Get ready, brokers, to practice your Espa ol, because Hispanics are going to become a large percentage of your clientele.
Just five years ago companies were not specifically targeting the Hispanic market, but they are today. Developers, such as those in Florida and Texas, are beginning to target the Hispanic community and market condos and homes to Hispanics in those states.
In New York, it may only be a matter of time before this begins to happen. Certainly, most real estate offices in New York City have at least one Spanish-speaking member on staff, if not several. Mortgage and real estate brokerages here are also courting the new Hispanic market via Spanish-language Web sites.
Coldwell Banker Hunt Kennedy has a team dedicated to meeting the needs of its Hispanic clients. And Manhattan Mortgage Company provides potential buyers with Spanish-speaking agents, along with an interactive Web site in Spanish.
Last November, Prudential Rand Realty, which serves primarily Westchester, the Hudson Valley and Rockland County, created a new division called Prudential Rand Latino in White Plains with an all-Spanish Web site designed to help house-hunters in their native language.
“We created this because we realized a significant segment of our population was being poorly serviced,” said Greg Rand, managing partner of Prudential Rand Realty. “Our area is more affordable than Manhattan and there is a steady stream [of Hispanics] out to the ‘burbs. We have over 50 people who speak Spanish working here and the customers are responding very well. We see it as our role to welcome people to our area, and if the Latino community prefers to be welcomed in Spanish, then that’s what we will do.” “There is a growing middle-class Hispanic market [in New York],” said Jos Torres, a broker at Coldwell Banker Hunt Kennedy in Manhattan. “Our company is aware of the opportunity to attract the Hispanic investor, and I make them feel comfortable because I can help them through the process and speak their language,” said Torres.
Market potential
According to statistics from the Pew Hispanic Center, there are 2.2 million Hispanics living in New York City and 117,000 of them are currently homeowners, up from 60,000 in 1990. The number of Hispanics who own their homes is expected to double in the next 15 years.
Three things have increased the number of Hispanic home buyers: mortgage rates have gone down, the real estate industry is more aware of the Hispanic market’s buying power, and the Hispanic middle-class has grown, brokers say.
“Lower mortgage rates have made it more attractive to more Hispanics to own homes,” said Peter Mu oz, a Spanish-speaking broker from Manhattan Mortgage. Mu oz said half of his client base is Latino, and he notes that there are now many programs tailored to Latinos who may have a less-than-perfect credit history. He cites programs “that offer up to 100 percent financing, and many banks that will lend based on assets without income verification.”
But Mu oz said that his clientele are not only looking for Spanish-speaking agents. According to him and other Hispanics in the industry, Latinos want brokers who understand the Latin culture. For many Hispanics, business transactions are viewed as more personal. They look for a personal connection with their brokers and bankers as they discuss their finances, jobs and family histories.
Mu oz is quick to point out that most of his clients speak English, but do prefer to use Spanish. “It’s not just about the language. It’s more about understanding the culture and their concerns before they arise, like concerns over credit or finances. I let them know that we are here for them in the future and that our company is going to be here for them. We’re going to meet the needs of the Hispanic community.”
In the boroughs
In New York, Hispanics have purchased homes predominantly in Queens, followed by the Bronx and Brooklyn. Today there are more than 46,000 homes owned by Hispanics in Queens. In the Bronx, 29,193 Hispanic families now own residential properties. Manhattan is home to the lowest number of Hispanic homeowners; only 8,550 live in their own property there.
“The number of Hispanics buying real estate in New York is growing because of the boom in the Hispanic middle class, and it will continue to grow. I think that the majority [of Hispanics] living elsewhere will come to New York because some of the better-paying jobs are here,” Mu oz said.
“I find my clients are looking for more space and homes where there are public spaces nearby where large groups can gather,” said Mu oz. “Also, like for everyone else, it’s about affordability.”
According to the Pew Hispanic Center, approximately 1.5 million Hispanic families will buy homes in America by 2010. Some in the industry project that an additional 700,000 Hispanic families could become homeowners if given increased access to mortgages.
Those who will benefit from these new opportunities will not just be immigrants or low-income families. The experts at the Pew Center predict only 2 million of the 15 million new Hispanic homeowners projected over the next quarter-century will be immigrants.
Access to financing
The Hispanic National Mortgage Association (HNMA), a nonprofit based in California whose goal is to increase Hispanic home ownership, reported that one-third of all Latino home loans today are financed through mortgage brokers.
Like Manhattan Mortgage, HNMA wants to reach those 15 million potential buyers.
“We believe that entities like HNMA will help to capture the over $300 billion of mortgage volume opportunity that exists within the most underserved segments of the Hispanic community,” said Ron Jauregui, senior vice president of Community Alliances at HNMA.
“It’s been fairly recently that the industry gained an overwhelming interest in serving the Hispanic market, inspired by the fact that more than 40 percent of first-time homeowners over the next 20 years will be Hispanic,” he continued.
“In the past, any member of the Hispanic community that may have had difficulty obtaining a mortgage was usually because of the lack of funds for the down payment for first-time buyers or showing all the sources of income for self-employed or foreign investors,” said Mu oz. “There are obviously many [Hispanics] with the income needed to pay the monthly living expenses, but they may not have all the funds needed for the down payment and closing costs. They can only be best helped by a mortgage broker because of the resources we have available to us.”
In the past, lenders such as banks saw Hispanics — many without credit history or collateral — as “high-risk” borrowers. Hispanic homebuyers found they often ended up with high interest rates on loans, or simply not enough money to buy what they wanted.
Now, HNMA is borrowing money from lenders and creating their own, lower-interest-rate loans for the Hispanic community. “We are the first company of its kind to do this,” said Jauregui.