Thread: Georgia Law Chills Latino Home-Buying Market

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Georgia Law Chills Latino Home-Buying Market
A measure meant to deny jobs and services to illegal immigrants has even legal residents rethinking their future in the state.
By Jenny Jarvie
Times Staff Writer

June 19, 2006

ATLANTA — Two months ago, all Alina Arguello had to do to find Latino home buyers was put up a sign and answer her phone.

But ever since Georgia passed one of the most stringent and far-reaching immigration laws in the nation, the number of Latino buyers who call the Re/Max agent's home office in suburban Atlanta has dwindled from about 10 to two a day.

"We're seeing a drastic drop," she said. "There's just a tremendous amount of people who want homes, but are not calling." Many real estate agents and mortgage providers who cater to Spanish-speaking immigrants across Georgia say that the flourishing Latino home buying market has faltered since April, when Gov. Sonny Perdue signed the Georgia Security and Immigration Compliance Act.

Almost immediately, Latino home buyers pulled out of contracts. Some who had already bought, put their homes on the market. And many prospective buyers stopped searching for homes.

Although Georgia's new legislation does not prohibit illegal immigrants from owning property, many wonder whether they will want to live in Georgia when it begins to come into effect in July 2007.

The law will require companies with state contracts to verify employees' immigration status, penalize employers who knowingly hire illegal immigrants, curtail many government benefits to illegal immigrants and require that jailers check the immigration status of anyone who is charged with a felony or driving under the influence.

"For Latinos, buying a home is the American dream, but, you know, at this time they are hesitant to accomplish that dream," said Eliezer Velez, who provides housing advice for immigrants through Atlanta's Latin American Assn.

The recent caution among Latino home buyers has caught many real estate professionals off guard.

In recent years, the Latino housing market has become one of the most dynamic and robust sectors of the ailing industry. A growing number of lenders now fund home loans with Individual Tax Identification Numbers, introduced by the U.S. Treasury a decade ago to collect taxes from illegal workers. The down payment required for these loans has dropped from about 10% to 3% in the last few years.

In Georgia — home to the second-fastest growing Latino population in the nation — 37% of Latinos are homeowners, according to the 2000 census. The number of homes purchased by Latinos in metro Atlanta jumped from about 3,500 in 1999 to 8,500 in 2004, according to data from the Home Mortgage Disclosure Act.

But a $150,000 suburban ranch with a big yard is no longer as appealing to those who fear they — or their loved ones — could lose their jobs.

"This new law is definitely putting some brakes on Latino home buying," said Carlos Mata, vice president of HomeBanc en Español, a bilingual bank based in Atlanta, who said that based on the last two months, he doubted whether his company would reach its financial goal by the end of the year.

"I call it the public enemy No. 1 of the Hispanic housing market in Atlanta. Nothing — not the economy or the interest rates — threaten it so much." On April 17, when Perdue signed the legislation, many real estate agents here took calls from despondent clients.

Diego Castaneda, a real estate agent and loan officer in Norcross, Ga., had two clients — illegal immigrants from Mexico — who were a week away from closing on homes in Atlanta's northern suburbs when they pulled out of their contracts.

Losing $1,000 in earnest money, they calculated, was preferable to taking on a mortgage when they didn't know how the new law would be implemented.

"They were just scared," said Castaneda, who has struggled to find new clients. Last week, he called the classified section of Mundo Hispanico, a local Hispanic newspaper, to downgrade his $800-a-month advertisement: In the last two months, he said, it had not generated any calls.

State Sen. Chip Rogers, a Republican who represents some of Atlanta's northern suburbs and who sponsored the legislation, said he was "very satisfied" that the law seemed to be prompting some illegal immigrants to consider leaving Georgia.

"If someone is here illegally," he said, "buying a house would probably not be a wise investment." But not all of the Latino immigrants who are uncertain about investing in Georgia property are illegal.

"A lot of people are connected one way or another to the undocumented," said Mata, who founded HomeBanc en Español in 2002. "They are saying: What will happen to my wife, my husband, my mother?"

Dioris Medina, a Re/Max agent in Tucker, has two clients who are legal immigrants who planned to relocate from Virginia to Georgia. They have already signed their contract, but are having second thoughts about whether they would feel welcome in Georgia.

With Congress deadlocked over national immigration reform, many real estate professionals say that insecurity among Latino home buyers is not confined to Georgia.

"To some degree, everyone is sitting on the fence a little bit," said Gary Acosta, co-founder of the National Assn. of Hispanic Real Estate Professionals. "If the national legislation is not intelligent, if it really restricts the opportunity of Latinos, it would be a major blow to the housing industry."

Acosta's organization, which has 17,000 members, recently projected that from 2002 to 2012, 40% of first-time home buyers in the U.S. will be Latino.

If the Latino housing market were to falter, Acosta warned, it would affect every segment of the housing industry. Realtors who do not set out to cater to Latinos would suffer if fewer people were looking for houses.

"Your client can't buy a $300,000 house if he can't sell his $150,000 house," he pointed out.

For now, real estate agents who cater to the Spanish-speaking community in Georgia are adopting more aggressive tactics.

Arguello, a Nicaraguan-born U.S. citizen who has worked in real estate for 12 years, spends two hours a day cold-calling Latinos who live in apartments near the properties she is attempting to sell. She also sends her assistants to Wal-Mart to hand out fliers before she hosts open houses.

"I'm practically pushing people into looking at houses now," she said.

After most of his deals fell through, Felipe Bernal, a Congolese refugee who has been selling real estate in Norcross for nearly two years, was in Los Angeles last week. He was meeting clients who want to invest in or relocate to Georgia.

"They are legal, more established," he said of Latino home buyers in California. "And they just can't believe how cheap the houses are in Georgia."

but are having second thoughts about whether they would feel welcome in Georgia.

You are NOT welcome..........get legal....get welcomed...otherwise...GET OUT!

If you are in this country illegally and working here illegally you should not be permitted to get a mortgage and buy property. These banks and realtors will do anything to make money including marketing to illegal aliens who break our laws. Nobody seems to want to do anything about this. As far as the real estate market losing out by not being able to sell homes to illegal aliens. Too bad they have been making money hand over fist for years by their illegal practices and yes they did think it would be a huge untapped market. Well wrongo, they are not getting amnesty so bye bye to your millions realtors

I only hope this is true - but a recent news report said Georgia was the most corrupt in writing bad and shakey mortgage loans