Expatriates Reshape Housing Market

By Krissah Williams
Washington Post Staff Writer

SAN MIGUEL, El Salvador -- Behind the huge black gates of the Parque Residencial Riverside sit four-bedroom brick houses with air conditioners and washers and dryers shipped from the United States, a clubhouse, basketball courts and a barbecue area. It's a bit of Americana unexpectedly plopped in the middle of this city's Spanish-style houses.

Most of the grassy plots in the development have been bought by Salvadorans living in the United States, people like René Trujillo, 35, a Prince George's County construction contractor, who plunked down $19,200 for a 5,000-square-foot lot. This is where he plans to retire.

"It is a Salvadoran's dream to build a modern house there," said Trujillo, who in 14 years has gone from illegal immigrant to janitorial worker to owner of a painting company and of a $300,000 house in Lanham.

"After you achieve your American dream, you have the Salvadoran dream," said René León, El Salvador's ambassador to the United States, who said he knows many "people buying lots and building the house of their dreams for retirement."

Indeed, 86 percent of the 300 families who have bought property at the Parque Residencial Riverside are Salvadorans living in the United States. And they are only a handful of the thousands of Salvadorans living abroad who, according to the Salvadoran embassy, are buying homes and land in this small country, reshaping the housing and development market and helping push up real estate prices.

This is a phenomenon of modern immigration. In an age of the Internet, satellite television and radio, cheap air fares and cheaper international phone rates, immigrants from many countries are more connected to their homelands than immigrants ever could have been in the past.

"People think immigrants come to stay," said Jorge Pinto, who has studied immigrants' financial connections to their home countries as director of the Center for Global Finance at Pace University in New York and is a former executive director of the World Bank. "Many are always with their eye to go back. Whenever they feel that they have capital or critical mass, they buy the property."

Salvadorans living in the United States have been returning to El Salvador since the mid-1990s -- some permanently, others to vacation homes.

An improved highway system, relatively reliable electricity and plumbing, and private schools have created a more comfortable lifestyle, said real estate agents. Buying a home was made easier for Salvadoran expatriates in 2001 after El Salvador's government adopted the U.S. dollar as its official currency. And prices here generally are lower than those in the United States.

Meanwhile, over the past decade, more Salvadoran immigrants, like Trujillo, have become business owners, amassing enough wealth that politicians here now refer to Salvadorans living in the United States as El Salvador's middle class. Dozens of residential projects like Riverside are being marketed to them, according to real estate brokers, who say interest by Salvadorans living in the United States appears to be growing.

But in venturing back into their homeland, many Salvadorans are returning to a country where there are still few rules to protect home buyers. Brokers are not licensed, although efforts are underway to do so. Meanwhile, there have been some scams.

Trujillo knew of the potential for problems. But he and his wife Marina, whom he met in the United States but who is also from San Miguel, were pulled by a strong desire to eventually return to El Salvador.

Marketing Memories

Nostalgia pricked Trujillo that Saturday two years ago after he heard a commercial on Radio America, a Spanish-language radio station broadcasting from Wheaton. A voice began enticing Salvadorans to remember their happy childhoods: canoeing down rivers and picking fresh fruit from trees in the countryside, free from the frantic pace of life in the United States. Then the soothing announcer invited listeners to return to their home country by buying land at Parque Residencial Riverside.

"I imagined [my house] had already been constructed like they described -- something secure and private," Trujillo said one recent evening, as he sat in the dining room of his house in Lanham.

When he heard that the Salvadoran real estate agent selling the project was at the office of Radio America, Trujillo drove to Wheaton to meet her. Trujillo and his wife hoped the land would someday help connect their four young U.S.-born children with their family. The children, the oldest of whom is 12, have never traveled to San Miguel.

At the offices of Radio America, Riverside real estate agent Any Rovira de Tusell showed Trujillo a promotional video of the project. Tusell has been selling upscale properties to Salvadorans living in the United States for three years. To reach them, she uses programs aired on Spanish-language stations in Washington, Los Angeles, Houston and other cities. She also airs commercials on Spanish-language television.

She said Salvadoran expatriates respond because they miss El Salvador, and she can offer them a lifestyle that combines both worlds. Antonio Medina, owner of the Mercadito Ramos grocery chain in Maryland, Washington and Virginia, agreed. Medina, who immigrated to Washington in 1978 and became a U.S. citizen 18 years ago, bought four lots in Riverside because he misses the slow-paced Salvadoran life.

"It's gentler there and more peaceful," said Medina, who plans to begin building a large home with an indoor pool here next year.

To help persuade Trujillo to buy, Tusell gave a tour of the Parque Residencial Riverside property to members of his family in El Salvador. Trujillo could not travel back to El Salvador and return to his home in Lanham without getting special permission from the U.S. government because he is not yet a permanent U.S. resident. Trujillo's sister-in-law and brother walked the property, recording a video for Trujillo. Then Tusell took the sister-in-law and brother to her office and let them call Trujillo in Maryland.

"I give them an international call so that they can personally tell their family member their impressions of the project -- if they liked it or didn't like it," Tusell said. "This is practically the close of the sell. I know that I have the sale."

Trujillo, who owns Trujillo Paint Services, bought a lot and a half. So did one of his brothers living in Maryland. To buy the land, both borrowed money from Riverside's owner, Constructora Universal, at a 12.5 percent interest rate.

They agreed to pay about $1,000 for the down payment and minimum monthly payments of about $400. Most of the buyers have incomes of more than $3,000 a month, Tusell said. Trujillo said he paid off his first lot early by using a portion of his savings. He plans to begin building his home here in a couple of years.

A Fledgling Market

At the end of the civil war in El Salvador in 1992, property was almost worthless, said Jorge Hurtado, a director in the Miami office of international real estate company CB Richard Ellis Group Inc.

Prices began to rise as the fighting stopped and, over the past 10 years, land values have more than tripled, real estate agents said. But home prices here are still much lower than they are in the United States. Prices vary widely. A two-bedroom home outside of the capital city can cost $20,000 or less. But a home with five bedrooms in downtown San Salvador can cost about $200,000. Interest rates can be high because American banks don't lend money for such mortgages and interest rates in El Salvador are typically a few points higher than those in the United States.

Medina, who travels to El Salvador a few times a year, met Tusell at a fundraiser for earthquake victims here. But for those who don't have agents they know, buying can be risky. Real estate agents are not licensed in El Salvador, and few laws protect buyers.

Since the late 1990s, some unscrupulous real estate agents from El Salvador have come to U.S. cities selling nonexistent projects, according to Marida B. de Alfaro, head of the Salvadoran Realtors Association in San Salvador. Other brokers have sold land with liens or taken a buyer's down payment without handing over the deed, she said.

Alfaro said victims often have little recourse because the foreign real estate agents are not licensed in the United States and they can easily disappear in El Salvador.

The four-year-old Salvadoran Realtors Association is working on a plan to regulate the industry by creating an official Realtor's license and curriculum. The group is currently meeting with other real estate organizations in Central America to create a uniform plan. Alfaro suggests buyers contact her association for help finding a reputable agent or visit the property themselves.

Under Construction

Tusell has personally shown off Riverside to many buyers, something she loves doing. One Saturday this summer, Tusell zipped through the development in her silver BMW, passing the handful of homes already built and the lots owned by Medina and Trujillo.

She pointed out the community amenities to a visitor.

"Tan linda, ves!" (It's so lovely, you see!)

She stopped by a house under construction to look in on the property. Inside sat wooden furniture still wrapped in plastic and new appliances that had been shipped from the United States. Fans and an air conditioning unit had been installed to cope with the year-round tropical climate.

Outside, a contractor was cutting a brown Mexican-style tile that he planned to lay inside the four-bedroom brick house.

"Going to work in the United States makes it possible to live in a house like this," said the contractor, Miguel Angel Joya, as he stooped over the tile.

The owners of the house, he said, live in Maryland.

© 2004