By Vania Cao
While Asians make up a still modest slice of the American population, their role in the American real estate market is growing. According to RealtorMag, the California Association of REALTORS® reported that Asian-American buyers accounted for 26 percent of all residential properties sold in the state in 2011, and other cities around the country such as Houston, New York, Seattle and Washingon D.C. have growing Asian American communities that are ever more influential in the real estate business.
Asian Americans have various reasons for pouring their hard-earned money into real estate. As with any large financial commitment, purchasing a condo, apartment or home is not something anyone enters into lightly, especially those who might still find themselves working to pay off existing credit card, student loan or car debts as they enter the workforce. But like many young professionals who are or are becoming homeowners, owning versus renting is attractive because the money put into rent is now going towards one’s own property, rather than into someone else’s pocket.
Zhen Xia is a young professional and a long-time resident of Maryland. After starting his career, he saved up enough for a downpayment for a single family house and hasn’t looked back since. As to his biggest motivation for putting down so much cash into a house in his 20s?
“It’s all economics,” he explained. “Investing – like stock – except in a real asset.” The long-term economics of home ownership justified the immediate costs of a downpayment, closing costs and other financial hits in his situation.
For many young professional Asian Americans, this emphasis on practicality, fiscal responsibility and financial independence were greatly influenced by their parents, many of whom were Asian nationals who came to the U.S. without much money to their names. This was the case for Dr. Deborah Kwon’s parents, who came to the U.S. for graduate school from Korea. Kwon is currently a postdoctoral research fellow at the University of Pennsylvania and grew up in Northern Virginia.
Kwon rented an apartment in several neighborhoods in Washington, D.C. in the beginning of her Ph.D. career, while she conducted research at the National Institutes of Health in Maryland. She then purchased an apartment in Bethesda, M.D., where she lived until graduation, and rented it out after moving from the area.
“I never thought I would own,” she said. “But since I grew up in the D.C. area, it’s always felt like home to me, and my parents pointed out it would be nice to have property here.” For Kwon, her parents were the motivating force to dive into the world of mortgages and loans, and were a vital source of financial help.
“I wouldn’t have done it without their encouragement and obviously their help, since I didn’t have a real job or a huge savings account,” she said. Despite the daunting prospect of taking on a large financial burden without the income of a full-time job, she feels a mortgage is a different financial beast than other common debts that people her age could have hanging over their heads. “You can always get money back from your home,” she said. “You can’t sell your degree, but you can always rent or sell property.”
Xia feels the same. If he moves in the future, he said he would either sell his house or transfer ownership to his parents, who live in the area.
Although some Asian nationals have recently been attracting attention in the real estate market snapping up prime real estate in enviable locales, their ranks generally include wealthy entrepreneurs and real estate tycoons who can pay for big houses with lots of cash. For the average working Asian American, practicality trumps flashiness. “I just want a functional home that feels like a home,” Xia said. “I wouldn’t mind trading down to a smaller place but one that serves my needs.”
In the end, beyond the economic benefits, Asian Americans follow the dream of buying a house because like everyone else, they desire a place to call their own. Vic Poonai, a young professional working as a contractor in Bethesda, MD, is currently considering becoming a homeowner with his fiancée, and has been looking around the Chevy Chase and Potomac areas. “There’re a lot of pains that come with [home ownership],” Poonai said, “but in the end it’s a home. It’d be our home.”