As director of Strategic Markets for Citibank, Maria Zywiciel is charged with meeting the lender’s community reinvestment goals and ensuring that a suite of affordable lending products is available to would-be homebuyers from all walks of life. In this exclusive interview, Zywiciel discusses why all those involved in the real estate transaction—from real estate broker to agent to lender—must be focused on the future face of American homeownership: minority and first-time homebuyers.
The Diverse Face of Homeownership
You don’t have to look very far to find a wealth of research that unwaveringly substantiates the growth in the minority-homebuyer segment, including projections for an exponential increase in the not-so-distant future.
“Minority homeownership is getting much more attention than it has in the past,” says Zywiciel. “I was really impressed with the information published by the MBA (Mortgage Bankers Association) at their Diversity Summit (held this past June). According to the MBA research, out of the 17 million new households that formed between 2010 and 2013, over a third were from diverse markets. Those stats coming from an informed organization like the MBA are huge. The more mainstream the topic can be, the more visible it becomes.”
The Hispanic market alone has had, and will continue to have, a significant impact on homeownership. According to the National Association of Hispanic Real Estate Professionals (NAHREP), from 2000 – 2013, the total number of owner households in the U.S. grew from 69.2 million in 2000 to 74.7 million in 2013, or an 8 percent increase, and during that same time period, Hispanic households grew from 4.2 to 6.8 million, representing a 47 percent increase. With a population projected to grow to represent 30 percent of the total U.S. population by 2050, the Hispanic market will become critically important to real estate and lending professionals.
The Hispanic segment proved its strength during the recent real estate downturn. According to Zywiciel, “While homeownership waned within the Hispanic community as well at that time, it still outpaced the general population.” Now, as the market continues on the path to recovery, Hispanic, Asian, and other diverse markets are expected to make an even larger impact on homeownership; impending immigration reform may potentially tip the scales even faster.
The reason is simple: homeownership still matters in the global community. “Among immigrants, the American Dream is still to buy a home, more of a dream, in fact, than it is to many native-born Americans,” explains Zywiciel. “There’s a shift among America’s young people, who now don’t necessarily want to buy a house after graduating college. But homeownership is still very much the American Dream of immigrants coming to the United States.”
According to Zywiciel, who is a co-chair for NAHREP’s Board of Governors, immigration reform is extremely important to NAHREP, whose research shows that even the slightest degree of reform would pump almost three million homes into the U.S. economy and create a healthy pipeline of home sales to come.
Despite their strong desire to own a home, the housing and financial meltdown did generate a degree of distrust in homeownership among minority and immigrant consumers. Therefore, creating relationships and maximizing opportunities within diverse segments will require building trust through good information and guidance.
“My parents came from Mexico in the 1950s,” shares Zywiciel. “Even back then, they spent so much time gathering information and looking for a trusted source. Now, the financial meltdown has tainted people’s view of lenders; add on layers of complexity, like language barriers, and the mistrust is exacerbated. Hispanics, like many minority groups, are looking for trusted sources of information because there is so much misinformation out there. It’s important for lenders, practitioners, real estate agents, and brokers to be proactive in getting the right information out.”
Understanding the cultural differences among diverse groups is a critical component to building the level of trust needed, adds Zywiciel. “Client segmentation is very important all the way around, not just as it relates to minority communities. In any sector, we should look to client segmentation to understand the current or anticipated needs of a particular client base or future customer.”
When it comes to the diverse homebuyer, language is the primary area of focus, but equally important are the methods used to reach these consumers. As Zywiciel explains, this might involve community outreach as opposed to an ad in Town and Country or the Wall Street Journal; or with some groups, maybe it’s both.
“Outreach is an important consideration,” says Zywiciel. “You must consider the geographic representation of where your sales force is. If you’re going to go down the language route, realize that it’s not just about the translation of material. If you want to really capture the essence of the message, you have to look at the whole feel of the piece, including pictures. There are also quality-control issues that the broker or lender has to be aware of, such as the tone and vernacular people are using on the phone. But this is the same approach you should take in any sector—you must anticipate customer needs.”
Tough Times for First-Timers
With cash buyers and investors representing such a large portion of recent home sales, first-time homebuyers are finding themselves boxed out of the market. Efforts across the board must be made to restore the first-time homebuyer segment, a critical component of overall home sales each year.
“Because of the unprecedented amount of investors and cash buyers in the market, inventory is being gobbled up and, in some pockets, we’re seeing over-inflation of property value,” explains Zywiciel. “The home seller wants the cash buyer who can close quickly versus someone who may need layered financing or down-payment assistance to get into the home.”