Living the Dream : While the real estate market around most of the Southland is suffering, Latino immigrants are snapping up houses in South Los Angeles and prices are stable.

Less than a year after the riots of 1992, in the heart of South-Central Los Angeles, Mirian and Ernesto Ramirez bought their first house around the corner from where shops had been looted and burned.

Many of the Ramirez’s friends and co-workers thought they were crazy. But the immigrant couple, who work as hotel housekeepers, immediately fell in love with the $100,000 Spanish-style home and the neighborhood of well-kept bungalows on West 56th Street. Nearly 2 1/2 years later, they have no regrets.

“Some people are scared of the area,” said Mirian Ramirez, a 42-year-old native of El Salvador, as she cooked a hearty chunk of beef on the kitchen stove for dinner while her four children played in the back yard. “We are very happy here.”

In an area better known to outsiders for civil unrest, poverty and crime, thousands of Latino immigrants like the Ramirez family have realized the American dream of home ownership in the once predominantly African American neighborhoods of South-Central.

While most of Southern California has endured a real estate collapse in the past five years, home prices in much of the flatlands of South L.A. have actually risen. Most of the buyers have been droves of Latino immigrants drawn by the area’s large inventory of affordable homes and central location, real estate agents say.

“If you didn’t have the Latinos in here, you wouldn’t have had any sales at all,” said Joe Arciniega, a Watts real estate broker. “What’s keeping it going is the Latino market.”

The real estate market in South L.A. illustrates the growing clout immigrants hold in the U.S. housing industry. Immigrants prize home ownership much more than Americans in general, according a 1995 nationwide housing survey by Fannie Mae, the nation’s largest source of mortgage funds.

About 20% of immigrants surveyed by Fannie Mae said they are “very likely to buy a home” within the next three years compared to 13% for the rest of the population. “The home buying market will increasingly become an immigrant market,” said John A. Tuccillo, chief economist of the National Assn. of Realtors.

In South L.A., immigrants have already left an indelible mark on the home sales business. They have enriched Latino brokers, forced many lenders to review their loan criteria and spurred black real estate agents to learn Spanish.

“I’m in trouble if I don’t have Hispanics on my staff,” said LeFrancis Arnold, an African American broker and an owner of Arrow Realty in Lynwood.

The most recent Latino home buyers are part of a larger wave of immigrants that has transformed a wide swath of South L.A. into a Latino barrio of more than 300,000 residents. On commercial streets, Mexican and El Salvadoran bakeries sell pan dulce down the block from long established African American-owned shops that bake sweet potato pies.

The new Latino barrio began to take root in the 1970s. But a surge of immigrant home buying began in the late 1980s and early 1990s as Southern California’s housing market overheated and budget-minded Latino immigrants took advantage of the bargains still available, real estate agents say. While the sales pace has since cooled considerably, more than 2,000 homes in the area were sold last year.

As Latinos move in and blacks move out, many social and political observers hope that the new immigrant homeowners will set down roots and help stabilize their new neighborhoods.

“Home ownership is a strong indicator of a stable community where you are more effectively able to deal with gangs, education and other social issues,” said Fernando Guerra, director of the Center for the Study of Los Angeles at Loyola Marymount University. “It’s amazing what happens politically, socially and culturally when someone buys a home.”

In a region where high prices force most people to give up on home ownership, gardeners and maids have been able to buy houses for under $100,000 in South L.A.--a price that is unheard of in most of Southern California.

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While there are no statistics to quantify the area’s homeownership among Latino immigrants, more than 12,000 homes have been sold in South L.A. since 1990, with the vast majority of buyers being immigrants, say real estate agents, lenders and local officials.

Brokers say Latino home buyers have had the largest impact on sales and prices in the eastern and central sections of the area, which includes such neighborhoods as Watts, West Adams and South-Central, where the 1992 riots erupted.

Some of these same neighborhoods became hot real estate markets in the early 1990s. While regional prices peaked in 1990, the median home price in much of South L.A. continued to rise, climbing from $115,000 in 1990 to $125,000 in 1992, according to Dataquick Information Systems, a La Jolla-based real estate information firm.

The median has since sunk back to $118,000 during the first seven-months of this year, but still remains above the 1990 level. In contrast the median price of a Los Angeles County home, again according to Dataquick, has steadily fallen from $201,000 in 1990 to $166,000 this year--a decline of 17%.

Of course, despite attractive neighborhoods of palm-tree-lined streets and tidy homes, South L.A. remains troubled in many ways. Unemployment is high while retail stores and financial services are in short supply. More than a third of the area’s households fell below the poverty line in 1990, according to the City of Los Angeles Housing Department.

The culture of gangs and violence--which dominate the movies, songs and public perceptions of the area--remains a constant threat. The Los Angeles Police Department’s Southeast Division, which includes Watts and a large section of South-Central, suffers from the city’s highest homicide rate, much of it gang related. It is no wonder that the first thing many new Latino homeowners do is to install iron security bars across their doors, windows and front yards.

Race relations are sometimes tense and fragile as African Americans watch their neighborhoods turn into barrios. But in some cases, close new ties are forged. “They are divine,” Mirian Ramirez said, referring to the African American couple across the street who watches over their home. “They take care of us and we take care of them.”

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Latinos are the most recent group to use South L.A. as a stepping stone from the working class to the middle class. In the 1920s, developers built neighborhoods of small wood and stucco bungalows--featuring down payments as low as $400--to house the thousands of factory workers attracted to a Los Angeles that was just starting to flex its industrial muscle.

South of Downtown Los Angeles and east of what is now the Harbor Freeway, a thriving African American commercial and residential area took root in the 1920s and 1930s. As racial barriers fell over the decades, blacks moved westward to more affluent neighborhoods.

The African American population of South L.A. dropped by 20% during the 1980s many residents migrated to the fast-growing suburbs of the Inland Empire. Latino immigrants, for the most part, have moved in to the fill the vacuum.

The strongest attraction remains the affordability. “I like the price--I couldn’t pay much more,” said Arturo Marquez, a 34-year-old gardener from Mexico who recently bought a two-bedroom house in the Florence area for $95,000.

Ramiro Marquez (no relation to Arturo Marquez) wanted to buy a house for his family in nearby Huntington Park. But prices in that heavily Latino suburb were at least $20,000 to $30,000 beyond his means, said the 37-year-old construction worker and gardener.

But last November, the couple and their three children moved into a tiny stucco house on a large lot in South-Central for $108,000. “I was surprised with the small down payment,” said Marquez, who invested $5,000 to buy the home.

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Daniel Dubon had looked at buying a home in the Riverside County community of Moreno Valley, 70 miles east of Downtown Los Angeles. Instead, he decided to stay put in South-Central and is in escrow to buy a $105,000 duplex within walking distance of the auto body repair shop that he owns.

“I would have wasted a lot of time coming and going,” said Dubon, a 40-year-old Guatemalan immigrant. “I can walk to work two blocks away.

After a long search, Juan and Maria Guadalupe Sosa are buying a two-bedroom house in Watts for $113,000. Unlike their tiny apartment in South Gate, the house has an ample back yard and patio for the couple’s four children to play outdoors.

“It is very peaceful there,” said Juan Sosa, 42, who came to Los Angeles from Mexico 14 years ago and now works in a Korean bakery.

The real estate market has also been strong enough to draw investors like David Limon, who has purchased and subsequently sold 10 homes and duplexes in South L.A. in the past 2 1/2 years. In one case, Limon was still in escrow on a house before he had sold it to an eager Latino immigrant.

“In some situations, I have had to sell them for a little less than I expected,” Limon said. But, “I always made some OK money.”

The market suffered temporarily after the riots and the fear spawned by the passage of Proposition 187 last November. “Sales dropped. People were scared,” said David Sarinana, owner of A Better Service Realty in Bell. “They thought they would not be able to buy.”

In addition, the recession has taken its toll, as the large number of foreclosure sales will attest, and many fear the immigrants are taking on financial burdens beyond their means.

Maria Elena Barajas, a widow and mother of eight adult children, purchased a $106,000 home in the West Adams district in late 1993. She was laid off a few days later from her factory job. Instead of losing the house, however, Barajas’ children have chipped in to make the mortgage payments.

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“I worked 15 years without stopping” said Barajas, a 53-year-old Mexican immigrant, sitting at a large, formal dining room table squeezed into one end of her living room. “But I have the satisfaction of owning a home. It was the best investment I ever made.”

The South L.A. market has also benefited from government programs created to boost home ownership in inner-city communities and among low-income residents.

Fannie Mae--a government-sponsored corporation that is the nation’s largest source of mortgage financing--in the past 19 months has funneled about $200 million in low-cost home loans into South and East Los Angeles and other inner city areas, said Barbara Zeidman, an agency official in Los Angeles. The programs allow buyers to pledge as little as 3% of their own money toward a down payment.

Many mortgage lenders active in South L.A. have also become more flexible in their loan requirements, recognizing that many Latino immigrants keep money at home instead of in a bank and often work at jobs--such as house cleaning, baby sitting and gardening--where they don’t get a federal W-2 form to verify income.

Thomas Ramirez, a loan officer for American Savings, once tracked down the clients of a Latino cleaning woman to verify her income and get her a loan for a South-Central home.

Lenders have also become much more accepting of gifts from family members to help out on a down payment. That’s how Jesus Franco Sierra, a 45-year-old gardener, got a loan to buy his first home south of Downtown Los Angeles last year. His sister contributed half of the down payment and closing costs for the $100,000 home.

“I didn’t have enough money--I thought I never would buy a house,” said Sierra, who immigrated from Guatemala 19 years ago.

“In your own house . . . you feel more secure,” Sierra added. “You are respected. You feel like a king.”

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Home Prices

Single family home prices in Los Angeles County have sunk 18% since the peak year of 1990. However in a large swath of South Los Angeles, purchases by Latino immigrant home buyers have helped prices in the troubled area remain above 1990 levels.

South Los Angeles Median Home Price

1995**: $118,000

Los Angeles County Median Home Price

1995**: $166,000

* Includes Zip codes 90001, 90002, 90003, 90007, 90011, 90018, 90037, 90044, 90047 and 90062

** Year-to-date sales through August

Source: Dataquick Information Systems