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Sharing in the dream

Latinos have become a fast-growing segment of the home-buying market. Lenders are working to eliminate obstacles to ownership by easing conventional loan rules.

May 01, 2005|Diane Wedner | Times Staff Writer

Children's laughter, sizzling homemade tortillas and the savory aroma of chopped cilantro entice family and friends into the Gutierrezes' Pasadena home most Friday nights.

A crowd of 30 sisters, brothers, in-laws and cousins gathered recently in the family's living room, kitchen and backyard -- a weekly tradition since Ana and Eduardo Gutierrez and their two children moved into the two-bedroom home in September -- to shrug off the workweek and enjoy bountiful food, a movie on the big screen and swimming in the inflatable pool.

"It may be small, but for us this house is a castle," Eduardo said of the 1,019-square-foot, white stucco house, which the couple bought on a tree-lined street for $360,000.

Whether newcomers to the United States or third-generation Americans, first-time Latino home buyers are overcoming cultural and institutional barriers, such as distrust of banks and lack of traditional credit, that for decades prevented many from buying homes. They are purchasing condos and single-family houses in Southern California, from the Inland Empire to the Antelope Valley, and helping to gentrify some neglected neighborhoods.

Spanish-language marketing campaigns are helping boost homeownership rates among Latinos, who, like other home buyers, are taking advantage of low interest rates and abundant mortgage options.

More significantly, lenders see opportunity in the growing Latino market and are loosening conventional home-loan credit rules, enabling more in the fastest-growing demographic in California to purchase homes.

Two-thirds of California's Latino population is under 35 and entering its peak home-buying years, according to Pepperdine University's Davenport Institute for Public Policy.

The percentage of Southern California home buyers with Spanish surnames nearly doubled in the last decade, from 17.6% in 1994 to 34.3% in 2004, according to DataQuick Information Systems, a La Jolla real estate research firm.

"It's like a dam has broken open," said David Toyama, head of a Coldwell Banker real estate business in Eagle Rock that focuses on Latino buyers. "The banks and real estate companies are finally tapping into the flood of buyers."

Although strides have been notable, Latino home-buying still lags behind that of non-Latino whites in the state. Latinos made up about 23% of Californians who bought homes in the last two years, whereas non-Latino whites accounted for 59% for home buyers, according to the Public Policy Institute of California. Latinos made up 35% of the state's population in 2003, and whites 45%, according to the U.S. Census Bureau.

In Southern California, many Latinos continue to be attracted to the enclaves of Pico Rivera, Compton and Lynwood, but a growing number of buyers now are heading to the northern parts of Los Angeles and San Diego counties.

The percentage of Latino home buyers in Littlerock, in the Antelope Valley, grew from about 15% in 1999 to 57% in 2004, according to DataQuick. In Vista, north of San Diego, the percentage of Latino buyers grew from 14% to 44%. Latinos are expanding their presence in Glassell Park, El Sereno, Covina, Azusa and Eagle Rock.

Many Latinos are moving far from the urban core into Fontana, Riverside and Ontario in the Inland Empire, according to census figures. Anaheim and Santa Ana in Orange County have long been magnets for Latino buyers, say agents and demographers.

Some longtime residents resent it when Latinos move to new areas and Spanish-language businesses spring up to serve the newcomers, said Henry Cisneros, the former Housing and Urban Development secretary who now heads Texas-based American CityVista, which has developments in Southern California urban communities. Gradually, though, as investment in the neighborhood improves home values, tensions ease, he added.

Latino communities are drawing investor interest. Boxer Oscar De La Hoya, who is also a businessman, last week announced a joint venture with real estate developer John Long that will invest $100 million in housing and business projects over the next three years in struggling Latino communities in California.

Cisnero said builders should be aware that Latinos are looking for specific amenities, which include extra bedrooms for extended family; neighborhoods near churches, schools and public transportation; extra outdoor space for gardening, barbecuing and entertaining; and workspace in or near garages for those who need to store tools associated with their occupations.

For existing homes and condominiums in Southern California, buyers with Spanish surnames paid a median price of $382,500 in February, compared with $425,000 for all buyers, according to DataQuick.

Monterrey, Mexico, native Jorge Perez and his California-born wife, Soraya, bought their three-bedroom fixer in La Mirada for $420,000 after realizing they were priced out of Fullerton and La Habra in Orange County, where they would have preferred to live.

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