MEMPHIS, Tenn. — Jessie Watkins and his family of four bought their first home in Orange Mound.
“I like the benefits of being a homeowner,” Watkins said. “I like paying for my own house. I’m not paying for someone else’s house.”
He chose the historic African-American community of Orange Mound for a reason: great value. Jessie’s two-story, three-bedroom, two-and-a-half-bath home cost just under $80,000.
“Everyone knows how Midtown has been booming. I think this is prime real estate,” Watkins said.
And he was right. In three years, Jessie’s home doubled in value. Home equity is the foundation of generational wealth.
Your home equity is the difference between what your home is worth and what you owe the bank.
When property values shoot up quickly in a hot market, homeowners gain equity very quickly, building wealth.
Homes in lower-priced neighborhoods do offer opportunities, especially for first-time homebuyers.
“They can build equity in the house by buying it distressed like this and fixing it up to standards,” Patterson said.
But not all neighborhoods are treated equally.
Study after study has shown predominately Black neighborhoods, like Orange Mound, are valued lower than mostly white neighborhoods, and not just for measurable reasons like location or crime.
The Brookings Institute found that owner-occupied houses in Black neighborhoods are undervalued by $48,000 on average.
“This house right here is placed at one value and a house just within walking distance is placed at another value. Explain this,” said realtor Travis Patterson.
Patterson explained how common it is in Orange Mound.
“This house right here sitting on Boston, two bedrooms and one bath is listed at $99K. Just a half a mile across the street, I’m $465K on the value. It’s the same size as the house we have on Boston.”
But just across from Orange Mound on Southern Avenue in the 38111 zip, the median value of owner-occupied homes is twice the amount at more than $112K.
And we see that all over the city. The median home value in Orange Mound is a little over $62K. Right next door in Chickasaw, it’s more than $112K
South Memphis? $53K.
In Cooper Young the median value is set at more than $233K.
Frayser: $63K. Vollintine-Evergreen: $130K.
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