San Francisco Chronicle - (Sunday)
Latinos bypassing Bay Area in quest to buy homes
Erika Carrasco has a mantra for wouldbe homebuyers wary of the Bay Area’s record pandemicera prices: “Querer
es poder,” or, “where there’s a will, there’s a way.”
Even amid record national growth in Latino homeownership, breaking into the hypercompetitive local market often means going to extremes. It could be offering $100,000 over the asking price. Maybe waiving your right to a property inspection. Or moving an hour away.
“At this point, it is so ridiculous,” said Carrasco, a 16year veteran Realtor at San Jose’s Intero Real Estate Services. “For each property, we’ve got 20 offers.”
About 60% of Carrasco’s clients are Latino. They range from firsttime Millennial buyers and longtime renters to families upgrading starter homes or scouting new investment properties. Together, they represent the fastestgrowing segment of the U.S. and California home buying markets, according to two new reports from the Urban Institute and the National Association of Hispanic Real Estate Professionals.
But the story is more complicated in the Bay Area, where Latino homeownership declined 6% from 201019, according to one analysis of census data by progressive advocacy group California Forward. While the Bay Area has lost Latino homeowners, California is poised to gain 6.7 million more of them by 2040, the Urban Institute projects, even as overall homeownership rates fall. The question is whether coastal Bay Area cities’ losses will keep fueling outlying areas’ gains, and whether the next generation will be hindered by familiar financial barriers or realize new economic power.
“Latino homeowners have 40 times the wealth of Latino renters,” said Noerena Limón, a senior vice president at the National Association of Hispanic Real Estate Professionals. That makes buying a house a crucial tool for finding financial stability and closing racial wealth gaps, she said, but it “becomes a problem when there aren’t enough homes to buy.”
Realtors and lenders say some longtime Latino homeowners are seizing the moment to sell their Bay Area homes and move to emerging lowcost markets like Houston, Phoenix or Boise, Idaho. As extended suburbs like Tracy, Gilroy and Brentwood become more unaffordable, others are considering fartherflung locales like Modesto, Los Banos and Madera.
For those moving away from jobs still technically in San Francisco or San Jose, the uncertain future of super commutes can be another daunting prospect. And even on the fringes of the Bay Area, winning bidding wars increasingly means sacrificing buyer protections, adding financial risk.
“Buyers are blindly accepting properties in asis condition,” said Lupe Silva, a former Apple software engineer who now runs Silva Real Estate Group in San Jose. “It has become so difficult for even areas like Manteca and Modesto.”
Federal mortgage data shows that prospective Latino, Black and native home buyers also still receive fewer home loans than white Californians, according to a report last year by Oakland social justice nonprofit the Greenlining Institute. The disparity can be magnified by risky deals like nocontingency home offers, Silva said, where buyers may have to come up with thousands of dollars to cover unexpected repairs or low property appraisals.
A lack of updated and detailed local data makes it hard to gauge exactly how many people from different demographic groups are moving during the pandemic. For smaller rural counties, accurate recent census estimates on Latino homeownership are especially hard to come by, though areas like Fresno appear to be growing. Personal motivations also drive the market, like Latinos’ higher rates of multigenerational households.
“Familia, or family, is just so central to the culture,” Limón said. “A lot of what happened during COVID, for all families, was a need to have four walls that are safe.”
On a recent afternoon in the eastern Contra
“Latino homeowners have 40 times the wealth of Latino renters.” Noerena Limón, senior vice president at the National Association of Hispanic Real Estate Professionals
Costa County exurb of Brentwood, Elizabeth Olivera juggled an infant and a furniture delivery in her new fivebedroom, threebathroom house. “Quieren ayuda?” (“Do you want help?”) she yelled to the movers.
Buying a bigger house in a better neighborhood suddenly became much more important to 30yearold Olivera when she hit the COVID trifecta of losing a job, planning a wedding and preparing for a baby. Carrasco, the real estate agent, helped her navigate a barrage of offers to sell the twobedroom, onebathroom San Leandro house Olivera’s father left her when he died, then used the money to secure the $655,000 house in Brentwood.
But that was only after the selfproclaimed city girl made a deal with her husband, who wanted more space to host family visiting from Mexico: “If you want to move out in the suburbs,” Olivera told him, “I need a pool.”
She got the pool. More importantly, they got better financing on the new house, and Olivera has a 15minute drive to her new health care job in Antioch.
“When I first moved out of my dad’s house, I cried,” Olivera said, though the shock has faded since the baby arrived. “I never — never — thought in my life I would have a house like this.”
For firsttime Latino buyers who don’t have another house to sell, a growing number of banks and nonprofits offer costassistance and loan programs. As of January, recipients of the Deferred Action for Childhood Arrivals immigration program, or DACA, are eligible for federally backed mortgages. More lenders are also approving immigrants with a federal tax identification number in lieu of a Social Security number, said Eric Becerra, area manager for the Fresno office of Cardinal Financial Co.
“You have folks that were maybe previously in the shadow,” Becerra said. It’s another factor — along with lower prices and familyfriendly floor plans — that’s contributing to “a perfect storm” of demand for homes in the Central Valley.
For Carrasco, today’s high price of admission is a hurdle that can be overcome. In Santa Clara County, where she lives, the median home price has soared to $1.3 million, compared to a median Latino household income around $80,000. Buy a house farther away now when mortgage rates are low, she says, and you can always move back to the city later.
The persistence required today reminds her of the path she carved after moving to the U.S. from her home state of Durango, Mexico, way before she had her own Carrasco Team selling millions of dollars in property each year. Almost two decades ago, she started out as an assistant making $12 an hour in San Jose.
“Back then, the houses were $600,000,” she said. “Now, that’s not even a condo.”