The Devaluation of Assets in Black Neighborhoods: The Case of Residential Property (2024)

FAQs

Why are black neighborhoods devalued? ›

Part of this difference is attributable to quality differences between the housing stock. Lower wealth in Black communities means that homes in majority Black neighborhoods tend to be older, smaller, and more likely to be attached than homes in neighborhoods with few or no Black people.

Property Devaluation is said to be the reduction cum decline in value of property, be it land or edifice. Many factors can shape property values, and there is no one standard cliché to determining what a property worth hence, there are few variables that tend to affect property value(s).

Asset devaluation, also known as impairment, occurs when the value of an asset declines significantly. This can happen due to various reasons, including changes in market conditions, technological advancements, legal or regulatory changes, or economic factors.

Property Values Go Down

The nonwhite middle class is usually not large enough to sustain market demand. (If whites represent 80% of the housing market, then 80% of the potential demand is absent.) As prices decline, the community's socioeconomic level changes as well.

A 2021 study by Freddie Mac found that Black and Latino homeowners are about twice as likely as whites to get low appraisals. According to the report, 12.5% of the properties in predominantly Black census tract areas receive appraisal value lower than contract price.

Devaluation is the deliberate downward adjustment of a country's currency value. The government issuing the currency can decide to devalue its currency. Devaluing a currency reduces the cost of a country's exports and can help shrink trade deficits.

Higher inflation: A weaker dollar can lead to higher inflation, which can impact the real estate market by increasing construction costs, reducing the purchasing power of homebuyers, and potentially increasing interest rates. Lower mortgage rates: In some cases, a weaker dollar can lead to lower interest rates, making.

Cons of Devaluation

Devaluation can result in an increase in the prices of products and services over time. The increase in the price of imports causes consumers to purchase their goods from domestic industries. The amount of the price increases, however, is dependent on the competition of supply and aggregate demand.

What is the rule of devaluation? ›

Meaning of devaluation

The apex monetary authority of the country sets a lower exchange rate for the national currency in relation to a foreign reference currency or currency basket in case of devaluation. Historically, devaluation has been used as a tool to control the balance of payment deficits.

Currency devaluation may lower productivity, since imports of capital equipment and machinery may become too expensive. Devaluation also significantly reduces the overseas purchasing power of a nation's citizens.

Overall, homes in majority-White, non-Hispanic neighborhoods cost significantly more than homes in majority-Hispanic or Black neighborhoods. As of 2022, homes in White neighborhoods cost $440,000 on average, while homes in Hispanic neighborhoods cost $348,000 and homes in Black neighborhoods cost $217,000.

Gentrification is the process of changing the character of a neighborhood through the influx of more affluent residents (the "gentry") and investment. There is no agreed-upon definition of gentrification. In public discourse, it has been used to describe a wide array of phenomena, usually in a pejorative connotation.

Neighborhood Factors Can Bring Down Property Values

If your neighborhood looks unkempt, if it's noisy, if there are foreclosures, or if there are things like power lines, low-income housing, and gun ranges nearby, these could drop the value of your home.

The official poverty rate of the U.S. Black population reached a historic low of 17.1% in 2022, according to U.S. Census Bureau data released today.

In addition to theft by state-sanctioned violence, intimidation, and lynching, Black farmers also lost land due to discrimination by banks and financial institutions; through the denial of access to federal farm benefits by local administrators who funneled those benefits to white farm owners; through forced partition ...

Historical discrimination through exclusionary housing policies and practices, plus a dwindling supply of housing and a variety of other factors have limited Black families from purchasing homes at the same rate as their White counterparts.

Since the 2000 census, the number and proportion of black population has decreased in several major cities, including New York, Los Angeles, Atlanta, Boston, Cleveland, San Francisco, Seattle, St. Louis and Washington, DC.