November 28, 2014
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Home Ownership Spikes For CA Latinos

SANTA ANA, CA - Hundreds of thousands of white Californians, most of them under age 45, gave up their homes in the past decade, an Orange County Register analysis of census data shows.

While homeownership declined among non-Hispanic whites, it rose sharply among Latinos and Asians, the Register found.

Rising population is a primary reason for the rising number of minority homeowners. But that alone does not account for the increase.

The new census data also shows that Wu is atypical of homeowners in one important respect: She's young while homeowners as a group are getting older. The typical California homeowner was 54.6 years old in 2010, 3 years older than his counterpart in 2000.

 

The number of Anglo homeowners under the age of 45 fell by nearly 500,000 between the 2000 and 2010 censuses. Older Anglos made up most, but not all, of the difference.

"The big question is, why did the whites start to move out?" asked Dowell Myers, a University of Southern California demographer. He speculated that some may have sold their homes for cash in mid-decade before prices began to decline. But "these people are too young to retire," he added.

Anglo homeownership declined in 31 of the state's 58 counties, falling in all of the big counties except Riverside, Sacramento, San Francisco and Kern. It also declined in 70 of the state's 100 largest cities and towns, ranked by number of owner-occupied homes.

By contrast the number of Latino and Asian homeowners swelled throughout the state despite the challenges of soaring prices followed by a crushing recession.
In Orange County, Anglo homeownership declined in north and central county and in an area of south county extending roughly from Foothill Ranch coastward to Laguna Beach and Dana Point.

In percentage terms, the decline in Anglo homeownership was small – 3.6 percent statewide and 8.6 percent in Orange County. But it was much higher in selected age groups, particularly among those in their 30s and 40s, often reckoned to be the prime homebuying years.

And the exit of these owners and potential buyers created a historic opportunity for minorities.

During the first decade of the new century, Latino homeownership expanded in California by 34.2 percent, and Asian homeownership by 43.3 percent.

In Orange County, Latino homeownership increased by 22.3 percent, Asian homeownership by an extraordinary 51.7 percent.

Blacks comprise a tiny share of California homeowners – 4.5 percent statewide and 1.1 percent in Orange County.
Deep in the census numbers is a possible explanation for the growth in Latino homeownership statewide: a long, patient wait. Most new Latino homeowners in the last decade were at least 45 years old in 2010.

"The whole population is getting older," said Myer, the USC demographer, "and you've got more expensive housing, so it takes them longer to qualify for a mortgage."
By contrast, Asian homeownership expanded in every age bracket, perhaps because Asians are much more likely than Latinos to have college degrees and thus command higher incomes.

Homebuilders and real estate agents have seen the upswing in Latinos and Asian homeownership firsthand.

"I have investors with cash, and they ask me to buy multiple homes for them," said Kim Vu, a Vietnamese immigrant who works as an agent for Evergreen Realty in Irvine.
"Our children have good jobs and are buying houses," added Phillip Park, 67, a Los Angeles real estate working for New Star Realty and Investment, which caters to Korean immigrants. "They're more like Americans. Young people own houses."

Rising population is, of course, a primary reason the rising number of minority homeowners. But that alone does not account for the increase. Several Asian real estate agents suggested other factors are at work, including:
•Opportunity: While non-Hispanic whites have soured on real estate, minority home shoppers see the current market as a chance to buy property at bargain prices.
"If you even mention to (Caucasians) to buy something, they think you have three heads. They see prices dropping," Vu said. " ... The minority (buyer) is different. They look at it as a golden opportunity right now."
•Financial security: While Asian immigrants may not be familiar with stocks or 401(k) plans, they see buying a home as a sound investment.
"Real estate," said Aaron Yu, president of the Orange County chapter of the Asian Real Estate Association of America. "That's tangible."
•Long-term investing: Asians buy homes for the long haul, not for flipping, Yu said. Hence, they're less worried about fluctuations in the market.

•Affordability: In countries like Korea and Japan, where land is scarce, home prices are out of reach for many. Not so in the U.S., where tax credits, foreclosures and falling prices make buying a home easier.
"Homeownership is very important to Asians. Even back home in their homeland, it was important," said San Francisco broker Allen Okamoto, founding chairman of the national Asian Real Estate Association. "The market has made it available for Asians to buy."
•High saving rates: While images abound of wealthy Chinese and other Asians buying up property, most Asians are of modest means, Yu said.
"They're going to save as much as possible to afford the best school district and community for their children," he said. "That's their mentality. 'We're doing this for the betterment of our children.' ... They would save from five to 10 years and have enough down payment to purchase the home."
Meanwhile the American-born children of Latino immigrants are getting better educations and landing better jobs.

"Those are some really dramatic shifts in those numbers," said Robert Kleinhenz, deputy chief economist for the California Association of Realtors. "The first part of the general trend is the changing ethnicity in our population. ... (But) I'm willing to bet that over time, at least the Latino group has seen greater affluence. With greater affluence, comes a greater increase in homeownership."

Although census numbers reflect higher homeownership rates among older Hispanics, Kleinhenz said there are signs the trend is spreading among younger Latinos as well.

The gains in Latino homeownership are the result of "a natural progression," said Santa Ana broker Albert Del Rio, president of the Orange County chapter of the National Association of Hispanic Real Estate Professionals.

"They're assimilating," Del Rio said of younger Latinos. "They're going to college and getting a job in the corporate world as opposed to working in the back of the kitchen." 



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