Morning Briefing: Homes in black neighborhoods more likely to be underwater

by Steve Randall12 Jan 2017
Homes in black neighborhoods more likely to be underwater
Homes in predominantly black communities are more than twice as likely to be underwater than those in mostly white areas.

That’s the finding of analysis by Zillow which discovered that while the national negative equity rate in the third quarter of 2016 was 9.9 per cent in predominantly-white areas, in mostly- black neighborhoods it was 20 per cent and in mostly-Hispanic areas it was 12 per cent.

"Negative equity is not an equal opportunity offender, with certain markets still being more affected than others," said Zillow Chief Economist Dr. Svenja Gudell. "Our previous research has shown that negative equity is more concentrated among less expensive homes, and now we know that it is also more prevalent in minority neighborhoods than in white communities, which are also trailing in the overall housing recovery. These gaps can and will have long lasting implications for growth and equality."

The differential is sharper in some metros. In Detroit, for example, 12.2 per cent of all homeowners were underwater with 9.5 per cent in mostly-white areas compared to 35.1 per cent in mostly-black communities.
 
AMC acquires Stewart Lender Services
American Mortgage Consultants has acquired Stewart Lender Services, boosting its due diligence and quality control operations for residential mortgages.

“The acquisition will expand our service offerings in the agency quality control and servicing quality control areas and allow AMC to offer a broader set of services to existing and new clients including software-as-a-service offerings,” said AMC CEO Michael Franco. “This acquisition is part of a broader expansion plan for AMC during 2017 to offer additional services, technology solutions, and market-leading capacity to our clients.”

Stewart’s employees will be transitioned to AMC and will continue to work from existing Denver and Farmington Hills offices. AMC’s corporate headquarters will remain in New York City, and the main production facility will remain in Tampa, Fla.
 
Record sales in Houston region last year
The economic pressures of lower oil prices did not stop the housing market in Houston from achieving new heights.

The steady pace of most of 2016 was boosted by an uptick in sales in the final few months of the year and set a new record of 76,449 homes sold, the Houston Association of Realtors says. That’s up 3 per cent from 2015 and 1.3 per cent above the previous record set in 2014.

"We could not be happier with the Houston housing market’s 2016 performance,” said HAR Chair Cindy Hamann with Heritage Texas Properties. “The year began on a cautionary note because of energy-related layoffs that did affect our higher-priced housing. But what we saw by the end of 2016 is the reflection of a truly diversified Houston economy that continues to benefit from hiring in other industries and a steady influx of consumers from markets across the country and around the world."

December sales were up more than 5 per cent while the average price was up by 4.3 per cent to $294,512.
 

COMMENTS

  • by EWH | 1/12/2017 8:04:08 AM

    There are several reasons for this fact. There is a much lower commercial base in Black and Hispanic neighborhoods making taxes much higher. I have done some research here in Cook County where property taxes are 5% or more of value while in White neighborhoods property taxes are less than 3% of value. Insurance is also higher in minority neighborhoods. The predatory lending was also much higher in minority neighborhoods between 2001 and 2008.

  • by Compliance Guy | 1/12/2017 12:33:42 PM

    You had me until I saw "analysis by Zillow". Moving on to next article.

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