Donnell Spivey was a 32-year-old Amtrak employee when he decided to start investing in real estate, but what began as a sideline quickly became a career. He entered the business with Baltimore-based Otis Warren Real Estate Co., and later worked for Ellicott City's RE/MAX 100 Real Estate Co. for 18 years, where for many years he averaged $8.5 million in sales annually.
In 2004, Spivey founded his own company in Ellicott City, EXiT Spivey Professional Realty, which won recognition from Rep. Elijah E. Cummings as the first African-American-owned brokerage in Howard County. In August, he was installed as president of the National Association of Real Estate Brokers (NAREB), a minority trade group.
In September, NAREB published its 2013 State of Housing in Black America report, which found that African-American homeownership dropped from about 48 percent in 2007 to 43 percent today. NAREB also reported that African-Americans and Latinos were about 70 percent more likely to have experienced foreclosure, even when controlling for income.
Spivey, one of 13 children born to a North Carolina sharecropper, moved to Baltimore after he graduated from high school because he saw greater opportunities for advancement.
Today, he said, he is concerned that the recession has made many African-Americans wary of homeownership, traditionally a safe investment and a route to the middle class.
"There's been a lot of talk, 'Is homeownership right for you?' … being spread through our community," he said. "But they should still consider homeownership a sustainable investment and not let what has happened in the past be a deterrent from purchasing."
Spivey said NAREB is working to educate brokers so they can help steer clients away from the risky loans that have done so much damage.
"Honestly I think we all played a part. … I certainly didn't foresee what was happening or what happened, but what we're doing now is we're educating our real estate professionals across the country to have a keener eye in terms of looking at these loan products and making sure they fit," he said.
Why did you decide to get involved with NAREB?
When I entered the real estate profession some 27 years ago, I quickly learned three important lessons. First, that to be successful I needed to collaborate with other African-Americans in the industry. Second, if I wanted to service African-American clients, I had to understand that African-Americans made different home purchase decisions than other ethnic groups. And third, that clients of one race are far more comfortable buying or selling their homes with real estate agents of their own race. Fortunately, an African-American agent associated with the same brokerage where I was working introduced me to the local chapter of the National Association of Real Estate Brokers. I immediately joined.
Since that auspicious day, I have tried to do my best to help African-Americans and others navigate the real estate marketplace. I work to understand the special needs of minority audiences and spend time educating them about affordable and sustainable homeownership, along with the long-term financial benefits of ownership. As important, I have business relationships with real estate professionals, nationwide, willing to share their experiences that have helped to grow my business.
The recession and foreclosure crisis had a disproportionate effect on the minority community. Why? What do you think NAREB can do to help avoid future crises?
There are several reasons for the disparity. Predatory lending practices, now well documented, that targeted minority home buyers. These unsustainable mortgage products were marketed and sold to unsuspecting and uninformed minority buyers to quench the thirst of Wall Street investors. These products hurt all American borrowers, but wreaked economic havoc in minority communities where almost 90 percent of family net worth was tied to homeownership. While we believe that the primary housing usage is for safe shelter, NAREB also realizes that long-term home ownership, and the equity realized, has traditionally provided minorities the opportunity to fund college tuitions, start up small businesses, and retirement income for aging homeowners. Another key factor rests in double-digit unemployment. Today, only 61 percent of African-Americans are in the workforce, the lowest number since 1982.
How can NAREB help avoid future crises? We will be far more vigilant being advocates for "democracy in housing," which has been our association's guiding principle since our founding 66 years ago. As advocates, we believe it is our obligation to understand, speak up, and take action on any issue affecting African-Americans' ability to own an affordable and sustainable home in communities of their choice.
What about lenders and others involved in the home-buying process?
One of our major concerns today is access to mortgage capital. Down payment requirements have increased, financing costs have gone up, and in some cases by 100 percent. People who lost homes to foreclosure are now unable to restore wealth in the form of home equity. The Housing and Economic Recovery Act of 2008 mandates affordable housing goals, including sustainable mortgage products designed to accommodate low- and low- to moderate-income families. NAREB wants to see these government mandates put to work.
The Act also calls for the housing GSEs [government-sponsored enterprises], Fannie Mae and Freddie Mac, to provide leadership in the marketplace. Unfortunately, they got into trouble when both attempted to act like Wall Street and purchased subprime loans for profit as opposed to their normal, more measured practices. We need Fannie and Freddie to return to their original mission of providing liquidity to the marketplace through the purchase of loans underwritten to the borrower's ability to repay guidelines. The popular idea of moving mortgage financing to the private market … to Wall Street … is ridiculous. Isn't that where the crash just happened? We need real loans for real people at fair costs.
As a real estate agent working in Ellicott City, you've spoken in the past about how white buyers make up a small portion of your business. Has that changed?
Very little. As I mentioned earlier, as a rule people do business with other people with whom they are most comfortable. If that's a person's preference, the rule continues. African-Americans and other minorities feel comfortable with real estate professionals that look like them. Again, that's a preference and a comfort level.
My brokerage provides quality real estate services to anyone looking for professionals with integrity and who are knowledgeable about the industry, the area, and who are there to walk them through the very complex process of buying or selling property. That's why I'm in business to provide a quality service to anyone regardless of race, color, gender or country of origin. I live as well as operate my brokerage in Howard County. I raised my family here. And yes, most of our business continues to come from Baltimore County residents and commercial businesses, but we're here and our door is open to everyone no matter where they live or who they are.
You grew up in rural North Carolina in the 1960s and volunteered in the ninth grade to participate in the integration of the town's white high school. What was your experience like? Did it change over the course of four years?
When I think back, I'm not really sure why I volunteered to integrate the area's senior high school. It wasn't the influence of my parents, or that of my siblings. I just did it. But I have to say, the experience was a horrible one. For the first two years of "voluntary" integration only 1 percent of the student body was African-American. Up to that point, I attended school from grade one to eight in an all-black school with all black teachers. And what a cultural shock it was for my buddy and me. So much so that I had to attend summer school to keep up with my educational studies.
Every week we could count on two or three fights and taunting on the school bus. The bus driver at the time was a timid, young white girl in the junior or senior grade who didn't deal with the racial incidents that occurred. I learned a valuable lesson, however, from that experience. When I became a junior, I applied for and got the bus driver's position. And every student on the bus, black or white, had to abide by my rules! And if they didn't the students were reported and disciplined by the school authorities. Fair and equal opportunity justice!
Owner/broker: EXiT Spivey Professional Realty; president, National Association of Real Estate Brokers
Previous Job: Train conductor for Amtrak
Hometown: Merry Hill, N.C.
Education: Graduate of Bertie High School, Windsor, N.C.; real estate and appraisal licensing; brokerage license, REO broker and other professional certifications
Resident: Ellicott City
Family: Divorced father of five children
Hobbies/interests: Hunting, fishing, board and card games, travel