By Cheryl Weber. As U.S. ethnic groups go, Hispanics are known as an emerging majority. And First Home Builders of Florida is in full pursuit of their business. This May, the Cape Coral-based builder will open a model home center in Fort Myers that caters to the local Hispanic population. Information will be printed in both English and Spanish, and the center will be staffed primarily by Spanish-speaking salespeople.
The new model home center, the builder's largest to date, is part of a stepped-up effort to make Latinos feel comfortable about buying a home. Half of the builder's 30 salespeople are fluent in Spanish, compared to five people a year ago. Moreover, the company recently hired its first Hispanic sales manager, Gabby Mendoza. The wife of a bilingual subcontractor, she had worked in sales and management positions for Nextel. "In the last two years, the Hispanic market here has grown 400 percent," says Patrick Logue, First Home Builders founder and CEO. "They're immigrating from Central America, Cuba, Mexico, and South America."
The experience of First Home Builders, which built 800 homes last year, is increasingly being repeated across the United States as builders come to grips with the sheer numbers of Hispanic customers now buying homes, and the nuances of what they're looking for in a home today.
With the U.S. Hispanic population now exceeding 35 million, based on 2000 census figures, Hispanic customers continue to be a growing force changing the home-buying landscape for builders. As a group, they still trail the rest of the country when it comes to owning homes, although not for lack of desire. According to the National Association of Hispanic Real Estate Professionals, 48 percent of Hispanics are homeowners, compared to 68 percent of the total U.S. population. A NAHREP survey conducted in 2001 showed that the five obstacles to homeownership among Hispanics are lack of knowledge about buying a home, down payments, affordability, language, and unverifiable income from cash payments.
Armadillo Homes, a Hispanic-owned company in Laredo, Texas, that sells 80 percent of its 600 homes annually to Latinos, typifies how some builders are working to overcome those problems. Division president Jeffrey Czar says new government programs introduced since the mid-1990s, which offer down payment assistance and lower fixed-interest rates, have contributed to the strong first-time home buyer market among Hispanics. "We attract buyers by helping them with the finance part," Czar says. "We'll do special deals to help with closing costs." The builder staff, 95 percent of whom are bilingual, are trained to counsel buyers on credit issues. "We'll work with them, sometimes three to six months, until they get money together or fix credit issues," Czar says. "We become very patient."
Armadillo also seeks out mortgage lenders that offer stated income programs, a financing medium that allows buyers to state their income without backup documents. The lender then verifies the work with the employer. Armadillo also goes the extra mile, calling employers and letting them know they should be disbursing payment with checks rather than cash.
As the Latino population has grown, so, too, has its financial means. Last year, Latinos represented a collective buying power of $581 billion, compared to $200 billion in 1990. First Home Builders of Florida specializes in the $100,000 turnkey house, complete with appliances and window coverings. The best seller in Armadillo Homes' market is a 1,456-square-foot house with four bedrooms and two baths that sells for around $80,000. "We're seeing Latinos buying bigger houses than they used to," Czar says. "Eight years ago they were buying a 1,200-square-foot house. Now they're opting for 2,500 square feet, upgraded faucets, and a two-car garage."
Whereas First Home Builders of Florida and Armadillo Homes target primarily first-time Hispanic home buyers, Miami-based Century Homebuilders' Hispanic market is all over the board. "Our market is 75 percent Latino, many of them Cuban," says president Sergio Pino. Last year saw more buyers from Venezuela, Columbia, and Argentina. Many of the Venezuelans, who are settling in Doral, Fla., are purchasing $350,000 to $600,000 homes. "It's like Cubans coming into Little Havana," Pino says. "The Venezuelans are making their 'hoods' here in Venelandia." Century, which offers homes from $160,000 to $600,000 does not differentiate between Anglos and Hispanics in its products and marketing. "Everybody wants more space," Pino says. "The Hispanics are more attracted to big bedrooms, but we do them anyway." The builder's smallest bedroom is 12 feet by 12 feet. Masters go up to 16 feet by 20 feet. And whereas Anglo buyers prefer carpet throughout the house, Pino says Latinos typically carpet only the bedrooms and upgrade to tile everywhere else.
Although Continental Homes in Arlington, Texas, a subsidiary of D.R. Horton, doesn't track the number of its Hispanic buyers, it targets them through advertising. "Radio station demographics indicate that Hispanic home buyers in our market don't listen to Spanish-only stations -- that's usually the older market," says Kate Sauceda, marketing director for Continental Homes' San Antonio division. "The best coverage is country, followed by rock stations, and then either pop or hip-hop."
Market consultant Isabel Valdes, in Palo Alto, Calif., whose past clients include Proctor and Gamble, Pepsi, and Doritos, says that because the Latino market is so segmented, builders need to do their research. Whereas traditional Spanish floor plans featured a central patio, a very large living room for multi-generational living, and a kitchen with doors you can shut, today's preferences vary by country of origin, the rate of acculturation, and socioeconomic status. "The market is changing," Valdes says. "The best thing to do is learn about the acculturation process. Maybe Latinos want to create a new Spanish-colonial style. Maybe they'd love to see a new approach to the American house. Do a test with a patio inside the house, and that's it. Builders need focus groups to see what Latino home buyers want."
Learn more about markets featured in this article: Cape Coral, FL.