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Buying Property in Record Numbers
| Several months ago, the Shen family lived comfortably in a three-room apartment in Chinatown. The bustling community provided familiar sights and smells for the Shens. Asian faces greeted them every morning, voices spoke in familiar languages and Asian groceries were right outside their front door. Chinatown provided a safe haven for the Shens, who immigrated from China some 13 years ago. But all that changed when a new owner bought their apartment building and served eviction notices, forcing the Shen family to leave within six months. “It was a sudden situation,” Janny Shen, a junior at Galileo High School, explains. “My parents wanted to wait a couple years to see if the prices for houses would go down, but [the new owners] kicked us out.” The Shens weren’t sure they would be able to find an affordable house in the little time they had, but within four months, they moved into a three-bedroom, two-bath house in the Sunset. “It was pretty hard looking for a house,” Shen says. “Houses are expensive nowadays.” Though they didn’t buy their home with relatives, the Shens are currently remodeling the garage so that their aunt and uncle can move in and help pay the mortgage of $2,000 a month. The Shens are not alone. Asian Pacific Islander Americans are purchasing property in record numbers. In fact, statistics in the 2000 Census reveal that in the last 10 years, minority home-ownership has been on the rise. Moreover, among minority groups, APIAs have the highest home-ownership rates: 57.3 percent in the Bay Area (compared to 34 percent in the general population) and 55.1 percent statewide.Though the economic boom of recent times has slowed, APIAs are still buying, says Fanny Chu, a real estate agent with Prudential Realty in San Francisco. Traditionally in Asian cultures, the home is the center of the family, and the family is the core of society. Many APIAs bring these values to the United States. This in part, has fueled home-ownership among APIAs, according to Chu. The Meaning of “Mine” Realizing the “American Dream” has driven millions of people to uproot themselves and their families and try their hand at “making it” in the United States. From the time of the legend of Gold Mountain during the 19th century to the burgeoning high-tech boom over the past decade, Asians have contributed to this migration. Once they arrive, achieving success, for many, means buying a home. The U.S. Department of Housing and Urban Development reported that last month, minority home-ownership nationwide reach a high of 48.8 percent in the second quarter of 2001. In the Bay Area, according to 2000 Census figures, APIAs showed the largest incrÅase in the trend toward buying. Though statewide minority home-ownership, at 44.6 percent, lags behind the national average, minority groups today are more likely to own homes than a decade ago. Many involved in real estate attribute the high rates of APIA homeownership to tradition. “In Asian culture, family is important,” Chu says. “Family living under one household is important.” A New Breed of Homeowners The economic boom of the mid-to-late 1990s meant people had money to burn. The stock market rose, and so did prices in real estate. Young professionals with high technology experience arrived with H-1B passports to work in Silicon Valley. Houses were eaten up as soon as they appeared on the market — most not staying longer than 30 days. Some were even sold before they were built. Fierce bidding wars escalated prices by $100,000 to $150,000 over the asking price. “Everything happened so fast,” Steve Dhillon, a real estate agent with Property Professionals in Fremont, says. “Payments were in cash, with multiple offers. [Buyers] weren’t even inspecting the property.” Discouraged by the lack of affordable housing, many middle-class families moved outside of San Francisco. “The affluence of the dot-com created a frenzy in the sellers market,” Chu says. “It created a buying splurge.” As a result of pricey real estate, more APIAs relocated to suburbs, and some even moved out of California to cities such as Las Vegas. When the Shen family searched for a home, they considered houses outside of San Francisco. “In San Jose, houses are really cheap and really, really nice,” Shen says. Lack of transportation and other conveniences prevented them from purchasing there, however. Though the economy has slowed, houses are still coveted treasures in the Bay Area. Since the tech stock crash, the market has cooled somewhat and has almost returned to a semblance of normalcy. But for many, prices in the city are still too “damn expensive,” says Dhillon. “Buyers are more reluctant to make expensive purchases now. They’re more picky,” he says. Instead of seeing a glut of young, wealthy, first-time buyers, Dhillon notices more move-up buyers — those who sell their existing houses for more upscale properties. Dhillon, who comes across many young, wealthy Indian and Chinese American professionals, says many are starting to move out of the heart of Silicon Valley, areas such as Palo Alto and Cupertino. “They still want to be close to the Valley, but [housing] is more affordable in Fremont, Santa Clara, and the East Bay.” Recent census figures show that 75,165 Asians now live in the Fremont area, an increase from 32,065 in 1990. In California, Fremont has the third largest Indian American population, and the fifth largest Chinese population. Meanwhile, Milpitas has the highest percentage of Asian home-owners at 35.1 percent. Slow Times Ahead? For their house in the Sunset, the Shen family had to bid an extra $100,000. Though it didn’t meet all of their qualifications, they are satisfied that it has bright lights, a decent backyard, and most of importantly, they now live close to relatives. Real estate prices are still high, but sales have slowed dramatically, says Dhillon. “At the beginning of the year, sellers were looking at the glory days of last year and pricing their houses. Now, the market is allowing contingent buyers to get in and move up,” he says. “The more expensive the home, the bigger the drop in sales.” Many say the housing market won’t show the effect of the dot-com crash until six or seven months down the road. “We will see the effects once they have depleted their savings, and foreclose,” Lee says. Foreclosure occurs when owners are no longer able to make payments, and banks take over the property. The bank usually sells the house at a lower price, causing the market to go down. On the bright side, Dhillon adds: “Mortgage rates are low. Interest rates are low. Some buyers get in just to take advantage of the rates.” Despite the lagging economy, APIAs continue to be a strong force in the real estate market. “I still see young Asian immigrants with money to buy houses,” Chu says. “They’re not as heavily hit as white America, I think, because the family is still involved in buying the home. If they’re in financial trouble, they have family resources to catch them.” She adds: “Prices are never cheap in the Bay Area, but I like to empower my clients with information, so they are able to make the right choices for themselves.” |
