For Black families, is selling Grandma's house the right choice? Fast-rising home prices are creating opportunities for some longtime Black homeowners. Those high valuations can also raise big questions about the best way to tap into that wealth.

Home prices are up. For Black families, is selling Grandma's house the right choice?

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This story touches on a glaring inequality in American life. In recent decades, the incomes of Black and white families have drawn closer, but the accumulated wealth of those families has not. There is a wealth gap. Some families now ask what to do with an asset they do have, an old family home in a rising market. NPR's Laurel Wamsley reports.

LAUREL WAMSLEY, BYLINE: Fred Brown is 26 and grew up in the Columbia Heights neighborhood of Washington, D.C.

FRED BROWN: My grandmother owned a house. And me and my brothers and sisters, my mother and father lived in the house.

WAMSLEY: His grandmother had owned the seven-bedroom home since 1960, when she bought it for less than $7,000 when she died a few years ago, Brown says his father wanted his aunts to help pay the taxes on it.

BROWN: I guess they didn't want to pay it. So they had a big dispute. And, you know, they wound up selling it.

WAMSLEY: His parents are now renters. And Brown stays at a friend's home while he applies for jobs. He sees the sale of his grandmother's house as a big mistake.

BROWN: The values of houses is going up. They could've just invested in the future instead of just worrying about the present.

WAMSLEY: It's a situation that confronts many Black families - what to do with grandma's house? For most American families, home equity is their single largest asset. As prices in some areas reach eye-popping levels, the decision about whether to hold on to or sell a family home can have long-lasting consequences for generational wealth. And what happens with these homes is crucial to closing the racial wealth gap. In 2019, the typical white family had $184,000 in assets, while the typical Black family had just 23,000.

REGAN ADAMS: I think everybody should own and keep at least one home in their family and try to buy as much property or land as they can and sit on it.

WAMSLEY: That's Regan Adams. For the 42-year-old city worker, the two properties her father left behind in Knoxville, Tenn., have provided a roof over her head and a way to pay off debts. She and her husband divorced when he was released from prison. And then he soon died, leaving her with funeral bills and little in Social Security to support their daughter. Adams fixed up one of the properties and rented it out for several years before selling it. She now lives in her father's former home in northeast Knoxville, an area she hadn't been keen to return to. That's changing fast.

ADAMS: Maybe about four years ago, I started hearing a lot of buzz about people wanting to move on this street. And I'm thinking, why? Like, this just doesn't make any sense.

WAMSLEY: Into the lower-income neighborhood came a lot of new people buying houses and fixing them up.

ADAMS: Now it's very quiet. People are walking the neighborhoods like there's no crime. Like, it's totally different from when I was here before.

WAMSLEY: She says her street used to be about half Black and half white.

ADAMS: Has it gotten whiter? Absolutely. My whole neighborhood is white. I probably am the only Black person on the street.

WAMSLEY: There's a racial gap in homeowning, too. In 2019, the rate of white homeownership was nearly 74%, while the Black homeownership rate was 30 points lower. Experts say there are a few strategies to ensure the value of a family home doesn't disappear. Number one is not selling it to an investor who comes calling unsolicited, offering cash. Realtors say properties typically sell for more when they're sold on the open market. And for homeowners who want to ensure that there's a plan for the property, a will is crucial, and a trust is even better. Danaya Wright, a law professor at the University of Florida, studied what happened to properties when the owners did or did not have wills.

DANAYA WRIGHT: What I found was just pretty stunning difference. The people who died without wills - those homes sold for significantly below fair market value. They were much more likely to be lost at foreclosure and tax sale, four times more likely, for instance.

WAMSLEY: Wills and trusts help to avoid the heirs' property problem, where a property becomes fractionated between several heirs, and any one of them can force a sale. The issue has caused many Black families to lose their land. But in the Petworth neighborhood of D.C., 68-year-old Cynthia Harris is one of those reaping the rewards of inheriting a family property. She lives in the home her parents bought more than 50 years ago.

CYNTHIA HARRIS: I think my parents paid $26,000 for this property in 1970.

WAMSLEY: About 15 years ago, she reached out to a realtor about selling the house.

HARRIS: And the realtor told me that he wouldn't sell the house. It was a corner house, a lot of property. The area would be improving. And I should keep it. But at that time, the house was only worth about $220,000, $240,000.

WAMSLEY: And do you know how much the house is probably worth now?

HARRIS: 1.2 million.

WAMSLEY: Oh, my goodness. How do you feel about that?

HARRIS: Feel real good about it (laughter). And actually, I ended up marrying the realtor.

WAMSLEY: And they now live in the house together. Harris says the idea of building wealth in a particular place has always been in her mind.

HARRIS: We're city people. And we didn't get 40 acres and a mule. We had no place to call home except this corner. And I always wanted my family to have someplace where they can say, yeah, that's where I'm from. That's my home. And that's why I held on to it.

WAMSLEY: Still, she's preparing for change.

HARRIS: In all likelihood, we will offer it to family first at market value.

WAMSLEY: But her husband's daughters likely can't afford to buy it, and her husband has property of his own. So Harris will probably sell the house and use a chunk of the proceeds to downsize to a condo. Back in Knoxville, real estate agent Kanika White says Black homeowners selling their house know that in many cases, it's going to be a white person buying it.

KANIKA WHITE: That's one of their concerns. You know, they grew up here. Their children grew up here. Their grandchildren are here. And they are now seeing the demographics change.

WAMSLEY: White grew up in New Orleans and Atlanta. And she says city leaders and others are often quick to trumpet neighborhood development without actually improving people's lives.

WHITE: The people who you no longer see in this area are still poor. You've really just moved poverty from one zip code to another.

WAMSLEY: With such rapid change in Knoxville, she sees it as her mission to help homeowners harness wealth, whether they keep a property or fix it up and sell it. And she wants to help residents stay in the community if they want to.

WHITE: Or find a way to - if they do leave the community, they have not left still poor. They can leave with some wealth in their pockets. They have that money to go start a business or to send their kid to college or go back to college themselves.

WAMSLEY: She hopes that Black people with the means to will not move to more upscale parts of the city but instead buy in the now-gentrifying neighborhoods they grew up in.

WHITE: But if you're going to leave, take your wealth with you. Don't leave it for other people to get. And if I can help as many people as possible achieve that, I'm happy. I'm satisfied.

WAMSLEY: Closing the wealth gap in America depends on many Black families doing just that.

Laurel Wamsley, NPR News, Washington.

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