Most people realize the importance of treating all people equally and increasing diversity not just in the real estate industry but in our neighborhoods and communities. The complexity lies in turning this feeling into meaningful, lasting change.
T3 Sixty dedicated its weekly Fireside Friday conversations in the month of July to diversity by hosting conversations with the leaders from the residential real estate industry’s largest associations focused on race and ethnicity. In successive weeks, Stefan Swanepoel and Jack Miller hosted leaders from the National Association of Real Estate Brokers (NAREB, close to 20,000 members), the National Association of Hispanic Real Estate Professionals (NAHREP, over 40,000 members) and the Asian Real Estate Association of America (AREAA, over 17,000 members) to discuss the challenges each community faces, the projects and services they offer, and the future efforts they see as the most fruitful for the industry to pursue.
The stats below illustrate some of the disproportion the real estate industry and America at large faces:
|Race||U.S. Population*||NAR Membership**||2019 Homeownership Rate*|
Source: *2019 U.S. Census Data ** 2019 NAR Member Profile
On July 10, Stefan and Jack spoke with NAREB President Donnell Williams and NAREB Executive Director Antoine Thompson about the challenges black homebuyers and black real estate professionals face and some potential solutions.
Both Williams and Thompson emphasized that discrimination still exists in 2020; they and their members see it every day. For those not in these communities or not witnessing or experiencing discrimination first-hand, recognizing the real, basic problem can be easy to overlook. The News Day’s 2019 “Long Island Divided” series revealed how discrimination does occurs today.
As most real estate agents work on commission, black Americans – because of a relative paucity of generational wealth – frequently cannot sustain the startup costs and months of no income necessary to successfully jumpstart a career as a real estate agent.
This connects directly back to the relative low rate of Black homeownership, which different past policies in America, along with ongoing systemic racism, has perpetuated. Homeownership contributes significantly to building generational wealth, which in turn enables parents to better support their children’s dreams and careers.
In addition to Black Americans’ relative lower generational wealth, many Black real estate agents start out with less-wealthy networks, which means fewer of their community contacts are buying or selling homes, and those who do transact, often do at lower price points. This means fewer and lower incomes for many Black real estate agents.
Williams and Thompson stressed that though the solution to many of these challenges and trends will take multiple generations to solve, we will not make significant progress unless meaningful steps are taken now.
Some stats Williams and Thompson shared during the conversation included:
- Average age of Black first-time homebuyer is 45 years old.
- 1.7 million Black millennials make over $100,000 per year.
- Almost 7 million Black families are mortgage-ready buy a home.
Williams and Thompson shared that industry professionals of all races who want to help can start by joining NAREB, which will make them more aware of the complexities and opportunities of Black real estate professionals. Beyond that, efforts that make homeownership more affordable, bring more Black professionals onto boards of directors and a plan to mentor Black agents in real estate careers will help immensely.
More reading: NAREB’s 2019 State of Housing in Black America.
On July 17, Stefan and Jack invited NAHREP President Sara Rodriguez and Executive Director Marisa Calderon, for a discussion on diversity. Both emphasized that Hispanic and Latino Americans understand deeply that the American Dream largely starts with homeownership; they not only want it, they will work hard for it.
In addition, Rodriguez explained that many in the Hispanic culture view their homes as a sacred place and a source of pride: “Our home is our castle.”
Hispanic citizens make up a significant segment of the future homebuying population. For example, they accounted for nearly a third (31.4 percent) of net new U.S. household growth in 2019, according to the 2019 State of Hispanic Homeownership report.
NAHREP encourages fiscal responsibility and well-rounded health to its members and Hispanic constituents, highlighted by 10 key principles:
- Have a mature understanding of wealth and prosperity
- Be in the top 10 percent of your profession
- Live below your means and be ready for the next recession
- Minimize debt
- Invest at least 20 percent of your income in real estate and stocks
- Know your net worth including the value of your business
- Be politically savvy
- Be physically fit
- Be generous with people who are less fortunate
- Be active in the lives of your family and children
Rodriguez pointed out that while white Americans often default into real estate as a second or secondary career, Hispanics tend to join the real estate profession when encouraged and introduced by a friend or colleague. They suggested that brokerages and team leaders would do well to canvas high schools with high populations of Hispanics to find great future agents.
Some notable stats from NAHREP’s homeownership report include:
- 4.9 million millennial Hispanics have the credit characteristics to qualify for mortgages; many of these homebuyers are located in Texas.
- At 59.9 million, Hispanics are the second-largest ethnic group in the U.S. and make up 18.3 percent of the overall U.S. population.
- Last year also marked the fifth consecutive year of gains in the Hispanic homeownership rate, the longest period of consecutive increases since 2000.
More reading: NAHREP’s 2019 State of Hispanic Homeownership Report
On July 24, AREAA President James Huang and Executive Director Hope Ateull joined Stefan and Jack to discuss the state of Asian Americans in real estate. The conversation made clear immediately that, unlike with Hispanic and Black populations, the Asian population is significantly more diverse, represented by over 50 distinct languages and cultures.
One common theme for many Asian Americans, however, is their aversion to credit and debt. Atuell shared how even her father and mother, as first-generation Americans, do not use credit cards. The AREAA leaders explained that many Asian American families emigrated from countries with unreliable banking systems, or where banks failed, which broke their trust in financial institutions.
Huang and Atuell pointed out that these traits can complicate homeownership because so often purchasing a home requires a mortgage and though many Asian homebuyers can afford the monthly payments, they may not qualify for a mortgage because they have thin credit files.
Source: AREAA’s State of Asia America 2020
In addition, while a large number of Asians first established communities in gateway cities such as Boston, Los Angeles and San Francisco, they are beginning to move to second-tier, more affordable cities such as Houston, Charlotte and Atlanta.
As far as joining real estate as a profession, Asian families tend to encourage their children to pursue careers perceived as extremely stable, such as in the fields of law, medicine and engineering, Atuell and Huang said. Real estate, a particularly entrepreneurial career, sometimes does cross their radar, even though many Asian Americans are driven professionals, including many successful agents.
AREAA is working to develop alternative credit facilities for its membership and target demo and to ensure more key real estate documents are translated into languages spoken across Asian American communities.
Some stats from AREAA’s 2020 State of Asia America report:
- Asian Americans have a median age of 37.3 years.
- 64 percent are immigrants.
- 26 languages are represented in AREAA membership
More reading: AREAA’s report can be downloaded here.
The conversations accentuated a juxtaposition: the American Dream is alive and well among all race groups, but the opportunity to achieve it is significant more difficult and complex for many minorities.
T3 Sixty is committed to contributing and in early August announced the creation of a Diversity Solutions division with two-decade real estate veteran Kenya Burrell-VanWormer as lead. T3 Sixty hopes to announce various specific initiatives over the next months and years to help make the residential real estate brokerage industry a better place for people of different colors, genders and identities.