluation of homes in Black neighborhoods is a problem worth addressing in 2021 because it has a very real impact on the financial well-being of Black Americans,” said Redfin Chief Economist Daryl Fairweather. “The wealth people accumulate in their homes affects so many long-term outcomes for families, from the ability to fund college and other educational opportunities to having enough money to start a new business. The less money you have in your home, the bigger an unforeseen crisis like a huge medical bill or urgent car repair becomes. What’s more, low property values mean lower taxes in Black neighborhoods. That may seem like a benefit, but it ultimately continues the cycle of underinvestment. Policymakers should actively try to break the cycle by sending more dollars to undervalued Black neighborhoods.”
Although this analysis measures the undervaluation of homes in primarily Black areas after accounting for similarities and differences in neighborhoods, racial bias has also led to gaps in amenities between Black and white neighborhoods. For instance, areas with a high share of Black residents are likely to have less access to green space than white neighborhoods, and schools in minority neighborhoods are much more likely to be underfunded than those in white neighborhoods. Discrepancies like those undervalue homes in Black neighborhoods beyond what’s measured by this analysis.
The home-value gap between Black and white neighborhoods has remained essentially the same over the last decade
The value gap between homes in Black and white neighborhoods has held steady over the last eight years, fluctuating just slightly year by year. Homes in primarily Black neighborhoods nationwide were valued at an average of roughly $41,000 less than comparable homes in primarily white neighborhoods in 2020, compared with a $46,000 devaluation in 2013.
“No real progress on the racial home-value gap has been made over the last decade, which highlights the depth of the problem and how difficult it is to change,” Fairweather said. “There isn’t a policy that would make people less prejudiced. We would need to see a broad cultural shift in the way homebuyers view neighborhoods that are predominantly Black. I’m hopeful that can happen. It used to be that many white homebuyers would consider a neighborhood undesirable if there were any Black residents at all, but now diverse neighborhoods aren’t as stigmatized. However, there still appears to be a stigma against primarily Black neighborhoods. Unfortunately, the longer Black Americans have lower home values than their white counterparts, the longer they are missing out on wealth that could be used for other investments and to pass along to their children.”
Though undervaluation of homes in Black neighborhoods is larger in 2021 than any other year included in this analysis, the 2021 data only accounts for data through February and is likely to change as the months go on.
Case studies: Undervaluation of homes in Black neighborhoods in Atlanta and Chicago
To illustrate undervaluation, we looked at several homes that have sold over the last five years: Two in Atlanta, and two in Chicago.
Homes in primarily Black parts of Atlanta are undervalued by over $36,000
In Atlanta, homes in primarily Black neighborhoods are valued at an average of $36,000 less—or 33% less—than homes in primarily white neighborhoods.
This 2,000 square-foot townhouse, located in a gated community in the Riverside Park neighborhood in Atlanta—which is 54% Black—sold for $300,000 in May 2019. And this similar 2,200-square-foot townhouse, located about 12 miles east in the Briarcliff Heights neighborhood—which is 17% Black—sold for $412,000 in June 2020.
Although home prices in the Atlanta area did rise slightly in the year between those two home sales, the $112,000 discrepancy between those two homes is stark. The amenities in each neighborhood are comparable, with restaurants, shops and walking trails nearby. The homes both have three bedrooms and three bathrooms, and each home has a Walk Score between 30 and 40, meaning most errands require a car.
School ratings are often cited as a reason for homes in certain neighborhoods selling for more than homes in other neighborhoods, but in this case the schools in the primarily Black neighborhood have higher ratings. The high school in Riverside Park is rated 7 out of 10 stars, while the high school in Briarcliff Heights is rated 5 out of 10 stars.
Homes in primarily Black neighborhoods in Chicago are undervalued by more than $56,000, accounting for crime rates
Crime rates are one factor in sale prices. Incorporating crime rates into the city-level analysis for Chicago shows that all else being equal—including crime rates—homes in primarily Black neighborhoods are valued at an average of $56,000 less than comparable homes in primarily white neighborhoods. Crime rates aren’t included in the national analysis because there’s insufficient data for many cities; Chicago is one of a handful of cities for which we included crime rates in our analysis.
“Homes in majority-Black parts of Chicago are valued lower, and the cycle set in motion by policies like redlining make it tough to equalize home values,” said Arnell Brady, a Redfin Mortgage advisor based in Chicago. “There’s simply a perception that a home in mostly Black Bronzeville, for example, is worth less than a home in Lincoln Park, which is mostly white. It might be the exact same house, but the demographics and amenities of the neighborhood are different.”
Although neighborhood differences contribute to the gap in home values, similar homes in similar neighborhoods still show a gap in home values when the only observable difference is the racial makeup. To illustrate the point, we compared two similar properties in neighborhoods with similar crime rates on the South Side of Chicago. This 1,300 square-foot single-family home, located in the Beverly View neighborhood—which is primarily Black—sold for $172,000 in November 2017. And this home, also a 1,300-square-foot single-family property and located about three miles south in the Beverly Hills neighborhood–which is primarily white–sold for $217,500 in July 2016.
Both homes have three bedrooms and two bathrooms. They’re located so close to each other that they’re zoned for the same middle school and high school, and they each have a Walk Score of 47, meaning most errands require a car.
Median home prices in Chicago dropped by $15,000 between July 2016 and July 2017, but even taking that into account, these two comparable homes in similar neighborhoods should have sold for much closer to the same price.
See the final section of this report for undervaluation information for the 50 most populous cities in the U.S. with sufficient housing market data for primarily Black neighborhoods.
A combination of causes: Current racial biases and systemic racism contribute to the continuing disparity in home values in Black versus white neighborhoods
Bias in the homebuying process like searching for homes with real estate agents, appraisals, mortgage lending can contribute to the undervaluation of Black neighborhoods by discriminating against Black homebuyers and homeowners, whether the discrimination is conscious or not. That has exacerbated the lingering effects of racist early-twentieth-century housing policies like redlining and racial covenants that were some of the original drivers of undervaluation and keeping Black families out of desirable neighborhoods.
Maryland Redfin agent Hazel Shakur said she has noticed inherent racial bias in home values both in her job as a real estate professional and in her personal life.
“When I had my home built in 2004, I chose between two locations: Prince George’s County, which is relatively affluent and primarily Black, and Montgomery County, also affluent but primarily white. It would have cost $100,000 more to build in Montgomery County than in Prince George’s County, and that’s for an identical home,” Shakur said. “I chose to build in the primarily Black neighborhood because the home was more affordable, but it was a hard decision. I realize the other house probably would have gained more value over the years.”
“That’s partly because of historical racism that separated Black families from white families, who lived in more desirable, more valuable areas,” Shakur continued. “But it’s partly because of continued bias. For instance, Black homebuyers tend to come to the table with down payments of less than 10%, whereas white buyers are more likely to put 20% down. It seems like appraisers often place higher values on homes when the buyer has a higher down payment, whether they’re doing it consciously or not. So right out of the gate, a house in a white neighborhood is valued at more than the same house in a Black neighborhood.”
Real estate agents may steer Black homebuyers toward one neighborhood and white buyers toward another
Bias in the homebuying process can start at the very beginning, with real estate agents consciously or unconsciously guiding buyers toward a certain neighborhood based on their race.
A 2019 Newsday investigation of the Long Island real estate industry found that some agents refused to provide listings or tours to minority buyers unless they met more stringent financial requirements than their white counterparts, and some agents directed white and minority buyers to different communities based on race or ethnicity.
Professor Elizabeth Korver-Glenn, who researches racial inequality in the housing industry, has found that the behavior of real estate agents negatively impacts minority homebuyers by excluding them from certain for-sale homes and providing them with lesser customer service. For example, agents often offer access to listings that haven’t officially hit the market to who they perceive as the wealthiest buyers, who are often white. That means certain desirable properties are shown and sold to a white buyer, while minority buyers never even know it’s for sale.
Bias from real estate agents can perpetuate segregation and prevent Black homebuyers from owning homes with the most potential for gaining value.
Appraisers sometimes value homes owned by Black families lower than those owned by white families
After a home seller and buyer enter into a sales contract, the buyer’s lender orders an appraisal, which directly assigns a value based on a home inspection and comparisons to recent sales in the neighborhood. The process is meant to ensure the mortgage company isn’t lending more than the home is worth.
Appraisals can be problematic because they can perpetuate the cycle of racism by assigning lower values to homes in Black neighborhoods than white neighborhoods. One major reason for that is the fact that individual appraisers are working within a system that’s steeped with bias. In a perfect world, values for similar homes in Black and white neighborhoods would be the same and racial factors wouldn’t play a part in a home’s worth. But in reality, appraisers assign market value based legitimately on what a home is worth, i.e. what consumers are willing to pay for it. This analysis uses that approach, showing that homes in Black neighborhoods tend to be worth less than similar homes in white neighborhoods even if the homes have comparable observable attributes.
Another issue is that appraisals are in part based on a person’s subjective opinion, and there are stories of Black homeowners facing discrimination during the process.
“Most people—including appraisers—view majority Black and majority white neighborhoods differently, even if they don’t necessarily notice their internal biases,” said Brady, the Redfin Mortgage advisor. “Recently, there have been reports surfacing more often of Black & interracial families who have had to challenge for two appraisals because the first one comes in way lower than they expected, but not due to comparable sales in the area. In some instances they have taken action to hide their race by replacing photos of themselves with photos of their all-white friends, resulting in the second appraisal coming in much higher. It’s the exact same home in the same neighborhood with the same furniture, so how do you explain the difference? Could it be tied to implicit bias?”
Institutional biases in mortgage lending contribute to lower home values for Black Americans
Nationwide, 16% of Black Americans who apply for mortgages are rejected, compared with just 7% of white Americans. If Black Americans are denied home loans, they’re less likely to own homes with the potential to build significant value.
Mortgage lenders often cite debt and low credit scores when denying Black applicants’ loan requests. Twenty-five percent of Black loan seekers whose applications are rejected are turned away due to their credit histories, versus 18.5% of white applicants. Although the algorithms used in credit scoring are meant to be unbiased, research shows they may systematically deny credit access to certain groups.
“Home loans are dependent on institutional policies, and some of those policies tend to have a disparate impact on certain groups of people,” Brady said. “For instance, some lending institutions have a higher minimum credit score than the minimum set by the governing body. Traditionally, that has a negative impact on people who tend to have lower-than-average credit scores and higher debt, which are partly the result of the fact that our educational system doesn’t focus on building that skill set of managing finances and building generational wealth from a young age.”
The legacy of redlining: Black families have less home equity than white families
Redlining, a discriminatory housing policy originally introduced in the 1930s, effectively blocked Black families from obtaining mortgage loans in valuable areas. Although the 1968 Fair Housing Act rendered redlining illegal, its legacy continues.
The typical homeowner in a neighborhood that was redlined for mortgage lending—meaning the federal government assigned a “hazardous” ranking to the area, with primarily Black areas most likely to receive that designation—has gained $212,000 less in personal wealth generated by property increases than someone who owns a home in a greenlined, or “desirable,” neighborhood.
Today, Black homeowners are nearly five times more likely to own in a formerly redlined neighborhood than in a formerly greenlined neighborhood, making the policy a major contributor to undervaluation and the racial wealth gap.
Segregation also stopped Black families from building wealth through homeownership
Racial covenants were another way developers and real estate professionals kept Black families from owning homes in desirable areas, contributing to the undervaluation of homes in Black neighborhoods. If not for the segregation enforced by this type of policy, Black and white homeowners would have been more likely to own homes in the same neighborhood—and if more neighborhoods were more integrated, the home-value gap between one area and another would likely be lower.
In the early twentieth century, real estate professionals in many cities throughout the county enforced racially restrictive covenants, with language such as this: “Said premises shall not be rented, leased, or conveyed to, or occupied by, any person other than that of the white or Caucasian race.”
Although that kind of language is no longer enforceable, the covenants kept many Black families from owning homes in desirable neighborhoods and prevented them from building wealth the way many white families were able to. The impact of the policy is still felt to this day. For example, homes built in parts of Minneapolis with racial covenants are worth an average of 20% more than homes in other parts of the city.
Homeowners themselves can perpetuate the cycle of undervaluation
Another factor exacerbating the undervaluation of homes in Black neighborhoods is the sociological phenomenon in which Black Americans prefer to live in neighborhoods that are diverse or all-Black, while white Americans typically prefer to live in primarily white neighborhoods.
“The gap in home values for Black and white Americans isn’t limited to past historical discrimination or institutional biases. There’s also the simple fact that people tend to want to live near people who are similar to them,” Edwards said. “That becomes a fundamental problem when homes in minority neighborhoods are worth less than homes in white neighborhoods, yet Black Americans continue to buy in minority neighborhoods because they value who their neighbors are. That can come at the expense of their financial well-being.”
“That’s part of the reason why undervaluation is such a difficult problem to solve,” Edwards continued. “Not only do appraisers and lenders perpetuate the cycle, but so do homebuyers themselves.”
A start on solutions: Government focus on equality and anti-discrimination efforts from real estate professionals
Working toward closing the racial home-value gap between Black and white neighborhoods will take substantial time and effort from both the public and private sectors, as well as changes in the attitudes and priorities of leaders, professionals, and ordinary homebuyers.
At the federal level, the Biden administration has said housing equality is a priority. President Biden’s housing plan pledges to work toward ending systemic housing discrimination by investing $640 billion over the next 10 years by outlawing unfair housing market practices, providing down-payment assistance to those in need, increasing the supply and lowering the cost of homes and eliminating exclusionary zoning that perpetuates discrimination.
HUD Secretary Marcia Fudge advocates for the government directly giving down-payment assistance to people who live in previously redlined neighborhoods.
Some local governments have already started implementing reparations. In March, Chicago suburb Evanston, IL become the first U.S. city to make reparations available for Black residents for past discrimination. Eligible Black residents—those who are a direct descendant of a Black person who lived in Evanston between 1919 and 1969 and suffered housing discrimination due to city policies—will receive $25,000 for home repairs or down payments. Asheville, NC is also in the process of approving reparations, and places such as the state of California and Providence, RI are considering similar measures.
The private sector also has an important role to play. Some real estate professionals, including agents, appraisers and mortgage lenders, are part of the problem and have a chance to be part of the solution because they play a direct part in educating potential homebuyers, granting access to homeownership and placing values on homes.
Real estate brokerages should train agents on unconscious bias and work with them to treat every potential homebuyer the same, regardless of race or any other characteristic. Buyers with the same search criteria should be shown the same listings in the same neighborhoods, and agents should communicate the same financial requirements to all buyers.
For Redfin’s part, CEO Glenn Kelman said in a 2020 blog post that “we’re creating a world where no one has to know the secret handshake to get the loan, the listing or the deal.” Redfin supported the ban of “pocket listings,” in which an agent shows a home only to her network without putting it on the public marketplace, as a way to help give people of color equal access to housing. Redfin has also trained agents and lenders on racism in real estate, hosted industry events, supported taxes and zoning for inclusive housing and committed to a philanthropic effort to increase housing for low-income and underserved communities.
“While confronting racial bias and working to close the home-value gap is a difficult and ongoing process, it’s also a necessary one,” Fairweather said. “It’s important for companies in the industry to look in the mirror and think about all the ways in which they may be perpetuating racial inequality, even if it’s unintentional, and revamp any problematic attitudes or policies.”
Diversifying the industry could also help close the gap. Just 6% of real estate agents in the U.S. are Black, compared with more than 13% of the general U.S. population. Real estate brokerages and other institutions should commit to hiring people of color.
Primarily Black neighborhoods in New York are most significantly undervalued
Homes in primarily Black neighborhoods in New York are valued at an average of $263,000 less than similar homes in primarily white neighborhoods. That’s a bigger undervaluation than any other city included in this analysis, which includes the 50 most populous U.S. cities with sufficient housing market data to make comparisons between homes in primarily white and primarily Black neighborhoods. It equates to an average undervaluation of 53%.
Next comes Long Beach, CA, where a home in a primarily Black neighborhood is valued at an average of $247,000 less—or 52% less—than a comparable home in a primarily white neighborhood, followed by Plantation, FL ($72,000 difference, -78%), Pompano Beach, FL ($57.000 difference, -64%) and Chicago ($56,000 difference, -40%).
In three of the cities included in this analysis—Pittsburgh, Houston and Fort Wayne, IN—homes in primarily Black neighborhoods are overvalued compared with similar homes in primarily white neighborhoods. Homes in primarily Black parts of Pittsburgh are valued at an average of $54,000—or 40%—more than comparable homes in primarily white neighborhoods. In Houston, the overvaluation is $44,000 (82%), and in Fort Wayne it’s $21,000 (54%). In nine of the cities included in this analysis, we did not detect a statistically significant difference in home valuations between Black and white neighborhoods.
“The fact that homes in Black neighborhoods in a place like Houston aren’t undervalued after accounting for the fundamental factors in our analysis doesn’t mean they’re not worth less than homes in white neighborhoods and it doesn’t mean racial differences don’t play a part. It simply means we’re able to measure the reasons for the discrepancies,” Fairweather said. “For instance, homes in Black neighborhoods in Houston are generally smaller than homes in white neighborhoods, and they’re typically located in areas with lower-rated schools. Because there are identifiable reasons why homes in Black neighborhoods are worth less, we don’t consider it an undervaluation that’s due to unmeasurable racial bias.”
Although homes in primarily Black parts of Houston aren’t undervalued for the purposes of this analysis, homes in Black Houston neighborhoods on average sell for $60,500 less than homes in white neighborhoods. The undervaluation of homes in primarily Black neighborhoods is not equal to the difference between average sale prices for Black and white neighborhoods. Sale prices are not adjusted for differences in homes or neighborhoods and the analysis in this report measures undervaluation as the difference in sale price not attributable to those factors.
The cities included in the table below are the 50 most populous U.S. cities with sufficient housing market data for this analysis. Certain large cities, such as Seattle, Portland, OR and Boston are not included in the table because there are no primarily Black neighborhoods.
Undervaluation of homes in primarily Black neighborhoods, compared with primarily white neighborhoods, by city
Cities are ranked starting from biggest undervaluation, in dollars
Analysis includes the 50 most populous cities in the U.S. with sufficient housing market data to make comparisons between homes in primarily white and primarily Black neighborhoods
| City | Undervaluation of homes in primarily Black neighborhoods (Dollars) | Undervaluation of homes in primarily Black neighborhoods (Percentages) | Median sale price (homes in primarily Black neighborhoods) | Median sale price (homes in primarily white neighborhoods) |
|---|---|---|---|---|
| New York, NY** | $263,462 | 53% | $493,538 | $886,000 |
| Long Beach, CA | $246,739 | 52% | $475,000 | $525,000 |
| Plantation, FL | $72,225 | 78% | $93,000 | $228,000 |
| Pompano Beach, FL | $56,713 | 64% | $88,814 | $150,000 |
| Chicago, IL** | $56,357 | 40% | $139,482 | $280,000 |
| Los Angeles, CA** | $55,951 | 13% | $414,773 | $918,750 |
| Baton Rouge, LA | $53,599 | 55% | $96,648 | $190,000 |
| Baltimore, MD** | $53,503 | 45% | $118,018 | $165,000 |
| Memphis, TN | $53,463 | 72% | $74,184 | $125,000 |
| Buffalo, NY | $47,553 | 86% | $55,474 | $125,000 |
| Indianapolis, IN | $43,944 | 72% | $61,405 | $64,938 |
| Louisville, KY | $43,431 | 53% | $81,807 | $134,000 |
| Columbia, SC | $43,279 | 31% | $139,433 | $168,000 |
| Rochester, NY | $40,201 | 67% | $60,350 | $119,000 |
| Milwaukee, WI | $40,156 | 50% | $79,903 | $133,200 |
| Jacksonville, FL | $39,617 | 46% | $86,415 | $127,000 |
| Omaha, NE | $36,619 | 65% | $55,917 | $145,000 |
| Atlanta, GA** | $36,342 | 33% | $110,316 | $300,000 |
| Tampa, FL | $35,320 | 46% | $77,136 | $135,000 |
| Washington, D.C. | $34,434 | 11% | $326,656 | $613,100 |
| St. Louis, MO | $29,605 | 50% | $59,379 | $133,000 |
| Detroit, MI | $28,721 | 47% | $61,300 | $39,000 |
| Richmond, VA | $27,961 | 23% | $119,633 | $209,000 |
| Birmingham, AL | $27,549 | 36% | $75,594 | $226,220 |
| Philadelphia, PA** | $25,623 | 27% | $96,607 | $162,600 |
| Orlando, FL | $23,963 | 28% | $84,547 | $150,000 |
| Toledo, OH | $23,890 | 35% | $68,275 | $96,900 |
| Charlotte, NC | $23,265 | 18% | $126,927 | $263,000 |
| New Orleans, LA | $21,861 | 16% | $133,980 | $257,000 |
| Cleveland, OH | $21,546 | 32% | $67,445 | $82,000 |
| Knoxville, TN | $21,051 | 13% | $167,120 | $149,500 |
| Fort Lauderdale, FL | $20,521 | 18% | $116,182 | $295,000 |
| Greensboro, SC | $18,977 | 16% | $115,634 | $179,000 |
| Dayton, OH | $18,747 | 29% | $64,129 | $97,000 |
| Miami, FL | $18,721 | 14% | $129,400 | $250,000 |
| Cincinnati, OH | $17,827 | 17% | $103,141 | $120,000 |
| St. Petersburg, FL | $15,472 | 15% | $103,156 | $130,000 |
| Raleigh, NC | $12,449 | 8% | $163,500 | $265,000 |
| Hollywood, FL* | $8,693 | 7% | $127,439 | $200,000 |
| Tulsa, OK* | $8,417 | 12% | $67,623 | $116,000 |
| West Palm Beach, FL* | $7,364 | 6% | $113,340 | $103,650 |
| Columbus, OH* | $6,543 | 9% | $69,685 | $144,500 |
| Nashville, TN* | $2,213 | 1% | $153,025 | $213,000 |
| Oklahoma City, OK* | $976 | 1% | $85,641 | $126,000 |
| Pembroke Pines, FL* | -$690 | 0% | $190,500 | $213,750 |
| Kansas City, MO* | -$4,935 | -11% | $45,000 | $107,500 |
| Minneapolis, MN* | -$6,314 | -5% | $125,000 | $212,000 |
| Fort Wayne, IN | -$21,496 | -54% | $39,450 | $79,900 |
| Houston, TX | -$44,101 | -82% | $53,750 | $114,500 |
| Pittsburgh, PA | -$54,431 | -40% | $135,000 | $125,000 |
Methodology
The dollar figure in the analysis represents the difference in home value between primarily Black and primarily white neighborhoods in the top 10% of U.S. cities by population from 2013 through February 2021 after accounting for characteristics of the home and local amenities. The analysis uses value estimates for 7,322,568 homes (single-family homes, townhouses and condos) that were listed and sold during that time period. If two homes have the same characteristics and are located in neighborhoods with identical amenities but one is primarily Black and the other is primarily white, the house in the Black neighborhood would sell for an average of $46,000 less.
A neighborhood is defined as “primarily Black” if 50% or more of its residents are Black. A neighborhood is defined as “primarily white” if 50% or more of its residents are white. We use zip codes as a proxy for neighborhoods in this analysis.
This analysis uses the fundamental factors that matter most for determining the sale price of a home, referred to as “characteristics of the home” and “local amenities” above. The list of fundamental factors is as follows: Income, approximate square footage of home, state, population density of neighborhood, square footage of lot, housing density of neighborhood, land area, Walk Score, number of bathrooms, median age of males in the neighborhood (a commonly used proxy for crime rates), most recent year the home was renovated, median age of residents in the neighborhood, number of bedrooms, average size of schools in terms of number of students, population of neighborhood, school ratings and number of stories of home. Crime rates are incorporated when available.
United States
Canada