SAN ANTONIO — Real estate professionals, as a whole, have been slow in adapting to the needs of Hispanic buyers and sellers, which represents a large and growing market segment, noted Oscar Gonzales, founder and managing partner for the Gonzales Group, a multicultural consulting group.
"The banking industry — they’re light years ahead of the real estate industry in accommodating (the Hispanic) segment," said Gonzales, who has served in executive staff positions with Realtor associations and in 2009 served as a liaison to Mexico for National Association of Realtors leadership.
Gonzales spoke Thursday during a session at the annual National Association of Real Estate Editors conference.
"A lot of Realtors and builders have been in preserve-and-sustain mode since the bust. Now they’re seeing that the customer base has changed and what they’re doing isn’t necessarily working."
The population of U.S. Hispanics was 50.5 million in 2010, according to the U.S. Census Bureau, or 16.3 percent of the total population — up 46.2 percent from 2000.
Membership in the National Association of Realtors is far less diverse. According to the trade group’s latest membership survey, released in May, about 6 percent of Realtors are Hispanic, and 82 percent of members are white (compared with 87 percent white in the previous year’s survey).
The latest annual State of the Nation’s Housing Report, produced by Harvard University’s Joint Center for Housing studies, expects that "minorities will account for 7 out of 10 of the 11.8 million net new households in 2010-20," with Hispanics contributing 40 percent of that increase.
That report also noted a widening gap in the rate of homeownership — the 2010 homeownership rate was 74.4 percent for whites (down 1.5 percentage points from 2009) and 47.5 percent for Hispanics (down 2.1 percentage points from the prior year), according to the Census Bureau’s Housing Vacancy Survey.
In its latest annual report, "State of Hispanic Homeownership: The Pivotal Decade," the National Association of Hispanic Real Estate Professionals urged policymakers to avoid regulations that would depress that gap further, such as requiring 20 percent or more downpayments for qualified residential mortgages.
The association also called for the funding of homebuyer education programs and regulations that would allow lenders to take into account alternative credit rating information when considering borrowers for approval. Such information could include the borrower’s rent, utilities, and insurance payment history.
Citing a third-quarter 2010 Freddie Mac survey, the association said Hispanics are more likely than the general population to say they are likely to buy a home in the next three years, 34 percent vs. 24 percent. They are also more likely to see owning a home as a symbol of success and as a good way to build up wealth that can be passed along to their families.
"As the second largest consumer segment in the nation, Hispanics have the potential to reinvigorate the housing sector and accelerate the economy with their labor productivity, strong work ethic and the massive purchase power of their sheer numbers," the report said.
Gonzales said some big builders are being very progressive in trying to serve the growing population of Hispanic homebuyers, designing homes that fit with cultural norms — such as open floor plans, two master suites to accommodate multiple generations, gas stoves, and the use of brick building materials rather than wood.
The violence in Mexico is already impacting real estate purchases, both domestically and internationally, he said, and there has been "an influx of wealthier Mexicans buying second homes for cash," he said.
And other instability in Latin America, such as the devaluation of Venezuela’s currency, has likewise led some foreign buyers to purchase second homes in the U.S., said Scott Caballero, chairman, San Antonio Board of Realtors, another panelist in the conference session.
Gonzales said that it’s important for real estate professionals to carefully explain the real estate transaction process to buyers who are not familiar with it, and to "try to explain what the role of a Realtor is," as they may not have previously worked with agents.
Caballero and Gonzales noted that undocumented workers can and are finding ways to purchase homes, and that there are lenders who will issue mortgages based on individuals with an Individual Tax Identification Number who are not U.S. residents.
These so-called ITIN loans perform quite well, Gonzales said, with less than 10 percent default rates. "There are still a few banks around the country doing it pretty aggressively."
Caballero, of PenFed Realty in San Antonio, noted that such loans can require down payments of 30 percent. And some undocumented workers are able to obtain owner-financed properties, he also said.
"They do see the advantages of homeownership, and they’re finding ways to purchase," he said.
Still another segment of undocumented workers "are going back home simply because there’s (no employment) here," Gonzales said.
Inman News staff writer Andrea Brambila contributed to this report.
