EL SALVADOR : Builders Home In on the Emigre Market

With his 11-home development in the hills above this capital right on schedule, less than two months from completion, Jose Othmaro Apontes should have been happy. Instead, the 42-year-old engineer worried.

The bank loan that financed the project was coming due, and only one of the $70,000 townhouses had sold. With mortgage interest rates at 23% here, a family needed a $2,800 monthly income to qualify for a loan, making prospective customers less than plentiful.

“If we do not sell the houses on time, interest eats up all the profit,” he said during an interview in his spartan office in a working-class neighborhood.

So earlier this month, Apontes and 16 other contractors went looking for customers in a new market: among Salvadoran immigrants in Los Angeles.

Houses traditionally are the most important investment made by immigrant workers who plan to return home to retire. Rural workers usually build their houses bit by bit, buying a piece of land then sending home their savings to pay for construction or returning for brief periods to do the work themselves.

But immigrants who come from cities--as an increasing proportion do--have a different mentality, said Mario Lungo, a researcher at the National Foundation for Development, a think tank here. They want professionally designed houses with utilities and other city services.

“The construction companies figured this out and decided to take their merchandise to the customers,” he said.

Along with six Salvadoran banks, the contractors staged a weeklong housing fair at the Los Angeles Convention Center, showing prospective home buyers mock-ups and videos of their projects and providing mortgage applications.

The banks helped by easing their usual loan terms. For example, the minimum down payment was cut to 10% of the house’s value from the usual 20%. They were not authorized to reduce interest rates, but they had slipped to about 17% anyway. Credit checks were required, meaning that only Salvadorans working legally in the United States were eligible for loans provided during the fair.

After hearing advertising on Spanish-language radio or reading fliers passed out in predominantly Salvadoran neighborhoods, maids, gardeners, city employees and small merchants flocked to the fair.

“One man told me that he and his wife worked from 6 in the morning to 8 at night in order to save enough money to buy a house here and retire,” Apontes recalled.

“People liked seeing the company owners,” he said. “It gave them more confidence in the projects.”

They also used the opportunity to negotiate discounts.

“One customer came the first day of the fair, and I was talking to him for an hour,” Apontes said. “He came back the next day from 4 until 8, and still in the elevator on the way out he was saying, ‘I’ll offer you this much.’ ”

Apontes took the offer. “By the end of the second day, my lips were chapped,” he said. “If I could go for a month, I would sell all of my houses.”

As it was, by the time he went home, Apontes had received down payments for three of the nearly completed houses and for seven more in a less expensive, 27-unit development where construction on $46,000 townhouses had just begun.

“That was good for the first time,” he said.

The Salvadoran Construction Chamber, which sponsored the event, plans to organize more fairs in other cities with large Salvadoran populations.

“We have opened a market,” chamber President Hugo Barrientos said. “We had always considered construction a local industry because buildings cannot be moved, but we have learned that we can sell in other places and participate in globalization.”