Industry Sees Growth Potential of Minority Homebuyers
Housing: Hispanic Population Could Almost Double in Next 30 Years
BY MANDY JACKSON
While home ownership is at an all-time high nationally, minority home ownership still lags far behind.
To close the gap and capitalize on the large untapped market, everyone from local homebuilders to national lenders are trying to meet minority buyers’ needs.
“If you review the statistics from Sandag (the San Diego Association of Governments), the Hispanic (population) is going to be growing. It makes sense to accommodate them,” said Sandy Perlatti, senior vice president of marketing for the Corky McMillin Cos.
Headquartered in National City, McMillin has homebuilding and real estate agency divisions. Many of its offices are in Chula Vista and other South Bay communities, which have high concentrations of Hispanic residents.
According to estimates from Sandag, the Hispanic population will nearly double between 2000 and 2030, increasing 90 percent from 750,965 in 2000 to 1.4 million in 2030 only 100,000 people shy of the Caucasian population.
The black population will increase 28 percent, adding 42,951 people, and the Asian population will grow 49 percent, adding 121,407 people, Sandag figures show.
McMillin always has two sales representatives at its homebuilding sites, one of whom is fluent in Spanish. McMillin Realty offices usually have people fluent in Spanish, some Asian dialects, and other languages besides English.
“Even though (buyers) speak English, a lot of times they feel more comfortable talking about their finances in Spanish,” Perlatti said.
In June 2002, President Bush challenged the housing industry to create 5.5 million new minority homeowners by the end of the decade. So far, the country has added 1 million new minority homeowners.
“If you desegregate home ownership rates, more than three-fourths of whites own homes and less than half of Blacks and Latinos do,” said Stuart Gabriel, director of the Lusk Center for Real Estate at the University of Southern California.
Figures Reflect Disparity
According to the Census Bureau, 68.6 percent of Americans owned their homes in the fourth quarter of 2003. However, only 50.6 percent of minorities are homeowners.
“People have been pushing on this topic for many years,” Gabriel said.
Firms are being formed with the intent of servicing home loans for minorities, educational programs are being provided at universities, and mortgage companies are targeting minorities, he said.
GMAC Mortgage Corp., a lender based in Horsham, Pa., opened an office in Chula Vista last year with bilingual loan officers.
Jerry Clark, the local district manager for GMAC said the company was long overdue in opening a Chula Vista office, since the city is the fastest growing city in the county.
GMAC has developed national programs for what it calls emerging markets, such as minority groups, immigrants, and low-income buyers. It has options for buyers with no credit and people who don’t have enough money for a traditional 20 percent down payment but can afford monthly payments.
“If they haven’t been able to save through banks, they have down payment options,” Clark said. “If they don’t have a credit card or car payment, they can use their rental (payment) history.”
Ruben Garcia said national lenders are still learning how to qualify Hispanic and other minority homebuyers for loans.
Garcia founded the National Association of Hispanic Real Estate Professionals in 1999 in San Diego. He is now the director of business development.
“We know there’s 1.5 million Hispanics that would qualify to buy a home right now but they don’t know it,” Garcia said.
In addition to helping lenders and others, the association teaches buyers how to understand the real estate market.
Cheryl Betyar, a real estate agent with One Source Realty/GMAC in Rancho Bernardo, has been a trainer for At Home With Diversity. The program created by the National Association of Realtors teaches real estate agents about cultural preferences as well as fair housing laws.
The program provides information on marketing methods and cultural traditions. Trainees learn how certain words and body language might be interpreted. In some cultures it is not appropriate to greet someone with a handshake.
“The different cultures that we deal with every day are the new majority,” Betyar said. “By connecting with different cultures, it builds that trust that is of high importance to them.”
On the marketing side, homebuying seminars have proven to be a good way to bring in minority homebuyers, Betyar said.
“You come to the table with the understanding that all people want the benefit of home ownership,” she said.
Marcus & Millichap Handles Sale of RV-Mobile Home Parks
Marcus & Millichap Real Estate Investment Brokerage Co. brokered the sale of a seven-property mobile home and recreational vehicle park portfolio for $45 million, including three local properties.
Bruce Herrmann, Douglas Danny, and Patrick Mockler of Encino-based Marcus & Millichap represented the seller, Palo Alto-based Essex Property Trust Inc.
A La Jolla-based private investor bought the 179-unit Circle RV Ranch in El Cajon, which sold for $6 million; the 158-unit Vacationer RV Ranch in El Cajon, which sold for $5.1 million; and the 1,019-unit Golden Village Mobile Home Park in Hemet, which sold for $7.4 million.
A Northern California investment group bought the 157-unit Green Valley senior mobile home park in Vista for $10 million.
Other properties in the portfolio were in San Jacinto and Las Vegas and sold for $1.4 million and $16.5 million to Southern California and San Francisco investors.