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REALTOR®: Emerging markets will impact real estate industry

Wednesday, May 2, 2007

It is estimated that by the year 2010, 60 percent of all first-time home buyers will come from emerging markets, mainly immigrants from Latin America and Asia.  According to the most current data from the U.S. Census Bureau, some 33.5 million foreign-born residents live in the United States, making up 12 percent of the country's total population. The majority of immigrants, 53 percent, are from Latin America; 25 percent from Asia; and 14 percent from Europe.

The Latino population in the U.S. has grown dramatically in the last decade, owing largely to immigration and relatively high birth rates. Among Asian immigrants, the three largest Asian American groups across the nation were Chinese, Filipinos, and Asian Indians in 2000. In 2004, over half of the 14 million Asians lived in just three states: California, New York, and Hawaii, with California having the largest concentration of Asians – 35 percent.

The homeownership rate for immigrants, however, continues to lag behind that of native-born residents by as much as 30 percent. Major barriers for minority homebuyers are the lack of fluency in the English language, the lack of knowledge of the home buying process, lack of credit, trust (fear of being exploited) and the lack of sufficient funds for a down payment. Many immigrants also lack formal relationships with U.S. financial institutions and are not familiar with cultural or language-based government-sponsored or non-profit homeownership programs.

"Language is the key to a culture and cultural behaviors. If we want to reduce the homeownership gap among immigrants, we need to empower them with knowledge of home buying and financing processes in United States," Yogendrah Singh, a broker with Realty World, California Best Properties in San Jose, shared his opinion on this issue.

Singh is former president of the Council of Indian American Realtors (COIAR) and now president of the South Asian Real Estate Association of America (SAREAA). He said SAREAA is developing a multilingual Web-based resource center to empower South Asian communities with information on home buying and financing processes.

"Most immigrants that come here are starting from scratch. They have to build their nest egg themselves," according to Coldwell Banker Realtor Sue Bose. "Even in the job market, most times they have to start at the bottom or close to the bottom of the totem pole."

"Many immigrants distrust the home ownership system here, which in many cases although better than what they have back home, still seems unfamiliar," Bose added. "In some cases, too much information can be just that and cause confusion and indecision."

Bose and Singh, are members of the Cultural Diversity and Equal Opportunity Committee of the Silicon Valley Association of Realtors® (SILVAR). They say this is where Realtors® can help immigrants. Realtors with SILVAR subscribe to a strict Code of Ethics and are actively involved in enhancing understanding and awareness of other cultures within the association's membership.

Josie Gambera, a Realtor with Cashin Company, chairs SILVAR's Cultural Diversity Committee. She hopes the committee can provide a forum where the association's culturally diverse members can communicate and advance housing through education, business development and outreach programs.

"We can give better service to our clients if we understand the cultural nuances, changes and accomplishments of the melting pot that is Silicon Valley," said Gambera.

In order to be effective in strengthening homeownership opportunities for minority homebuyers, Gambera said on May 24, SILVAR will be hosting the first of a series of panel discussions on Realtor Etiquette & Ethics, which aims to help Realtors assist homebuyers, sellers and Realtors from other cultures in each step of the real estate transaction. The panelists will be composed of representatives of real estate associations that represent other cultures.

According to a study conducted by the Asian American Real Estate Association of America (AREAA), the Asian consumer market is one of the fastest growing markets in the U.S., next to the Latino population. The Asian American population grew 69 percent from 1990 to 2000. In addition, the buying power of Asians was $117 billion in 1990, and was projected to quintuple, increasing to $269 billion in 2000, and to $579 billion in 2010.3 The projected 397 percent gain between 1990 and 2010 is expected to be greater than the projected buying power of Caucasians (164 percent), and second only to the 413 percent projected increase for Latinos.

Gambera said SILVAR recognizes these emerging markets and seeks to address the diverse needs of these communities.

Different immigrant groups have their own ways of negotiating, decision-making and discussing financial matters. If real estate professionals are not aware of culture nuances, miscommunication can result and a transaction can run into trouble. Gambera hopes the upcoming panel discussion will help promote a greater understanding among Realtors, so that they can assist homebuyers and home sellers from all cultures. 
                          
                                                                 


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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