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Latino Market Spreading Out

by Lew Sichelman

Anyone who doesn't know by now that the Hispanic population is the fastest growing in the nation and a major source of new business for housing over the next few decades could easily be accused of having their heads stuck in the sand.

But what many may not realize is that growth among Latinos is taking place on a much wider scale than in previous years and is being fueled for the most part by native born persons rather than immigrants.

The Hispanic population is going through "a major transformation," according to Richard Fry, a senior research associate at the Pew Hispanic Center, a Washington-based non-profit dedicated to chronicling Latinos' growing impact on the country and its economy.

Speaking at the annual Midwinter Housing Conference in Park City, Utah this month, Fry said that contrary to the Baby Boom generation, which was largely a white phenomenon, Hispanics will be the "single largest source of new adults" going forward, adding about 15 million persons 18 years and older by 2025. But unlike in the past, Latinos are moving away from densely populated areas.

They're "still metro dwellers, but there are lots of metropolitan areas," Fry told the conference of lenders, builders and allied professionals. Whereas Hispanics "used to clump" in about 15 major markets, "they've lost that distinction" over the last 20 years, the researcher added.

According to the Pew Center, the Latino population has grown by an average of 300 percent in 50 metropolitan markets, and by more than that in18. In Raleigh, the number of Hispanics has grown by 1,180 percent. In Atlanta, the Latino population is up 995 percent. And it's up 962 percent in Greensboro, 932 percent in Charlotte and 859 percent in Orlando.

Moreover, much of the growth since 1980 has been in the suburbs where the jobs tend to be located. "Hispanics are now suburbanites," Fry said. In another major change, the bulk of the Latino growth will be among better educated, more financially sophisticated adults who will be ready to become home owners sooner than their forefathers.

Only 2 million of the 15 million new Hispanics projected over the next quarter century will be the result of immigration, Fry reported. The rest will be U.S. born persons who have been educated in the U.S. school system.

"Immigrants who came to America in the '80s and '90s had a lot of children, the researcher said. As the Pew researcher described it, the Hispanic population in America has three distinct generations, each with different home ownership patterns:

39 percent are foreign-born immigrants who came to the United States as adults. Only 34 percent of this group are owners.

28 percent are the offspring of immigrant parents. About 48 percent are owners.

33 percent are third-generation family members who have been in America at least 60 years and have achieved a home ownership rate of 57 percent. Despite these changes, conceded that turning Latinos into home owners is "a pretty daunting challenge." For one thing, half of America's adult Hispanic population has not finished high school, making them what the researcher said is "most poorly educated group in our society."

For another, Latinos are largely "unbanked" only half have a credit card and only two in five have a bank account. And for a third, they tend to want to conduct business in Spanish and prefer to work with Hispanic real estate agents and loan officers or at least Anglos who speak Spanish. "The obstacles are pretty large," Fry said. "But the potential is there."

Indeed it is, agreed Lautaro Diaz of the National Council of La Raza, who told the conference the Latino market represents $210 billion worth of home loans over the coming years.

According to Diaz, one of the best ways to reach the Latino population is through counseling agencies located in the communities where Hispanics already reside. "Person-to-person community outreach is effective because the message is packaged in the cultural context" Hispanics understand, NCLA's deputy vice president of community development said.

The non-profit council, which was established to improve the "life opportunities" for Hispanic Americans, operates a network of counselors and agencies which has served some 18,000 clients and helped closed at least 3,000 home loans.

Noting that it will take some two million mortgages to close the ownership gap that currently exists between Whites and Latinos, Diaz said efforts to reach the Hispanic population are not working because "most marketing methods assume Hispanics are White persons who speak Spanish."

On the other hand, he said, counseling agencies can be "a bridge to the mortgage industry and provide a way to access mortgage-ready families" because they are the proverbial "trusted advisors" who know the language, have the education and understand the process.

Another way to reach the burgeoning Hispanic market is to offer a robust menu of products, suggested David Battany, director of single-family business at Fannie Mae.

"There is no single magical product that will solve all their problems," he told the meeting. "Only a variety of loans that address downpayment issues and credit problems will work, but only if they are executed properly."

To accomplish that, Battany urged lenders to housing professionals to open offices in the communities where Latinos reside, train their staffs to the sensitivities of the Hispanic population, and offer Spanish language collateral documents, including brochures, dictionaries and borrower education materials.

Published: March 19, 2003

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated.

He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year.

Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association.

He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972.

The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country.

He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others.

Sichelman is married, the father of five and grandfather of eleven.

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