Even as the real estate market is expecting a return of “boomerang homebuyers,” who buy homes after once losing it to foreclosure, the rate at which Korean-Americans reenter the market still remains relatively low, according to housing analysts.
The surge of boomerang homebuyers in recent years was triggered by those who have survived the Great Recession, but returning buyers still remain as something of a rarity among Korean-Americans, the community’s realtors explained.
“Korea immigrants have been a rarity in the group of boomerang homebuyers in the last three years,” said Seung-hyun Nam, the chairman of Korean Real Estate Brokers Association SoCal.“It seems as if many of them haven’t yet rebuilt their credit scores and financial flexibility to buy homes again even after seven years since foreclosure.”
Researches have shown that one in every four of those who have lost their homes to foreclosure or short sale across the country during the recession have eventually bought again.
There are currently approximately 4.4 million Americans who have lost their homes to foreclosure made sufficient credit recovery within three to five years, according to property information provider CoreLogic.
Among those 4.4 million who have restored their credit, 25 percent of them have successfully purchased homes again. Even in California, where real estate value continues to soar, the rate reaches 24.8 percent.
However, real estate experts say rebuying after losing homes is more challenging for Korean-Americans, as many are self-employed business owners, which makes it difficult for them to sufficiently offset their losses from the past. The rising real estate costs and stricter mortgage guidelines are only making their return to home market even harder.
“The market of Korean-American boomerang owners still remains insignificant,” said Dream Realty chief Kenneth Chung. “Barring a comprehensive restructuring of home prices, it’s difficult to foresee returning Korean-American homebuyers.”
By Sung Cheol Jin