A substantial number of Asians and Asian-Americans dodged the housing crunch, and now they’re taking advantage of low home prices and low mortgage rates in California, say local real estate agents and a survey from a Realtors group.
The proportion of California homebuyers who were ethnically Asian, a group whose heritage may be Asian Indian, Japanese, Chinese, Filipino, or a host of others, rose from 12 percent in 2007 to 15.8 percent in 2008 and 18.1 percent in 2009, according to the California Association of Realtors Annual Housing Market Survey.
Local real estate agents said they’ve seen the increase in Asian buyers in San Diego and Southwest Riverside counties. They said Asian buyers are typically financially conservative, and thus stayed away from the overpriced homes of the housing bubble in the mid-2000s. Now these buyers have the cash and credit to take advantage of reduced housing prices.
Leslie Appleton-Young, chief economist for the California Association of Realtors, said the change in the proportion over time was noteworthy.
“They’re buying in distressed markets and utilizing (government incentive) programs,” she said.
During the height of the boom, from 2003 through 2006, the proportion of Asian homebuyers never rose above 12 percent, according to the surveys.
Local real estate agents said many Asian buyers prefer to invest in their own small businesses, and many are uncomfortable taking on too much debt.
“Asians are very conservative when it comes to buying,” said Shonee Henry, a Realtor in Scripps Ranch and president of the San Diego chapter of the Asian Real Estate Association of America. “We don’t go out there and buy, and forget about what’s going to happen tomorrow. We tend to make sure we have enough money to support ourselves and everyday expenses.”
Henry opined that many Asian-Americans avoided buying during the peak of the boom partly also because homes were expensive.
“They might have had the down payment, but the monthly payments were too high,” she said.
Now, with the median home price down 35 percent from the 2006 peak, these buyers have cash to make purchases and put down sizable down payments.
The CAR survey said the median down payment on a house by Asian buyers was $90,000 in 2009, triple that of non-Asians. They also consistently paid 20 percent of the sales price as a down payment, whereas non-Asians put down 10 percent. Appleton-Young said Asians may be avoiding low-down-payment programs such as those offered by the Federal Housing Administration.
Source: North County Times