Race and real estate: Past, present, and future

Home ownership has been part of the American Dream since the founding of our republic. It confers economic benefits, a sense of safety and security, and can be a source of pride.  Sadly, for as long as this part of the American Dream has existed, it has not been equally available to everyone.  As you will see, as much progress as has been made in 200+ years, our work is far from done to ensure that the dream — and reality — of owning a home is truly and equally open to all Americans.

Property protection officially began in the United States with the passage of the Fifth Amendment in 1789, but virtually anyone who was not a white man did not receive this right. After the Civil War, the 14th Amendment declared all people born in the U.S. were citizens and the Civil Rights Act of 1866 stated that all citizens had the same rights to real property as white men. This should have been the end of the story, but a series of court decisions, immigration laws and racially discriminatory zoning laws ensured that property rights continued to be denied to minorities and women.

Woefully and to its shame, in the late 1800s and into the 1900s, the National Association of Real Estate Boards (the precursor to the National Association of Realtors) encouraged racial discrimination and segregation. In fact, its Code of Ethics even mandated that its members work to racially segregate communities.

In 1917, the Supreme Court declared racial zoning ordinances to be unconstitutional, so private restrictive covenants were then used to prohibit the sale of homes to minorities. The Federal Housing Administration, created in 1934, used “redlining” in this period to identify African American areas as high risk by shading them in red and steering whites away from such areas, and real estate agents used discriminatory practices like steering and blockbusting (see the resource links below for more information).

In 1948, the Supreme Court struck down racially restrictive private covenants, though they lingered in practice, even if unenforceable. In a small bright spot, Colorado was the first state in the nation to pass a fair housing law in 1959, helping pave the way for nationwide fair housing legislation.

As many know, the Civil Rights Act was passed in 1964, but less well known is that legislators could not agree on fair housing legislation and NAR actively opposed passage of the Fair Housing Act.  It was not until 1968, in the wake of the Kerner Commission Report (studying the causes of race riots) and the assassination of Martin Luther King Jr., that the Fair Housing Act was passed to prohibit discrimination based on race, color, religion or national origin.

By 1975, NAR had finally turned the corner, adopting an agreement with the Department of Housing and Urban Development to promote fair housing, educate its members about their obligations under the Fair Housing Act, and recommend fair housing procedures for its members to follow.

Today, the Realtor Code of Ethics requires Realtors to provide equal services regardless of race, color, religion, sex, handicap, familial status and national origin in accordance with the Fair Housing Act, as amended. The code even goes beyond the act by covering sexual orientation and gender identity.

Despite the progress that has been slowly and painfully won, much work remains to be done to ensure truly equal opportunity in home ownership and property rights. In terms of numbers, the homeownership rate for white households in 2017 was 72.3%, but only 46.2% for Hispanic households and 41.6% for African American households (this is about the same rate of home ownership for African Americans as when the Fair Housing Act was passed in 1968).

The truth is, there are many things that need to change to realize this dream. Locally, it is time to revisit zoning and occupancy laws (see, e.g., www.bedroomsareforpeople.com), and more broadly, groups like the Fair Housing Alliance have put together concrete steps toward a solution (https://nationalfairhousing.org/wp-content/uploads/2019/12/Fair-Housing-Solutions-Overcoming-Real-Estate-Sales-Discrimination-2.pdf).

It is incumbent on all of us — especially elected officials, real estate professionals and the mortgage industry — to continue to do better to make fair housing not just the law of the land, but also the reality. 

Originally posted by Jay Kalinski is the 2020 chair of the Boulder Area Realtor Association and owner of Re/Max of Boulder and Re/Max Elevate.

Posted on July 1, 2020 at 6:00 pm
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Real estate in the time of COVID-19

At the start of the year, I read an article about the 10 biggest threats to the global economy in 2020, written by a prestigious international organization.  “Global pandemic” did not make the list, which goes to show how generally lousy we humans are at accurately predicting the future.  As such, any predictions that I (or anyone else) could give you about how this pandemic will unfold, in terms of its impact on the local real estate market, would likely fare no better than random chance.  Similarly, with the situation evolving so rapidly, any advice or best practices I could offer today may become obsolete in short order.

So, rather than peddle advice and predictions, let’s pause and take stock.

Nationally:

Back in 2008, the financial crisis was sparked in the real estate sector and led to a crisis that nearly collapsed the banking system.  We see from history that recessions that begin in the housing sector tend to be worse and last longer than recessions ignited by other factors.  Today, the recession we are likely heading into has a very different background — our economy and housing market were far stronger and more resilient, thanks in part to the measures put in place after that recession (tighter lending restrictions, more stringent liquidity requirements for banks, etc.).  In fact, we were enjoying the longest economic expansion since WWII.

According to National Association of Realtors chief economist Dr. Lawrence Yun, “Conditions today are very different than the last boom/bust cycle.  In 2004, we had a huge oversupply of new homes.  In 2019, we still had a huge undersupply of new homes.  In fact, we haven’t been building enough new homes to keep up with demand in over a decade.  During the last downturn, there was the subprime factor and the variable interest rate.  Now there are fewer variable rate mortgages and virtually no sub-prime mortgages.”

Colorado and Boulder County outperform the nation:

Colorado is well-positioned as a top economy nationally.  Real GDP growth in Colorado ranked seventh in the nation year-over-year, and the state’s five-year average ranks fifth, according to economist Rich Wobbekind with CU-Boulder’s Leeds School of Business.  Wobbekind says that Boulder County’s economy has been outgrowing the state economy, and is uniquely able to weather a recession.  Boulder County’s economic vitality is fueled by a highly educated workforce and diverse ecosystem of industries including government research facilities, aerospace, biotechnology, cleantech, and information technology — industries that endure in the long term.

Boulder ranks number one in the nation for home value stability and growth for the fifth consecutive year, according to SmartAsset. As discussed in our recently published real estate report, based on our extensive data and market analysis, we have had a healthy housing market through 2019.  Even through the grim days of the Great Recession, home prices in Boulder County declined only by 5 percent and recovered quickly post-recession. If you held onto your home for at least six years, there is no period when you would have lost money on your investment here.

Summing up:

While past performance is no guarantee of future results, the real estate market in our area has a history of weathering recent recessions better than other places and recovering more quickly after the storm has passed.  Given everything that is going on, I still believe that owning property in Boulder Valley is and will continue to be an excellent investment.

Be well and do what you can to flatten the curve.  Stay home.

Posted on April 1, 2020 at 3:00 pm
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Colorado 5th Most Innovative State

Colorado ranked as the No. 5 most innovative state in the U.S. and the achievement comes with perks.

For example, innovation is a principal driver of U.S. economic growth, reports WalletHub, which points toward good news for Colorado’s economic outlook.

“In 2019, the U.S. will spend an estimated $581 billion on research and development — more than any other country in the world and about 25 percent of the world’s total — helping the nation rank No. 6 on the Global Innovation Index,” writes WalletHub in its recently released study of Least & Most Innovative States.

The study compared 50 states and the District of Columbia across 24 indicators of innovation-friendliness, ranging from share of STEM professionals to tech-company density.

The top five states and their corresponding scores out of 100 are:

 

No. 1     Massachusetts, 72.31

No. 2     Washington, 68.03

No. 3     District of Columbia, 67.47

No. 4     Maryland, 64.06

No. 5     Colorado, 63.35

“Certain states deserve more credit than others for America’s dominance in the tech era. These states continue to grow innovation through investments in education, research and business creation, especially in highly specialized industries,” notes WalletHub.

Colorado also ranked in the top 10 for six metrics, including tied for No. 1 in eighth-grade math and science performance, No. 5 for share of STEM professionals and share of technology companies, No. 6 for projected STEM-job demand, and No. 7 for venture capital funding per capita.

What makes Colorado so innovative?

WalletHub compared two dimensions across 24 metrics, “Human Capital” and “Innovation Environment.”

Human Capital includes:

  • Share of STEM Professionals
  • Share of Science & Engineering Graduates
  • Projected STEM-Job Demand by 2020
  • Scientific-Knowledge Output
  • Eighth-Grade Math & Science Performance
  • AP Exam Participation

Innovation Environment includes:

  • Share of Technology Companies
  • R&D Spending per Capita
  • R&D Intensity
  • Invention Patents per Capita
  • IP Services Exports as a Share of All Services Exports
  • Business Churn
  • Jobs in New Companies
  • Net Migration
  • Entrepreneurial Activity
  • Number of Startups “Accelerated” per Total Number of Start-ups
  • Tax-Friendliness
  • Venture-Capital Funding per Capita
  • Average Annual Federal Small-Business Funding per GDP
  • Industry-Cluster Strength
  • Open Roads & Skies Friendly Laws
  • Average Internet Speed
  • Share of Households with Internet Access
  • Adoption of K–12 Computer Science Standards, Note that this metric was chosen because WalletHub considers most future innovation will be tech enabled.

For more information visit https://wallethub.com/edu/most-innovative-states/31890

Originally Posted by Tom Kalinski Founder RE/MAX of Boulder on Tuesday, April 16th, 2019

Posted on April 16, 2019 at 6:00 pm
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Colorado Residents Among Happiest, Healthiest in U.S.

Most of us in Colorado feel happy about our life.  Our degree of happiness and healthiness is measured annually when Gallup conducts its wellbeing survey. In the recently released 2018 results, Colorado ranked No. 6 on the Gallup National Health and Well-Being Index, marking the 11th year in a row in the top 10 across the U.S.

Colorado and Hawaii are the only two states with an eleven year record in the top 10. Hawaii ranked No. 1 and Wyoming, Alaska, Montana and Utah followed as the top five.

Colorado’s long held position as top state for physical wellbeing was nudged out in 2018 by Alaska and Wyoming. Hawaii topped all states in three elements in 2018, leading the U.S. in career, social, and financial wellbeing. Alaska and North Dakota were top states for financial wellbeing, following Hawaii.

Gallup reports that its ranking is based on more than 115,000 surveys of adults across the U.S. that measures five essential elements of wellbeing:

Career: liking what you do and feeling motivated to achieve goals

Social: having supportive relationships and love in your life

Financial: managing your economic life to reduce stress and increase security

Community: liking where you live, feeling safe, and having pride in your community

Physical: having good health and enough energy to get things done daily

High levels of wellbeing improve workplace performance and employee engagement that can benefit local employers, writes Gallup.

Here are the top 10 happiest and healthiest states and their scores out of 100 on Gallup’s National Health and Well-Being Index.

1. Hawaii                           64.6

2. Wyoming                      64.2

3. Alaska                          63.9

4. Montana                       63.5

5. Utah                              63.4

6. Colorado                      63.4

7. Vermont                        63.3

8. Delaware                      62.9

9. South Dakota               62.7

10. North Dakota             62.7

Across the nation overall wellbeing declined in 2018, with the national Well-Being Index score dropping to 61.2 from 61.5 in 2017. The Index also declined in 2017, bringing the two-year decrease to 0.9 points. Social and career wellbeing slid, while physical wellbeing improved and financial and community wellbeing held steady.

For the full Gallup Wellbeing Index, visit https://news.gallup.com/poll/247034/hawaii-tops-wellbeing-record-7th-time.aspx

 

Originally posted by Tom Kalinski Founder RE/MAX of Boulder on Wednesday, March 27th, 2019.

Posted on March 20, 2019 at 3:00 pm
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Colorado’s Top Cities for First-Time Home Buyers

Nine Colorado cities rank in the top 50 best cities for first-time home buyers, according to recent analysis by WalletHub, a personal finance website. Four of those made the top 20 – Centennial, Thornton, Arvada and Greeley, coming in at Nos. 3, 6, 17, and 20, respectively.

With home prices rising in Colorado and across the nation, buying a first home is challenging. Potential buyers need to develop a realistic perspective on market prices, their financing options, and neighborhoods that have a good reputation and appeal to their lifestyle.

To help potential buyers target possible locations, WalletHub compared 300 cities of varying sizes across 27 key indicators of market attractiveness, affordability, and quality of life. Data includes important factors like cost of living, real-estate taxes, and property-crime rate.

Here are the rankings of the Colorado cities reported:

3. Centennial

6. Thornton

17. Arvada

20. Greeley

23. Longmont

25. Fort Collins

27. Colorado Springs

28. Westminster

39. Pueblo

51. Denver

67. Aurora

137. Boulder

 

Among those cities, Colorado Springs has the fourth-lowest real estate tax rate in the nation.

First-time home buyers are often in the millennial generation. As it turns out, Colorado is the ninth-best state for millennials, according to a separate WalletHub report.

Millennials – those born between 1981 and 1997 – make up over 35% of the workforce. While often thought of as “kids,” the oldest are 37 years old.

In addition to a total score of 9, Colorado ranks high for quality of life (7), economic health (3) and civic engagement (10).  No. 1 ranked District of Columbia also ranked first in the nation for quality of life and civic engagement.

Colorado was evaluated along with all 50 states and the District of Columbia across 30 key metrics, ranging from share of millennials to millennial unemployment rate to millennial voter-turnout rate.

Here’s a look at the top 10 states for millennials:

For more information, see the full reports at https://wallethub.com/edu/best-and-worst-cities-for-first-time-home-buyers/5564/#methodology and https://wallethub.com/edu/best-states-for-millennials/33371/ .

 

 

Posted by Tom Kalinski Founder RE/MAX of Boulder on Friday, August 24th, 2018 at 10:36am.

Posted on August 25, 2018 at 7:19 am
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