5 Questions with AREAA
James Huang is president of Sperry Commercial Global Affiliates, and brings more than 20 years of experience in the commercial real estate industry and currently sits on several advisory boards of both local and national industry organizations including AREAA (Asian Real Estate Association of America) of which he is President-elect of the 15,000 member organization. James successfully led a team of real estate professionals who shared the same innovative approach to commercial real estate; a belief in the power of superior market knowledge and exceptional client service including at one point running seven offices throughout Southern California and over 130 commercial brokers.
Just yesterday (6/16/20), AREAA kicked off a successful Virtual Policy Summit where our very own Barrett Burns was privileged to introduce the keynote speaker – former Secretary of Commerce and former Secretary of Transportation Norman Mineta. At the Summit, AREAA also shared the results of their latest research study – State of Asia America Report. For some fascinating insights, please read on…
1) Asian American/Pacific Islanders (AAPIs) are the leading demographic (behind Caucasians) for homeownership. Why do you think homeownership is an investment AAPIs are willing to make?
For many of our community members, owning a home means we’ve finally arrived. Home ownership for many of us is a testament of financial stability and it is a means to create wealth that we can pass along from generation to generation. My parents first bought their home for $50,000. It’s now valued to be over $800K. They would not have thought that the home would appreciate that much and it could be a source of income during retirement or something that they may eventually pass on to their children. That’s why at AREAA, we are passionate about home ownership because it creates wealth and prosperity for families.
2) What are some highlights of the Asian Real Estate “State of Asia America” Report?
- There are around 4.1 million AAPIs in the US who are “Mortgage Ready.”
- Coastal cities have highest shares of the AAPI “Mortgage Ready” population but affordability is threatened in those areas due to low housing stock.
- The AAPI “Mortgage Ready” population takes longer time to save due to concentration in high-cost area
- There is a huge variation in homeownership rates within the top 20 MSAs (metropolitan statistical areas) by the AAPI population. While the homeownership rate at Riverside metro area is more than 70%, the homeownership rate in NY metro is only 50%.
- There is a huge variation in homeownership rate by the AAPI subpopulation as well. For example, while Japanese homeownership rate is around 65%, Nepalese homeownership rate is less than 30%
- Many AAPI are buying houses and moving to large MSAs in CA, TX and the Northeast.
- Both AAPI homeownership rate and loan count (conventional purchase only) have been rising post-financial crisis.
- AAPI loans are more likely to have 3 or more borrowers compared to Non-Hispanic whites, suggestively due to multi-generational households.
- In aggregate, AAPI tend to be younger, have higher credit scores and income than overall population
- The 52% of “Mortgage Weak” AAPI applicants (around 0.8 million) were thin files with clean credit records. They didn’t have bad credit but insufficient credit histories to generate a credit score. This is a huge opportunity for lending and credit education
- There is overall shortage of housing nationwide.
- Some of the least affordable areas for AAPIs are (under 11% affordability):
- San Jose-Sunnyvale-Santa Clara, CA
- Kahului-Wailuku-Lahaina, HI
- San Francisco-Oakland-Berkeley, CA
- Urban Honolulu, HI
- Flagstaff, AZ
- Los Angeles-Long Beach-Anaheim, CA
- San Diego-Chula Vista-Carlsbad, CA
- Seattle-Tacoma-Bellevue, WA
- Boston-Cambridge-Newton, MA-NH
- New York-Newark-Jersey City, NY-NJ-PA
- Washington-Arlington-Alexandria, DC-VA-MD-WV
3) With the economic uncertainty looming ahead, what do you think this report will look like next year?
Depending on how we rebound in the next six months, it could impact median income for many Asian-Americans. Next to the Hispanic population, Asian-Americans have been negatively impacted in jobs and income due to the pandemic. There are thousands of Asian-American business owners who are struggling to stay afloat during this challenging time. However, Asians are very entrepreneurial and creative so we’ll find opportunities to survive this pandemic. As a community, we are known for our resiliency and resourcefulness. I don’t doubt that many of us will find other ways to generate income.
4) What are some obstacles for homeownership for AAPI audiences? And what are some solutions that can help them?
For the most part, affordability is a huge obstacle for our community. If you look at our population, we are in high-cost markets like LA, SF, NY, Boston. It takes time to save for a down payment since we have it in our minds to put down 20%.
Other barriers include thin credit and that’s why we are working to make changes in the underwriting process to allow other credit scoring models in the marketplace. We believe that alternative credit scoring models beyond FICO will open doors of opportunity not just to AAPIs but to other communities of color.
5) Many AAPI have faced discrimination, accusations and are subject to horrific acts of prejudice in the wake of the COVID-19 pandemic. What statement or position has AREAA taken to reassure and support its community during these difficult times?
It is unfortunate that the rhetoric against Asian-Americans have been perpetuated by hate and ignorance about COVID-19. We’ve been partnering with members of the Asian American Congressional Caucus and other AAPI organizations to affirm our community members that while we are being targeted by hate crimes and prejudice, we respond with acts of kindness. What do I mean by that? Well, if you look at what our members and chapters have done these few months since the pandemic started, we’ve gone to hospitals and healthcare institutions to donate not just masks and PPEs but also food for healthcare providers and those in the frontline. Some of our members have made masks and donated it as well. Some have donated their own money for charitable causes to help with the pandemic. It’s amazing how our community is responding to all this. We know that we will emerge from this pandemic as stronger and better individuals.