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Black, Hispanic homeowners suffered the most from foreclosures, housing collapse

A larger percentage of blacks and Hispanics had their homes foreclosed on during the housing meltdown, and the discrepancy could have a long-lasting effect on their personal wealth.

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Minority homeowners will have tougher economic recovery after foreclosure

Foreclosures affected many homeowners in California, as the housing market collapsed and values plummeted between 2007 and 2015.

About 1.1 million homeowners were foreclosure victims in the state, according to CoreLogic.

But communities of color — those with a majority of African-American and/or Hispanic homeowners — were the hardest hit, and will have the longest and most challenging recovery, according to a Zillow report.

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Blacks, Hispanics depend more on their homes for building personal wealth

Foreclosures often occurred more in communities of color than those in largely white neighborhoods. And those communities depend more on their homes to build personal wealth.

For the average American homeowner, a house accounts for 42.1% of their personal wealth, but the figure is much larger for African-Americans and Hispanics at 55.6% and 64.7%, respectively. For white homeowners, a home accounts for only 38.1% of their personal wealth.

And that home-dependent wealth greatly increased in 2007, considered the peak of the housing market in California. A house was 61.8% of African-American family’s wealth and 73.1% for Hispanics, much larger than 46.5% for the average white homeowner.

Stockton, one of the epicenters of the foreclosure crisis, has a large black and Hispanic population.

So, in communities of color — think neighborhoods in Fresno, Los Angeles, Oakland, Sacramento and Stockton — more African-Americans and Hispanics lost their homes to foreclosure on a percentage basis.

Meanwhile, in mostly white communities, a smaller percentage of homeowners experienced foreclosures and many have enjoyed nifty returns from the recent run-up in real estate prices. In fact, five of the seven cities in the nation with the largest price gains during the past two decades were in California, with Oakland topping the list, according to PropertyClub.

Foreclosures happened three times more in communities of color in SF

If you look at San Francisco and Los Angeles, foreclosures in communities of color were much more likely, according to the report. In San Francisco, foreclosures happened 3.3 times more in communities of color compared to largely white neighborhoods. Primarily white neighborhoods are 62.3% of homes in San Francisco, but comprised only 43.5% of foreclosures.

Minority homeowners in San Francisco were 3.3 times more likely to lose their homes to foreclosure than whites.

Los Angeles was better, but foreclosures were still twice as likely to hit African-American and Hispanic neighborhoods than mostly white areas. White neighborhoods account for 49% of homes in the city, but only had 31% of foreclosures.

Photo of foreclosure home by Andy Dean/Flickr

[/et_pb_text][et_pb_team_member admin_label=”Author” name=”About the author” image_url=”https://www.calhomenews.com/wp-content/uploads/2019/01/Trujillo-Tahoe.jpg” twitter_url=”https://twitter.com/rontrujillo” linkedin_url=”https://www.linkedin.com/in/rontrujillo/” _builder_version=”3.19.9″ header_level=”h5″ header_font=”Libre Franklin|700|||||||” body_font=”Libre Baskerville||||||||” background_color=”#ffffff” border_radii=”|0px|0px|0px|0px” border_radii_image=”|0px|0px|0px|0px” border_color_all_image=”#000000″ link_option_url_new_window=”on” saved_tabs=”all”]

Ron Trujillo, an award-winning business journalist-turned-public relations executive, is the editor-owner of CalHomeNews and can be reached at ron@cahomenews.com.

[/et_pb_team_member][/et_pb_column][et_pb_column type=”1_3″][et_pb_blurb title=”2 of 5 CA homeowners with a mortgage are equity rich” image=”https://www.calhomenews.com/wp-content/uploads/2018/12/San-Jose-Red-Rowhouses-PBK-PG-SS.jpg” image_max_width=”none” _builder_version=”3.22.7″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” max_width_tablet=”50px” z_index_tablet=”500″ use_border_color=”off”]

More than two of every five homeowners with a mortgage in California are equity rich, defined as owners with at least 50% equity.

Fast-rising home prices and families remaining in their homes longer have greatly helped increase the equity rich rate in the Golden State during the past several years, according to ATTOM Data Solutions.

The state’s 43% equity rich rate during the first quarter is slightly lower than the 43.6% rate in fourth-quarter 2018.

California had the largest percentage of equity rich homeowners in the nation, followed by Hawaii and New York at 38.1% and 34.2%, respectively.

The state also boasts the five cities with the largest percentage of equity rich homeowners in the nation, led by San Jose at 68.3%. San Francisco (58.4%), Los Angeles (48.1%), Santa Rosa (47.6%) and San Diego (39.3%) round out the top five.

While equity rich homeowners is rather common in California, it’s far from prevalent in the U.S., where only 25% of owners owe less than half their mortgage.

Photo of row of red rowhouses in San Jose by PBK-PG/Shutterstock

[/et_pb_blurb][et_pb_blurb title=”Top 10 cities with largest predicted price gains in 2019 are in CA” image=”https://www.calhomenews.com/wp-content/uploads/2019/05/Chico-House-by-Bidwell-Park-James-Wilkerson-Flickr.png” _builder_version=”3.22.7″ z_index_tablet=”500″]

California dominated the top 10 cities list for estimated home price gains in 2019, with Chico leading the way.

Chico, best-known for its state university and beer-maker Sierra Nevada Brewing Co., has been one of the hottest housing markets in the nation since the Camp Fire destroyed the city of Paradise and displaced thousands of one-time homeowners in fall 2018.

Salinas, Santa Maria-Santa Barbara and Modesto finished in second-through-fifth place, but all 10 cities on the list should have 10% price gains compared to a year ago, according to CoreLogic. Also on the list:

  • Ventura-Oxnard-Thousand Oaks
  • Sacramento-Placer counties
  • Vallejo-Fairfield
  • San Francisco-Redwood City-South San Francisco
  • San Luis Obispo County

Nationwide, the average market will increase 4.8%.

Photo of house across from Bidwell Park in Chico by James Wilkerson/Flickr

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