Summer 2017
Global
and
Luxury
Summit
Recap
/
Mysterious
AAPI
Homeownership
Gap
/
8
Things
YSK:
Immigration
Last year, foreign buyers spent
$235 BILLION on U.S. properties
$103 BILLION RESIDENTIAL
$132 BILLION
According to NAR’s 2016 Profile of International Activity in U.S. Residential Real Estate
COMMERCIAL According to Real Capital Analytics
NAR’s resources can help you capture this lucrative clientele: NETWORK
EDUCATION
RESOURCES
3,000 Certified International Property Specialist designees
Certified International Property Specialist designation
NAR Research on international buyes and sellers
5,000 International REALTORS®
At Home With Diversity certification
Realtor.com/international translates listings
Cooperating Associations in 66 countries President’s Liaisons to each country
Stay connected! realtor.org/global narglobe@realtors.org 1.800.874.6500
SUMME R 2017
Vo l u m e 9, I s s u e 2 ON THE COVER: Aerial view of Newhall Pass, just west of the San Gabriel Mountains / Shutterstock.com/trekandshoot
32
F E AT U R E S 32
Changing Faces: How Immigration and Food Transformed the San Gabriel Valley Once a declining region economically and demographically, the San Gabriel Valley is now a hub of business, culture, and tech that is exploding in population. How did this happen? In a word: Immigration. a | r | e ’s Jacki Ueng goes in-depth to talk about the SGV she knew growing up, and what it’s like today. This is the first in a multi-part series. By Jacki Ueng
4
14
Global and Luxury Summit Recap
20
AREAA Goes (Went) to Washington
14
a | r | e looks back at the wildly successful Global Summit held at the Four Seasons in Miami, Fl. The GLS was the largest AAPI event of its kind in the history of South Florida, with over 800 attendees from all over the world. Are you in any of these pictures?
AREAA once again shattered the record books, bringing over 150 members to over 75 appointments with members of Congress and relevant housing agencies. In this brief recap, we go over what our policy objectives were and the importance of having a powerful national voice for AAPI housing fighting on the front lines.
SUMMER 2017
20
Reach more buyers —
With our 3% down payment option Good news! There’s a way to bust a homebuying myth and open more doors for buyers — with low down payment financing. We’re ready to help you reach more potential buyers — and show them how a low down payment may help them become homeowners sooner than they think.
Put our simplified program to work for you Whether your buyers are looking for their first or next home, yourFirst MortgageSM — our 3% down payment conventional fixed-rate program — has unique benefits that you and your buyers will appreciate. • Down payment funds can come from a gift, savings, or down payment assistance programs • No area median income requirements • Unique opportunity for eligible buyers to receive a $750 closing cost credit — after they complete an approved homebuyer education course and their down payment is within the range of 3% and less than 5%
Meet different buyer needs with low down payment options Beyond our 3% down option, we have other low down payment options to meet the needs of specific buyers, including: • Active duty or veteran military service members and eligible spouses • Individuals looking to buy a property in an outlying rural area
A home mortgage consultant will be happy to meet with your buyers to explain the eligibility requirements like loan amount, type of loan, and property type. Note: With a down payment less than 20%, mortgage insurance is required which increases the cost of the loan and monthly payment.
Contact us Let’s team up to expand your opportunities and help more potential buyers become homeowners.
To connect with your local team, contact: diversesegments@wellsfargo.com
This information is for real estate, builder, legal, and financial planning professionals only and is i not intended for distribution to consumers or other third parties. Information is accurate as of date of printing and is subject to change without notice. Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2017 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801. AS3537979 Expires 8/2017
38
26
42
CONTENTS 18
1031: Understanding the Power of Like-Kind Exchange
28
Should you wait and save up to make a full 20% down payment on that dream home of yours, or should you try to get an offer in as soon as possible? Our home loan expert Dottie Sheppick looks at some of the various options available today that could help you or your client make the right decision.
There’s been a lot of talk in Washington about limiting or perhaps even eliminating IRS Code 1031. 1031 exchanges account for a significant portion of all real estate transactions, yet a lot of people still don’t really know what it is. Find out here. By Brenda Mueller
24
The Mysterious Asian Homeownership Gap AAPI tend to have high credit scores, high incomes, and low LTI and DTV ratios – yet the population still lags nearly 10% behind the national average in homeownership rates. Why? By Mark Fleming
6
SUMMER 2017
It’s Still About the Down Payment!
30
8 Things You Should Know: Immigration There is a lot of chatter these days about immigration and the role of immigrants in our communities. a | r | e takes a few moments to explore some stats you may not have known about immigrants, and hopefully brings a little clarity to the issue.
38
In My Neighborhood: Wellesley, Boston, Massachusetts AREAA Treasurer and 2019 National President Tom Truong takes us through his favorite neighborhood of Boston to explain what makes it so special.
40
Tips for Capturing a Piece of the Housing Boom Now is an exciting time to be in real estate, whether as an agent, an investor, or a potential buyer/seller. But with hot markets across the nation, how can you get the best leverage toward purchasing a new piece of real estate? Psst – ever heard of Private Mortgage Insurance? By MJ Watkins
D E PA RT M E N T S 10
22
Letter from the Editor
AREAA Global
www.areaaglobal.com
Page 44
AREAA Executive Director Hope Atuel reflects on the myriad contributions of immigrants to our country.
AREAA National Convention
www.areaa.org/convention
Page 12
Bank of America
www.bankofamerica.com/neighborhoodlending
Bank of America
bankofamerica.com/affordableloansolution
Page 19
Bay Area Off Market Properties
BayAreaOffMarketProperties.com
Page 17
Chase
edgar.s.david@chase.com
Page 11
Gina Duncan, Fine Island Properties
www.FineIslandProperties.com
Page 17
HSBC
800.622.7759
Page 9
National Association of REALTORS® Global
www.realtor.org/global
Page 3
RE/MAX
theremaxcollection.com
Page 13
RISMedia
ace.rismedia.com
Page 13
Wells Fargo Home Mortgage
diversesegments@wellsfargo.com
Ask Mehta AREAA’s resident real estate guru Rob Mehta takes another reader question in his quarterly article. This time, Rob dives deep into how you can capitalize on your market’s international appeal (and how to create that appeal!).
26
The Commercial Brief: Miami After wrapping up the Global and Luxury Summit in Miami, AREAA Commercial Network Vice-Chair and AREAA Global Board Member Kurt Nishimura gives his take on what makes the Magic City the right city at the right time for global investment.
42
ADVERTISERS
Page 2
Bohemian Vagabond Our resident globetrotter Jacki Ueng is at it again, this time on the beautiful Island of Catalina just off the coast of Southern California. The best part of this trip, as opposed to her many others across the world, is that this one is a quick little ferry ride from LA. If you’re coming to our National Convention in San Diego this September, you might want to take note.
Page 5
Contact us to find out about ADVERTISING OPPORTUNITIES:
ads@areaa.org SUMMER 2017
7
SUMMER 2017 Vo l u m e 9, I s s u e 2
ED ITOR Scott Berman
D ESIG NERS Jazz Miranda Paul Louly Praveen Sharma
is a publication of the Asian Real Estate Association of America (AREAA), a national nonprofit trade organization dedicated to increasing sustainable homeownership in the Asian American community. For more information visit: http://areaa.org. Š2017 by the Asian Real Estate Association of America. Reproduction in whole or part without permission is prohibited. Opinions expressed by individual authors are not necessarily the opinions held by AREAA. Interested in advertising or contributing? Contact us: ADVERTISING | ads@areaa.org EDITORIAL | Scott Berman sberman@areaa.org Office: Asian Real Estate Association of America 3990 Old Town Avenue #C304 San Diego, California 92110 619.795.7873 Phone contact@areaa.org Previous issues available online at: http://areaa.org/a-r-e
For additional web-based content, please visit: www.areaa.org.
8
SUMMER 2017
FROM THE
Director
We are a nation of immigrants. Our country’s success would simply not be possible without the generations of immigrants who have come to our shores from every corner of the globe.
10
SUMMER 2017
John F. Kennedy in his book “Nation of Immigrants,” penned that “…every American who ever lived, with the exception of one group, was either an immigrant himself or a descendant of immigrants.” We are a nation of immigrants. Our country’s success would simply not be possible without the generations of immigrants who have come to our shores from every corner of the globe. In this issue, you will read important contributions by immigrants who have helped build communities across America that subsequently made our country a powerful of economic engine, the single greatest in the history of the entire world. From railroad workers to pioneering technology that connects us 24/7, immigrants have been on the forefront of this country’s development. In one of my favorite speeches from President Obama, he says, “the lesson of these 236 years is clear – immigration makes America stronger. Immigration makes us more prosperous. And immigration positions America to lead in the 21st century. And
these young men and women are testaments to that. No other nation in the world welcomes so many new arrivals. No other nation constantly renews itself, refreshes itself with the hopes, and the drive, and the optimism, and the dynamism of each new generation of immigrants. You are all one of the reasons that America is exceptional. You’re one of the reasons why, even after two centuries, America is always young, always looking to the future, always confident that our greatest days are still to come. We celebrate the contributions of all Americans to building our nation and its economy, including the generations of immigrants.” I could not have said it any better. Here’s to the immigrants who have pioneered the way for us – to make this a powerful nation that is today!
HOPE ATUEL
AREAA Executive Director
WE’LL GIVE YOUR CLIENTS’ PLANS ROOM TO GROW. UP TO .25% RATE DISCOUNT FOR CHASE PRIVATE CLIENTS • FINANCING UP TO 85% OF HOME VALUE • LOANS UP TO $3 MILLION We finance big dreams, but we also pay attention to the finest details along the way. From priority processing to relationship pricing, our home lending experts offer personalized help every step of the way. Contact me today about working together to help your clients:
Edgar David Region Manager Phone: 909-608-2216 edgar.s.david@chase.com Mortgage rate discount of 0.125% for total deposits and investments of $500,000 – $999,999.99 or 0.25% for $1,000,000.00. For purchase and refinance transactions, these discounts apply to the full spectrum of residential mortgage types, including fixed- and adjustable-rate products for jumbo and conforming mortgages. For fixed-rate mortgages the Mortgage Rate Program discount is for the life of the loan, and until the first adjustment on adjustable-rate mortgages. For real estate and lending professionals only and not for distribution to consumers. This document is not an advertisement for consumer credit as defined in 12 CFR 1026.2(a)(2). Loans up to 85% of a primary home’s value are available on a purchase or refinance with no cash back. Subject to property type, a minimum credit score of 680 and a minimum of 18-24 months of reserves, depending on loan size. (i.e. customer must have at least enough money in reserve in a bank account to make 18-24 monthly mortgage payments [principal, interest, taxes and insurance] after the loan closes). All home lending products are subject to credit and property approval. Rates, program terms and
AREAA’S FINEST CONVENTION COMES to AMERICA’S FINEST CITY
Manchester Grand Hyatt | September 28 - 30, 2017
For more information visit areaa.org/convention
Your new pied-à-terre is calling. Find it with a professional who has an affinity for matching successful clients with incredible properties. That’s the sign of an agent with The RE/MAX Collection®
© 2017 RE/MAX, LLC. All rights reserved. Each office independently owned and operated. 17_149489
theremaxcollection.com
The Four Seasons Hotel Miami, in the Brickell District, is the height of luxury
AREAA
2017
MIAMI
R EC
AP
This past April, AREAA’s top luxury and international members from around the world descended upon the jewel of South Florida, Miami, for the largest AAPI real estate event in the region’s history. We’ve put together a small compilation of our favorite photos from the event for your viewing pleasure. To see the rest of the gallery, go to www.bit.ly/AREAAGLS17 and like our page for more!
From Left to Right: Summit Co-Chair and Cervera Real Estate’s Jesse Ottley (AREAA Miami), JP Morgan Chase’s Anthony Chan, Mario Garnero of Brasilinvest, and Jose Rasco of HSBC headlined the powerful Exploring Global Capital Flows session 14
SUMMER 2017
2017 Presidentelect Randy Char and Chairman Emeritus Jim Park showing off a little swagger
From left to right: AREAA Policy Strategist Scott Berman, Political Consultant Irene Bueno, Scott Saunders of Asset Preservation, and National Association of REALTORS® Vijay Yadlapati discuss some of the major policy issues facing today’s real estate market
The view from the directory reception in the Brickell area of Miami
- The Grand Ballroom was at capacity for the Opening General Session on Exploring Global Capital Flows
Attendees packed in the Miami Room for the “Understanding High Net Worth Individuals” breakout session SUMMER 2017
15
- Scenes from the Luxury Developers Panel
Having a little fun in the sun during a poolside networking event sponsored by RE/MAX & HSBC. Can you spot yourself in this picture?
The cigar rolling team during the Miami Night Out networking event
AREAA 2019 President Tom Truong interviews AAPI actor and civil servant Kal Penn. Kal is currently in the hit ABC series Designated Survivor with Kiefer Sutherland; he also served as Associate Director of Public Engagement under the Obama Administration.
To close out the Summit, AREAA National President Angie Lee presents two one of a kind paintings from local Miami artist Peter Tunney to our event CoChairs Jesse Ottley of Cevera Real Estate and President and CEO of Coldwell Banker Charlie Young.
16
SUMMER 2017
Your
Hawaii Connection
GINA DUNCAN RB-21124
REALTOR®, Principal Broker/Owner ABR, CRS, e-Pro, GRI, RSPS, SFR Direct: 808-250-9858 | MauiGina@gmail.com 275 W Kaahumanu Ave #2CA1 | Kahului, HI 96732
Co-Founder Chapter President 2016-2017
www.FineIslandProperties.com
TO STAY C U R R E N T AND ACCESS
areaanational
EXCLUSIVE DISCOUNTS, FOLLOW AREAA!
@areaa
Discounted Properties Available! For Qualified Cash Buyers Deep discount And Fast Closing For Cash Buyers. Principals Only! Brokers Not Protected!
/areaa.national www.areaa.org
For details register here:
bayareaoffmarketproperties.com
CONTACT US to find out about ADVERTISING OPPORTUNITIES
Rates beginning at $188/issue
ads@areaa.org SUMMER 2017
17
1031 Tax-Deferred Exchange: Understand the Power of Like-Kind Exchange By Brenda Muller
Business owners and real estate investors who understand the benefits of a 1031 likekind exchange can acquire better performing properties and defer paying capital gain taxes. Since 1921, IRC Section 1031 allows business owners and investment property owners to defer capital gain taxes when virtually any property held for investment or used in a business is exchanged for other “like-kind” property. Taxes which would otherwise be due in a taxable sale are deferred until property is sold for cash at a
Revenue Procedure 2008-16 is considered held for investment. Many types of personal property such as artwork, collectible coins, trailers, agricultural and construction equipment, trucks, collectible cars, and aircraft used in a business can also be exchanged for other likekind or like-class personal property. The most common exchange variation is the delayed exchange. In a delayed exchange, prior to closing on the sale of the relinquished property,
Essentially, a 1031 exchange provides business owners and real estate investors an interest-free loan that can be used over and over to exchange into better performing investment properties and build significant equity. For full tax deferral, an investor must generally meet two requirements: (1) reinvest the net equity; and, (2) incur the same or greater amount of debt. Investors can opt for full or partial tax deferral and any proceeds received are called “cash boot” and a reduction in mortgage liabilities not offset with the addition of new cash is called “mortgage boot.” 18
SUMMER 2017
later time. Essentially, a 1031 exchange provides business owners and real estate investors an interest-free loan that can be used over and over to exchange into better performing investment properties and build significant equity. Via a 1031 exchange, business owners and investors can defer up to four levels of taxation including depreciation recapture at 25%, federal capital gains at 15%/20%, applicable state taxes, and the 3.8% 1411 Net Investment Income Tax, when applicable. The definition of “like-kind” is very broad for real property and includes land, single family rentals, commercial and retail, multifamily, farms/ranches, and virtually any type of real property held for investment. In addition, conservation easements, agricultural easements and perpetual communication easements (cell towers) mineral rights, certain oil/gas offerings are generally considered real property and qualify for 1031 exchange tax deferral. One restriction is that only U.S. property can be exchanged for U.S. property. An investor that owns a vacation home that meets the parameters of the safe harbor provisions of
the investor engages a qualified intermediary (“QI”) who will facilitate the exchange. The QI, in addition to preparing the necessary exchange documents and safeguarding the proceeds, provides an important role guiding all parties through the exchange process. The QI, through an assignment of the sale contract, sells the relinquished property to the buyer and instructs the closing officer to directly deed the property to the buyer. The QI then receives the sale proceeds and holds these funds subject to certain restrictions. After this closing, the investor has 45 calendar days to identify replacement property (the “Identification Period”) and a maximum of 180 calendar days to close on the purchase of replacement property (the “Exchange Period”). The QI then, through an assignment of the purchase contract, purchases the replacement property from the seller and instructs the closing officer to directly deed the replacement property to the investor. Savvy business owners and investors should consider using 1031 exchanges to expand their businesses or acquire better performing investment properties while deferring capital gain taxes.
BRENDA MULLER is a Division Manager with Asset Preservation, Inc, (apiexchange.com), a leading national qualified intermediary with an office in Fort Lauderdale, Florida. Questions can be directed to her at Brenda@apiexchange.com or 844-252-1031.
AREAA Goes (Went) to Washington, D.C.
1 1. Senator Cory Booker (D-NJ) snaps a quick selfie with Policy Committee Vice Chair Dawn Lin and AREAA Metro DC President Moon Choi before the annual APAICS Gala 2. Each May, in conjunction with AAPI Heritage Month, AREAA members from around the country come to Capitol Hill to meet with our elected representatives and relevant housing agencies to promote policies to secure and increase AAPI homeownership
20
SUMMER 2017
This past May, AREAA’s Policy Committee headed by Don Choi (Boston) and Dawn Lin (Houston) led over 150 of our members to Washington DC to be the voice of the AAPI community in real estate. Armed with our Three Point Policy Plan to Boost AAPI Homeownership, AREAA members from across the country sat down face to face with our elected representatives to discuss the issues facing our community.
This year’s Three Point Plan focused on 1) Student Debt Reform and the elimination of the so-called “1%” rule 2) Alternative Credit Scoring Systems that will help score more AAPI; and 3) The inclusion of a Preferred Language Data Field on the Uniform Residential Loan Application (URLA).
4 If you want to get more involved with the Policy side of AREAA, please contact Scott Berman: sberman@areaa.org
5
3. Members from AREAA’s Florida Chapters outside the office of Rep. Charlie Crist (D-FL) 4. AREAA members meet with Consumer Finance Protection Bureau Director Richard Cordray
6 2
7
5. Rep. Ed Royce (R-CA) meets with AREAA Orange County members 6. Getting ready for the APAICS Gala at the Washington Hilton. The annual ball and fundraiser has had keynote speakers such as Judy Chu, Cory Booker, and Barack Obama. It’s a one of a kind event that everyone should attend at least once! 7. Rep. Judy Chu (D-CA) came to encourage AREAA policy attendees to keep up the hard work and fight for AAPI housing issues
3
8
8. Longtime AREAA ally Rep. Al Green (D-TX) meets with members of AREAA’s Houston Chapter
SUMMER 2017
21
EDITOR'S NOTE - Tech Talk with Rob Mehta has received a bit of a makeover. We've decided to open our resident guru up for a questions asked by you, the reader! If you have a question you would like Rob to answer, simply email it to Editor@areaa.org and then check the next issue to see if your question was chosen!
QUESTION: I want to tap into my market’s international appeal, but I don’t know where to start. How do I identify international buyers in my marketplace? Asked by: Thomas / Los Angeles, CA So, as our dedicated readers will likely recall, we previously discussed how technological advances have made marketing to international buyers easier when we spoke about VR and maximizing your audience… for those of you who attended the AREAA Miami Global Luxury Summit in April, you may have heard me discuss the advantages of being able to identify the origins of your international buyers – and then market directly to them. Now you might be asking – Does Rob have a crystal ball? A magic wand? What sort of hocus-pocus is he performing in order to get these answers? 22
SUMMER 2017
Well my Esteemed Readers, I’m sad to say that there is no magic wand. No crystal ball, either. However, there is hard evidence – and that evidence shows that foreign buyers tend to flock to places where, wait for it, OTHER buyers from the same country (area, locale, etc.) already are. So, you could go for the hard sell, and identify a market where a particularly nationality isn’t already buying, and then try to sell the idea of buying in that market to them, OR, you could target your marketing dollars at a country whose nationals have already an historic interest in the particular region you happen to do business in.
"25% of ALL leads on foreign residential buyers come from personal contacts, and 22% come from referrals from past clients"
Many international buyers are making their purchases in cash - but there are lenders that will still offer mortgages to foreign buyers According to NAR, buyers into the Southwest United States tend to come from Mexico, while Asians are the largest group of international buyers in California. Europeans tend to purchase in the Eastern United states, while Florida, with the largest number of international buyers of any state, tends to see a significant number of Canadians and Brazilians. Overall in 2016, foreign buyers were predominantly from China, representing roughly 28% of all foreign buyers; Canada, India, Mexico and the UK completed the top 5 of international buyers. If you work one of the markets above, have you started to “fish upstream” for your next buyer? Many international buyers are making their purchases in cash, and that’s just the reality, but did you know that there are lenders that will offer mortgages to foreign buyers if they make a down-payment of at least 30%? If you didn’t know that, just think of how many of your international contacts might not be aware of the leverage they might have utilizing financing?
Also, your goal should be to become a resource to these buyers, not just with real estate, but a resource in general as to other needs they might have. Your valubility to this client base will go way up if you can look beyond just the sale of the property. Now that you know where the majority of international buyers in the United States are coming from, it's time to harvest your Client Relationship Manager (check out mycontactually.com if you don’t have one). Reach out to agents that you know are working in those markets and start the discussion - do your own road/tradeshow, list your properties on websites that have an international audience, and focus on reaching these clients where they currently reside. Physically GO and talk to Realtors working those local markets and enlist their help and attracting foreign buyers, often it's just a matter of not having someone on this end to contact (And you needed a little vacation anyway, right?) BE THEIR CONTACT POINT! The agents
you know have clients that are looking for beachfront investment opportunities, mountain ski homes, a city pied-à-terre close to certain educational institutions, etc. so start sending them property information that they can send to their clients. Alternatively, reach out to your past clients, they already know that you're the expert in your market - now enlist them to spread the word amongst their contacts - if they know someone overseas have them assist you in getting in touch! 25% of ALL leads on foreign residential buyers come from personal contacts, and 22% come from referrals from past clients! If you don’t have contacts in those markets, that's ok, consider investing in an SEO. Studies have shown that SEO’s have compounding returns over time because all your content and links are permanent, translating to a greater visibility as the SEO strategy continues. Until next time, Rob
Rob Mehta is the owner of Rob Mehta+Partners, and specializes in education and consulting with a focus on business development, brokerage operations, marketing, agent recruiting and retention, and international development. He has served as President of the Minnesota Association of REALTORS, Director for both AREAA and NAR's Young Professionals Network and a member of AREAA's inaugural "A-List." www.robmehtapartners.com SUMMER 2017
23
The Mysterious Asian Homeownership Gap By Mark Fleming, Ph.D., Chief Economist, First American Financial Corporation
Homeownership is a goal shared among all people, regardless of race or ethnicity. It is one of the underlying tenants of the “American Dream,” and rightfully so, as it remains the main driver of wealth creation for the majority of households in the United States. That’s why the 2017 Census report, which shows a 15 percent gap between Non-Hispanic White (71.8 percent) and Asian (56.8 percent) homeownership rates, is confounding. According to Census data, the nation’s Asian population increased 3.4 percent between 2014 and 2015. As Asian-American and other non-white ethnicities have increased in population size, understanding the differences in homeownership rates and their ties to economic and demographic factors has been the focus of more research and discussion. 24
SUMMER 2017
Differences in homeownership rates can be attributed to many household characteristics, making it difficult to make broad conclusions. For example, a lower homeownership rate in an ethnic group may, in part, be the result of economic, demographic or educational factors that are causally related to homeownership, but only correlated with ethnicity. To overcome this dilemma, economists use a multi-dimensional analysis of relationships “ceteris paribus” – or all other things being equal.
Apples to Apples? When comparing the homeownership rate of Asian households to Non-Hispanic White households, it’s helpful to first consider the differences in household characteristics, such as educational attainment. Greater achievement in
education is an important indicator of future homeownership, as it is indicative of the potential for higher income. The percentage of Asians with a Bachelor’s degree or higher is 60 percent, compared with 38 percent of Whites, 22.8 percent of African Americans, and 16.6 percent of Hispanics. Asians had the highest increase, 5 percent, in educational attainment of all ethnicities between 2011 and 2016. The benefit of educational attainment is clear, as Asians also have the highest median incomes of all ethnicities. In 2016, the median household income of Asians was $76,000, followed by Non-Hispanic White households ($63,000), Hispanic households ($44,000), and African American households ($35,000). These two indicators, all other factors being equal, should point to a higher
Shutterstock.com / Watchara Ritjan
“After accounting for all the different factors that could influence the homeownership decision, the gap between Asians and Non-Hispanic Whites is 9 percent.” homeownership rate for AsianAmerican households than NonHispanic White households. But the decision to be a homeowner is not only based on a household’s educational and financial position. The decisions to marry and have children are also influential. The marriage rate is highest for Asian households (64 percent), followed by Non-Hispanic White (52 percent), Hispanic (50 percent), and African-American (29.2 percent) households. NonHispanic White households tend to have more children per household than Asian households, however, this may be partially explained by the fact that the Asian population is also younger on average.
What’s the Prognosis? After accounting for all the different factors that could influence the homeownership decision, the homeownership gap between Asians and NonHispanic Whites is 9.6 percent. This is 5.4 percentage points less than the 14 percent gap in homeownership rates found in the Census data, which is not adjusted for differences in household characteristics. Yet, a significant, unexplained gap in homeownership remains, even after controlling for age, marital status, the number of children in the household, education, income and the impact of economic conditions. Herein lies the mystery. Asian households have higher educational attainment rates, higher incomes, and are more likely to be married, which are all indicative of higher homeownership rates. So, why does a gap exist? Will it close as more Asian households make the decision to have children? It will be interesting to see what happens, but all the signs point to a bright future for Asian homeownership as educational attainment, household income and family formation continue to rise.
Homeownership Rate All Else Equal
“The industry must continue to put a spotlight on the persistent homeownership gap facing minority communities. This type of analysis ensures that we have fact-based dialogues and constructive initiatives to truly close the homeownership and wealth gap. As Dr. Fleming indicates, the variations in social economic conditions alone does not explain the wide gap facing the minority community. Those ‘unexplainable’ gaps must be tackled together to ensure broad access to mortgage lending and homeownership in America.”
Sources: "Quarterly Residential Vacancies and Homeownership." (n.d.): n. pag. The U.S. Census Bureau, 27 Apr. 2017. Web. HOLLAND, JESSE J. "Asians Remain Fastest-growing Racial Group in US." AP News. Associated Press, 23 June 2016. Web. 23 May 2017. SUMMER 2017
25
The Next U.S. Global Gateway? By Kurt Nishimura What makes a city a Global Gateway city? When you think of the United States, most immediately think of New York City and San Francisco because they have large foreign populations and International Airports with direct flights to large cities on all the major continents. In earlier decades when air travel was less prevalent having a major seaport was also a qualifier. Ten years ago, on my first trip to Miami, it was readily apparent Miami was the main U.S. city to South and Central America. I stayed in South Beach and the influence of South and Central America was obvious with the restaurants, bars and hotels all incorporating many elements of 26
SUMMER 2017
style, fashion, and architecture from the influx of people migrating to the area. It was exciting to see new life breathed into the area making what was old new again. The Delano, the Tides, the Raleigh, the Betsy and the National were all hotels built prior to the end of World War II and had to be refashioned into places to see and be seen in the heart of South Beach. The allure of South Beach not only attracted the rich and famous from various parts of the United States, but it also became the playground to the rich in South and Central America. Many developers from Central and South America took notice and started building offices in Miami
In Miami, like many U.S. real estate markets in the mid-2000s, supply outpaced demand and the area was hit hard during the Great Recession. to appeal to the demand of foreign investors who wanted something in the U.S. where the local flavor, and in many cases the language, catered to foreigners. In Miami, like many U.S. real estate markets in the mid2000s, supply outpaced demand and the area was hit hard during the Great Recession. Although the area
Most of the foreign investment early on was focused on the Miami Beach, and the downtown of Miami on the mainland was largely ignored. For years, like many US downtown cities, workers would leave the downtown area after work to go to their nearby suburban homes. The downtown area would be void of activity with most shops and restaurants closing soon after the work day ended. The first glimmer of activity started with Brickell Avenue and grew from there. Condominiums and office buildings and an influx of international banks came in giving the city the largest concentration of foreign banks in the United States outside of Manhattan. This has pushed the city past the tipping point where it’s truly becoming not only a gateway to the US from Central and South America, but to the entire world. The Miami World Center, a 27 acres $2 billion project, is breaking ground in 2017, and Brickell City Centre features over 500K sqft. of retail with office, hotel,
and residential condominiums. The city’s Downtown Development Authority published there are 1300 new rental condominium units coming online. Several other projects are on the board, and it is estimated an additional 1.4 million square of retail will be added in the next 3-5 years.
programs and trade missions have been set up with the goal of securing strong ties to Asia. In 2016, the first non-stop flight from Miami occurred which did not result in direct service yet but has started the conversation with many carriers. Cathay Pacific was in talks with Airbus to create a new version of the Airbus A350
The first glimmer of activity started with Brickell Avenue and grew from there. Condominiums and office buildings and an influx of international banks came in giving the city the largest concentration of foreign banks in the United States outside of Manhattan. Miami is seeking investment from Asia. The city has seen what could be done already from foreign investment from South and Central America, so reaching out to the other side of the world doesn’t seem like much of a stretch. The county and the City of Miami have been pushing for nonstop flight service to China in order to promote the EB-5 Visa investment program, and outreach Shutterstock.com / Fotoluminate LLC
Shutterstock.com / Felix Mizioznikov
was hit hard, it was only a matter of time when the excess inventory would shrink to levels that new development was needed.
which would allow direct flight from Miami to Hong Kong. AREAA Global, the for-profit entity 100% owned by the non-profit Asian Real Estate Association of America, hosts many trade missions for its members see what Miami has to offer with its Explore Miami Tours, and AREAA made Miami the host city for its annual Global and Luxury Summit this past April (which was the largest Asian focused event in the city’s history). I was one of many members for AREAA that attended the Global Summit and I have to say I walked away very impressed from what I saw 10 years earlier. The city has transformed itself to truly a world class global gateway city in every way. I look forward to seeing how Miami develops in the next 10 years as it truly is one of the most unique multicultural cities in the United States.
SUMMER 2017
27
No matter if you are talking with a member of the growing AAPI market, the millennial market or any first-time homebuyer, everyone is worried about having enough money for their down payment. And rightly so, even with a savings capacity of $500 a month and a goal of 5% down on a $300,000 home it would take 2 ½ years to save $15,000. Buying a home is always about assessing risk vs reward; buy today with a lower down payment or buy later with more money down? These issues must be thoughtfully considered, as we all want sustainable homeownership. If a client decides now is the right time, but they lack funding, there are down payment assistance programs and affordable first mortgage financing available to make it work. Each state housing finance agency provides first mortgage financing and many provide a grant, forgivable loan or soft second mortgage for down payment assistance. 28
SUMMER 2017
"Buying a home is always about assessing risk vs reward; buy today with a lower down payment or buy later with more money down?" It can be hard to understand how these programs work, but for the most part, the first mortgage is standard conventional, FHA or VA loan. The assistance can come in different forms and knowing the differences, even if you don’t know the details, will allow you to confidently ask the right questions and find out if your buyer will benefit.
By Dottie Sheppick, Specialty Mortgage Product Solutions, LLC
The Options: A grant may be provided by a government agency, nonprofit or employer. The funds are dispersed at closing, with no security instrument and payback is not required. Second mortgages can have widely varying payback structures. A forgivable second mortgage can have different terms. Many are forgiven over five years, at a rate of 20% each year and others are forgiven at the end of 30 years or the end of the mortgage term. If your buyer can take advantage of a loan that is forgiven, they should talk with their accountant about how the forgiven amount may impact their tax liability. Soft seconds can also be structured with varying payback provisions. Some are interest bearing and have payments that begin immediately, but others defer payments for a period of 5 years or more. One benefit of payments deferred for five years is that most
lenders will not have to calculate the second mortgage payment in the qualifying ratios. Silent seconds are secured with a note and deed, but payment is deferred until resale, refinance or transfer of title. Finally, some second mortgages require that a share of appreciation is paid to the assistance provider. For example, if a city is willing to provide 5% of the down payment, the home buyer may have to pay the city 5% of their equity at time of sale. Simply put, if the city provides 5% of the down payment on a $200,000 home for $10,000 and the home sells in ten years for $240,000, the amount due to the city is $12,000. Grants and affordable seconds are just one way to help your borrower fund the required down payment. Call your city, county and state housing department or check their websites to see what is available. SUMMER 2017
29
8 Things You Should Know
1. Growing Strong
4. Achieving the Dream
There are an estimated 43.6 million foreign born people living in the United States. The number of foreign born individuals living in the US has more than quadrupled since 1965, and is expected to top 78 million by 2065.
Just over 50% of the foreign born population in the US own their homes. In fact, from 19942015, immigrant homeownership rose 2.3% while US-born homeownership remained stagnant. Professor Jacob Vigdor of the University of Washington, who has done extensive studies on immigrant contributions to the economy, estimates that immigrants will contribute $3.7 Trillion to the US housing market
2. Diversity from Within Today’s immigrants come from a much more diverse geography than in previous decades. In 1960, 75% of the immigrant community came from Europe, compared to just 11% today. China, India, and Mexico are now the three main sources of immigrants to the US.
about
IMMIGRATION
3. Spreading Their Wings
"Immigrant homeownership rose 2.3% while US born...remained stagnant."
Shutterstock.com / Torgado
SUMMER 2017
Shutterstock.com / michaeljung
30
Shutterstock.com / Daniel M Ernst
Shutterstock.com / Diego Cervo
Immigrants are now moving further and further into the heartland, and not necessarily staying in the “Gateway Cities” of the past – New York, San Francisco, and Los Angeles. The South in particular has seen a dramatic uptick in its foreign born population, with a 60% increase from 2000-2014, accounting for nearly 47% of the overall change to the US population during this time.
5. Upward Mobility
6. Capital Injection
Compared to all Americans, US-born children of immigrants are more likely to go to college, less likely to live in poverty, and equally as likely to own a home. 36% of adult US-born children of immigrants are college graduates – 5% above the US average, 11% live in poverty, less than the 13% US average, and 64% own a home, 1% below the US average.
In 2016 alone, immigrants contributed $2 Trillion to the US economy. Immigrants are overrepresented in the labor force, and also contribute to through entrepreneurship and innovation. In 2010, more than 40% of Fortune 500 companies were founded by immigrants or their children.
8. The Future of Our Economy As the baby boomer generation enters retirement age, immigration will be critical to maintaining and promoting growth in the labor market. From 2020 to 2030, 7 million US born individuals will leave the labor force; during this same time an estimated 2 million immigrants and 6.9 million of their children will enter the labor force. From 2015 to 2065, immigrants and their descendants are expected to account for 88 percent of U.S. population growth, making them critical to replacing lost labor and production.
The net economic impact of immigration in the long run is positive. From 2011 to 2013, children of immigrants contributed $1700 to state and local budgets, and their children another $1300. There’s a net $900 contribution across the first three generations of immigrants. From 1994 to 2007, immigration also helped increase the average wage of US born individuals by $3.68 per week.
60% increase in foreign born population from 2000-2014 in the South. Nearly 47% of the overall change to the population
Shutterstock.com / Odua Images
during this time.
Shutterstock.com / TAJR_photo
Shutterstock.com / De Visu
Immigrants contributed 2 Trillion to the US Economy in 2016
Shutterstock.com / Rawpixel.com
7. Good for Everyone
China, India, and Mexico are now the three main sources of immigrants to the US.
SUMMER 2017
31
By JACKI UENG
I
remember growing up in the San Gabriel Valley (SGV) in the 80s until I left for college in 2002. My memories began in Rosemead where my parents arrived years before my birth (separately) from Taiwan. We lived there until I was five years old and then we transitioned 10 miles east to Hacienda Heights for the remainder of my childhood and teen years. “Why Hacienda Heights?” I asked my parents, and the only response I got was that it was a safe, residential, affordable area close to one of the largest Buddhist temples in America, Hsi-Lai temple, where I would later attend every Saturday for Chinese school. While it’s tough to get clear, concise
answers from many of our immigrant parents, it is always interesting to try to understand. Truth be told, there weren’t as many options for them as there is for us today, on where to live or move. With language barriers, lack of resources, income and discrimination, it was easiest for minorities to live within neighborhoods that still felt somewhat like their home country, where markets and restaurants catered to their tastes and needs. My parents had hopes and plans to assimilate as they bettered their English
in local Adult Schools and began to watch American television. While they spoke only Mandarin to me at home, they wanted me to get straight A’s and put me through tutoring classes so that I could go to a good college and have a better life than they had. Retaining culture while trying to assimilate is a constant struggle among many immigrants. Choices of how much assimilation vary from individual to individual, family to family. In the San Gabriel Valley,
mini-versions of Asian and Hispanic countries were built among shopping centers and stand-alone restaurants. Back then, and still today, is where you will find the most authentic ethnic food. Back then, the “SGV” as we would call it was not the ‘hip, cool’ area that Jonathan Gold and Clarissa Wei write about in their restaurant reviews revered by ‘foodies’ as the ‘go-to’ spots for authenticity. Nor were there high-end shopping malls or centers outside of Santa Anita Mall, which at
"With language barriers, lack of resources, income and discrimination, it was easiest for minorities to live within neighborhoods that still felt somewhat like their home country, where markets and restaurants catered to their tastes and needs."
the time was seen as high-end. SGV in the 1980s was a hodgepodge of Hispanic and Asian immigrants who resided in an affordable area to rent, and some eventually saved enough to purchase. This was more reasonable and affordable real estate as it is located east of the more expensive
"Retaining culture while trying to assimilate is a constant struggle among many immigrants. " the ‘Westside’ or ‘Valley’. The school districts in SGV soon became some of the most competitive and highest ranked schools in the nation once the influx of Asian immigrants began. Growing up as an immigrant, many of us in America feel out of place - even if we made up the majority in our town. It did, however, make things a bit easier to grow up with such diversity, although packing our native food for school lunch was still taboo and often subjected one to being bullied. I remember dozens of gangs among the Asians and Hispanics,
and surprisingly a lot of Asian on Asian violence in the 90s. When I asked a friend recently his thoughts on that, he reflected that many teenagers joined gangs for a ‘sense of belonging’. Belonging because their immigrant parents were not necessarily available physically to show and nurture them with the ‘love’ the head gang members or ‘dailo’ (big brother) fabricated. Frankly, the immigrant parents did the best they could to get by, working multiple jobs to put food on the table, and to push their kids to receive Straight A’s so that they would not have to suffer as they did. By the time my sister went to high school after 2000, most of those gangs had dissipated. The later millennial immigrants grew up in a different generation where their parents had become more established and present in their lives. Who would have thought that just a quick 25 years later, it’s considered ‘hip’ to head to SGV and eat at a ‘Kogi truck’ which revolutionized Food Trucks, as well as trendy Asian Street food with events like the ‘626 night market’ packed and sold out? Who would have thought that Caucasians and other non-Asians would be yelping on their smartphones to find
"Growing up as an immigra up the majority in our tow diversity, although packing subjected one to being bu
From the early days of a modest, middle-class area where immigrants flocked for inexpensive housing to the flourishing real estate and retail, to a region that is now considered ‘hip’, where foodies drive for miles for authentic cuisines and international investors overbid properties.
San Gabriel Timeline
1769
1771
First Europeans pass through in the Spanish Portola Expedition.
Mission San Gabriel established. The entire valley eventually becomes missioncontrolled ranch and agricultural land. Native tribes are absorbed into the mission system.
1774
1942 - 1944
First Europeans reach the valley from the east, an expedition led by Juan Bautista de Anza.
Japanese American citizens were sent to a Japanese internment camp at Santa Anita Park during World War II, with up to 17,000 people living in horse stables.
Chinese Fishermen.Digital image. Read Tiger. Monday 26 June 2017. <readtiger.com>
ant, many of us in America feel out of place - even if we made wn. It did, however, make things a bit easier to grow up with such g our native food for school lunch was still taboo and often ullied."
1940s - 1950s
San Gabriel Valley changes from acres of farmland to suburban bedroom community.
1957 San Bernardino Freeway (Interstate 10) opens.
Late 1960s
Chicano Movement protests by local Mexican Americans in El Monte.
1970s - 1980s 1980s - Present
Taiwanese immigrants began settling in Monterey Park and its neighborhoods.
present Chinese and Hong Kong immigrants began to settle in Alhambra, Arcadia, El Monte, Monterey Park, Rosemead, and San Gabriel.
the most ‘authentic’ Asian food outside of PF Changs & Chin Chin? The fact that just 8 years ago, people were willing to drive to Arcadia for ‘Ding Tai Fung’ or ‘Newport Seafood’ means that change was happening ( for the better) in this area. Most immigrants who came to the US, with some having college degrees, had a very tough time finding corporate or ‘traditional’ jobs due to language barriers and discrimination. Initially, they had to take the jobs no one wanted. Some began in jobs like dishwashing, and with their hard work and determination, rose up to waiters/ waitresses, managers and then eventually began owning their own restaurants. Many others went into selfemployed businesses as well such as selling life insurance, real estate, escrow, or import/export out of Asia. Today, the economy in SGV is thriving and it’s in no small part due to immigration. Because of the hard work of the immigrant generations before us, the San Gabriel Valley went from being an economically depressed region, to one that’s culturally diverse, with hip restaurants and bars, high end shopping, and affluent neighborhoods. The story of SGV isn’t necessarily unique, either, as across the country immigrants have transformed neighborhoods and brought new life (and money) to blighted or decaying areas and completely rejuvenated them. That’s the story of immigration that doesn’t get told as much these days. That’s how immigrants have done their part to make America great.
Taipei Center. Digital image. CCHP. 29 June 2016. Monday 26 June 2017. <www.cchp.us>
Restaurant Life One of the defining features of the San Gabriel Valley is the abundance of authentic ethnic restaurants serving cuisines from all over the world. For many immigrants, it was common trend was to open restaurants as “homestyle” food was in high demand. Competition was and is still fierce, but the families scrape together every penny in order to put their kids through the best education and tutoring courses, pushing for better opportunities for the next generation. There have also been international chains that have also invested in opening businesses in SGV as they know how much people value their food here. 36
SUMMER 2017
Tasty Noodle House. Digital image. Amateur Gourmet. 06 August 2012. Monday 26 June 2017. <amateurgourmet.com>
Restaurants from Asia to SGV Din Tai Fung is one of those Restaurant/Business success stories with its roots in Taiwan, and its most popular location is in Arcadia. It’s now expanded throughout Southern California to Glendale, Costa Mesa, and across the world in Japan, Singapore, South Korea, Australia, Indonesia, Malaysia, China, and Thailand.
"The fact that just 8 years ago, people were willing to drive to Arcadia for ‘Ding Tai Fung’ or ‘Newport Seafood’ means that change was happening (for the better) in this area."
Yakiyan is a ‘yakiniku’ restaurant with its roots in Taipei. It opened in Hacienda Heights in the past year, and collaborated with the Panda Group (of Panda Express fame) in the expansion. Another massive immigrant story, Andrew Cherng, owner of Panda Express who came here as a student in 1966, opened his first restaurant ‘Panda Inn’ in 1973, and then in 1983 opened his first Panda Express. By 1993, he had opened over 100 stores, and today has transformed it into a billion dollar enterprise, still privately held. The chain has become one of the biggest Chinese American family owned fast food chains in the United States. And he didn’t stop with just opening stores around the world, he began to purchase real estate where his restaurants are located – making him one of the largest real estate investors in the world. From one small store with an SBA loan to now owning shopping centers around the world, he’s truly shown how hard work, determination and sophistication in business strategy can take you a long way.
"The story of SGV isn’t necessarily unique, either, as across the country immigrants have transformed neighborhoods and brought new life (and money) to blighted or decaying areas and completely rejuvenated them. That’s the story of immigration that doesn’t get told as much these days. That’s how immigrants have done their part to make America great."
Boiling Point. Digital image. Eater Los Angeles. Monday 26 June 2017. <la.eater.com>
Beijing Restaurant. Digital image. Eater Los Angeles. Monday 26 June 2017. <la.eater.com>
SUMMER 2017
37
In My Neighborhood
with Tom Truong om
, y e l s e l l We r f s g n i t e e Gr
Massachusetts
Wellesley College Wellesley, Massachussetts
Tom Truong 2017 Boston President 2018 AREAA Vice-President
WHAT ATTRACTED YOU TO THIS PART OF TOWN? Wellesley was first settled in 1660, 357 years ago, and incorporated in 1881. Wellesley offers a sought after combination of prestigious historical homes, offering peaceful New England living with a small town feel (about 28,000 population), while still being accessible to Downtown Boston (15-20 minutes’ drive). Wellesley can be called home to all walks of life because of the diverse culture. Wellesley is a little slice of New England paradise in the middle of the hustle and bustle City of Boston.
The Neighborhood: • Population: 28,000 • 87% College Educated • 5th Highest Median Income in State ($152,159) • 15-20 Minutes to Downtown Boston
Wellesley was first settled in 1660, 357 years ago, and incorporated in 1881. 38
SUMMER 2017
HOUSING: • 90% Homeowners • Avg. Home Price: $1,287,500 (+9.5% year over year) • Avg. Date on Market: 32 Days WHAT’S THE NUMBER ONE SELLING POINT THAT RESIDENTS AND NEW BUYERS RAVE ABOUT? Everyone raves that they are able to own a unique home on a beautiful property, with a yard that they can landscape, barbeque and entertain on. These characteristics may be much harder to find in Downtown Boston. You won’t find too many multi-unit, cookie cutter developments in Wellesley. WHAT’S A COMMON MISCONCEPTION ABOUT THE NEIGHBORHOOD? That real estate prices are much higher than the surrounding areas. This is not true - Wellesley is comparable to other towns which may offer even less to prospective buyers. It’s all about working with the right agent who can find a buyer exactly what they are looking for that fits their budget. WHAT'S ONE OF THE NEIGHBORHOOD’S BEST KEPT SECRETS? Easy access to Boston by very inexpensive public transportation and cheap day parking. WHAT TYPES OF ACTIVITIES/EVENTS DOES YOUR NEIGHBORHOOD OFFER? Wellesley offers town fairs, shopping, restaurants, art, fishing along the Charles River, includes over 3miles of the Boston Marathon, not to mention Babson College and Wellesley College.
WHAT IS YOUR FAVORITE WAY TO SPEND AN AFTERNOON WITH FRIENDS OR FAMILY HERE? Visiting all the college campuses and having a picnic on their lawn. DESCRIBE THE NEIGHBORHOOD COMPOSITION: WHO LIVES THERE? WHAT DO THEY DO? Wellesley has a variety of industry and offers cultural diversity. Of the 28,000 people living in town, almost half of the households have children under the age of 18. The majority of those who live in Wellesley are families seeking superb school systems, access to Boston, and a low crime rate. BEST PLACE FOR A DATE NIGHT? Blue Ginger, Asian Fusion. Have the Black Pepper Lobster with lemongrass fried rice, or Sake-Miso Marinated Sablefish (aka Butterfish), this will melt in your mouth. BEST PLACE TO HAVE A BEER/COCKTAIL? Unfortunately Wellesley is a dry town. There are no liquor stores; but you can grab a cocktail or beer at restaurants such as The Local or Bocado Tapas Wine Bar, BUT only if you order food. BEST BRUNCH / COFFEE SPOT? Maugus Restaurant - local, good ole New England home cooked meals.
BEST KEPT SECRET: "Easy access to Boston by very inexpensive public transporation and cheap day parking"
Photos: Shutterstock.com / Lorna Wu 2 SUMMER 2017
39
P
rospective home buyers who choose to save for a full down payment could be missing a significant opportunity to benefit from a rapidly appreciating real estate market. But there are strategies for getting into the market faster and starting earlier to build equity without sacrificing prudence.
ing r u t p a C Tips for the of a Piece
By MJ Watkins Director Multi-Cultural Business Radian
40
SUMMER 2017
You need money to buy a home, and that usually means borrowing from a bank or mortgage lender. Many believe that they canâ&#x20AC;&#x2122;t purchase a home with a downpayment of less than 20% of the purchase price. According to the National Association of Realtors, for a home valued at the median price of $236,000, that means more than $40,000 for a down payment. According to RealtyTrack, it takes about 12.5 years on average to save for a 20% down payment. But consider how much home prices have recovered in just the past six years since the depths of the housing crisis. Between 2011 and 2017, median home values have increased by about 25%. But thatâ&#x20AC;&#x2122;s just the national average. In places like San Francisco, the median price for a home has skyrocketed from $683,000 in 2011 to $1.2 million today; a rise of more than 75%. Standing on the sidelines while you accumulate a full 20% down payment would not just have prevented you from benefiting from this enormous appreciation, youâ&#x20AC;&#x2122;d be even further behind because the down payment amount would have soared as well. Leveraging the equity appreciation calculator on sites such as AchieveTheDream.com can provide insights on the impact of waiting to save a larger down payment. For example, at a home price of $350,000 and an average appreciation rate of 4%, waiting just 1 year to buy can cost more than $47,000 in equity, 3 years can cost nearly $84,000 and 5 years can potentially have a 6-figure impact at more than $122,000.
This “appreciation trap” has particular relevance for Asian-American and Pacific Islander (AAPI) homebuyers because they tend to save for the full 20%. The counties with some of the largest AAPI populations – Los Angeles, Honolulu, Santa Clara, and San Francisco in California, and Queens in New York – are also among the hottest real estate markets in the United States. Without a prudent way to participate, many people miss out on the greatest opportunities to build value in any of these markets. One solution is private mortgage insurance which allows for a down payment of as low as 3% for qualified borrowers. Most homebuyers do not put down 20% for a conventional loan. In fact, according to Attom Data Solutions, the average down payment is about 6%. Borrowers with a downpayment of less than 20% are typically required to supplement their down payment with insurance. The increasing number of borrowers with downpayments less than 20% helps explain why private mortgage insurance has nearly doubled since 2011 to $760 billion and is continuing to grow by about 20% each year, according to Inside Mortgage Finance. Some sophisticated real estate buyers treat private mortgage insurance as an investment vehicle allowing them to take advantage of rising markets without taking outsized risk. AAPI homebuyers represent the fastest growing segment of the US population, and are projected to remain so through the year 2050. And with above average savings rates these homebuyers also constitute a highly qualified group of borrowers. So, don’t wait to save 20% to claim your stake in the American Dream. Use sound investment strategies supported by products such as private mortgage insurance to buy your first home today.
Between 2011 and 2017, median home values have increased by about 25%. But that’s just the national average. In places like San Francisco, the median price for a home has skyrocketed from $683,000 in 2011 to $1.2 million today; a rise of more than 75%.
Why Private nce Mortgage Insura (PMI) Continues to Grow
++ Private mortgage insurance can be a better deal than an FHA-insured mortgage. ++ In hot real estate markets, an insured mortgage with a low down payment can be a convenient – and perhaps the only – point of entry
SUMMER 2017
41
Island of Romance
By JACKI UENG
Catalina Island is located 22 miles off the coast of Southern California that is a fun getaway for the weekend. Either for pure relaxation, family-fun, eco-fun, romantic weekend or an adventure-filled trip, there is something to do and see for everyone. It takes just an hour boat ride which you can catch from the Long Beach, San Pedro or Dana Point port via Catalina Express. Catalina has 2 main islands: Avalon and Two Harbor. Summers are dry and warm. The ocean water temperature ranges from the low 70s in summer to the low 50s in winter. Avalon is a picturesque harbor where most visitors begin their Catalina Island journey right off the ferry terminal, Cabrillo Mole, unless they arrive by private boat or plane. It is the southern most city in Los Angeles County with approximately 3600 residents tucked into 2.9 square miles of Avalon Canyon. Most visitors will not leave Avalon as the 1 mile stretch along the waterfront from the ferry terminal to Descanso Beach has enough to see and do, although I’d strongly advise you to get out and explore as there are so many more adventures that await outside this area.
42
SUMMER 2017
Catalina Island has been a favorite vacation & hang-out spot by celebrities since the early 1900’s with many famous films filmed on the island. Owned by the Wrigley family with majority share since the early 1990’s, the island is reminiscent of the seaside villages that hug hillsides overlooking the Mediterranean. Our adventure guide said it looks exactly like the village his mother grew up in Italy by the Adriatic Sea but instead of Olive trees, there are Eucalyptus trees that frame the island and wake up all our senses.
Jacki’s Recs
Personal Recommendations for Lodging, Dining, and Fun Where to Stay
Fun fact:
Avalon Hotel – Beautiful view from your rooftop, captivating fountain in the garden patio. Cozy, craftsman style lodging.
Shutterstock.com / Joseph Sohm
Where to Eat Descanso Beach Club – Spend the afternoon laying out at this picturesque beach that reminds you of a private island in Greece while sipping Mojitos and Pina Coladas. This is the place to see and be seen. Shutterstock.com / Okssi
You Can’t Leave Without… Diving is a must where the pristine waters are home to bright-orange Garibaldi fish, vibrant Sheepshead and Sea lions. There are also many different festivals throughout the year, check out visitcatalinaisland.com for an up to date calendar of events.
In 1924, 14 American bison were brought to the island for the filming of a movie. They remained and are like island mascots today as well as their pride and joy. Of course with time, they have multiplied and there are an estimated 150 buffalos still on the island today. If you’re lucky, you could spot one grazing along the hillsides along with deer and bald eagles, which we did not fortunately see though we did spot friendly squirrels and birds.
Shutterstock.com / Michael Bogner
Want to visit Catalina Island? Coming to the National Convention? Make a trip out of it! Getting to Catalina from San Diego is simple and easy! Simply drive up to Dana Point, CA, and catch the ferry (only about a one hour boat ride). SUMMER 2017
43
BY HELPING YOUR BUSINESS DO WELL, YOU HELP US DO GOOD When you do business with AREAA Global, you are supporting AREAAâ&#x20AC;&#x2122;s mission of increasing homeownership in the AAPI community. AREAA Global is 100% owned by AREAA, and 100% of any profits made are reinvested into AREAA. Because of this, you can be assured that our only goal for your business is to help it succeed as much as possible. Visit www.areaagloball.com today to learn more about how we can help make your business dreams become reality.
Wholly Owned by the Asian Real Estate Association of America (AREAA) 100% of Profits are Reinvested in AREAA National CA BRE 01938588
Join our growing list of partners