How to Build Wealth with Home Values

There is one crucial factor many Caribbean and Blacks do not think about from generation to generation. Most of us don't know what we don't know. So I am here to share the wealth with you. Building generational wealth through homeownership depends on the rate of increase to the home value over time. Yes, many people are on the path of homeownership, but depending on the house's location, the value it adds to the generational wealth gap can be stagnant. This factor is something most Caribbean and Black households do not consider because it is typically not discussed.

It doesn't matter if you are looking to sell in x number of years or make it your forever residence. How much your home will be worth in years to come matters. When looking for a home, we tend to look for a house in a decent school district, a "nice" neighbor or two, and a place that brings us joy.

Here is my back personal story to a home that barely moved in value after ten years. My husband and I bought a house in Georgia in 2007. I lived in Brooklyn, New York, most of my life, and my husband is from Queens, NY. We started looking for a house in 2006, a year after getting married. When it came to house shopping in New York, the thought of spending a large amount of money for low square footage was not my cup of tea. My mom was also a big advocate of homeownership after we got married. We were 24 & 26 and happy to buy a home too big for us with a large backyard. At the time, buying bigger for less was the push and all over the radio. Of course, buying bigger for less can come with the builder cutting corners, but that is about three different stories for another day.

We were excited to build our home from scratch. We did little research and put the ball in our White Realtor's hands. I call out the race because later, I realized White Realtors tend to push Blacks in neighborhoods that do not go up in value and seldomly into diverse communities. That is another three stories for another day. Fast forward to 2014, around the time I started to pay closer attention to our net worth, or lack thereof. If we stayed in our first home, I told my husband we would never build any real wealth. So we started looking for homes in diverse communities with sought-after school districts. I immediately saw the exact difference. At that time, home values began to get back to where they were before the housing crash of 2008. The one thing that was in my face was that all or majority-white neighborhoods recovered, and the % of the increase was substantially above all-Black communities I researched. My all-Black community home didn't even get close to what we paid for it in 2007. We were still $50,000 off our initial purchase price while these other homes were soaring way away from their purchase price. I wanted to have wealth just like them, so we manifested a second home in a neighborhood that would undoubtedly add to our net worth.

Here is how I looked up the value for the second home. I went to Zillow and looked at the Price and Tax History. Under the Price History, you will find the date the house was sold and the sale price. I looked at the original purchased price and the number of sales afterward. The goal is to understand how much profit from the purchased price the owner made. If a house goes up in value $10,000 in ten years, it is a slow mover. The value increase in a "good market" indicates how the neighborhood is seen from a value standpoint. If you see a house goes up to $100,000 or more in five years, it is a winner. These stats are based on real housing market scenarios.

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