Steve Peterson regularly brokers multimillion-dollar commercial real estate deals in the Bay Area and Sacramento. He’s the president and CEO of Infinity Investments, an Oakland brokerage; he heads up two prominent industry organizations; and he’s only 36.
These accomplishments aren’t the only things that set him apart. He is one of less than a handful of African-American brokers in the East Bay.
Only a tiny percentage of real estate agents in the U.S. are people of color, and the same is true in Berkeley and the East Bay despite the relative diversity of the area, industry leaders say.
Five percent of the country’s 1.3 million Realtors are African-American, 5% are Asian and 9% are Hispanic, according to the 2017 Member Profile published by the National Association of Realtors.
The typical Realtor is a 53-year-old white female, according to the association’s research.
Worse yet, it appears that little progress has been made over the past 15 years. In 2003, 2% of the nation’s Realtors were African-American, 2% were Asian and 5% were Latino or Hispanic, according to the association.
Out of approximately 500 or so brokers in the East Bay, Peterson estimates that only 2-3% are African-American.
“It’s a very rare bird to see commercial African-American brokers,” Peterson said.
Why do so few people of color go into real estate?
With regard to African Americans, “here’s my take on it,” Peterson said. “In the old market — 2003 through 2006 — there were a lot of black agents. When the market crashed, it took out a lot of black agents.”
The broker said the home ownership rate for African Americans was much higher in 2006, “and I would venture a guess that the number of real estate agents was a lot higher. We are still recovering from (the market crash). A lot of people got hurt. It damaged them in every way you can fathom.”
Statistics from the Urban Institute seem to bear Peterson out. Homeownership for blacks fell from 45% in 1990 to 33% in 2015, half the rate of whites in the same age group.
With low black home ownership, African Americans are less likely to need the services of real estate agents and less likely to think of real estate as a potential career.
“It’s a very rare bird to see commercial African-American brokers.”
— Steve Peterson
Also, real estate is all about connections. Black agents starting out are at a disadvantage because they’re not as likely to know wealthy people.
Getting started in real estate can be brutal. Beginners, and even seasoned agents, can go for three or four months without a sale. In a commission-based system without a steady paycheck, rookie agents need a cushion —something young people of color are less likely to have.
There are “desk fees,” typically a few hundred dollars a month, to conduct business in a real estate office. And several hundred dollars a year for membership in national, state and local Realtor organizations, mandatory for access to multiple listing services that provide necessary information to agents.
Peterson himself beat the odds, handsomely. He was born and raised in East Oakland and graduated from Oakland High in 2000. He went on to attend San Jose State and now lives in the Oakland hills.
His focus is investment property sales and he sells apartment buildings. His deals include the sale of a $3.4 million building in Stockton, 1025 North Madison St., last year, and he is currently working on a $5.7 million deal in Oakland.
One of his talents appears to be a genius for seizing the moment. When the mortgage meltdown hit in 2007 and 2008, he realized it offered an unparalleled opportunity for investors to snap up buildings at low prices.
Peterson said one of the keys to his success was mentorship.
“I apprenticed under a broker. He taught me how to write contracts, supervised my deals so I could be a regular agent,” he said.
In a similar vein, Angelo Raymundo, a residential real estate agent with Red Oak Realty in Oakland, is mentoring his former assistant, who is also Asian. Raymundo is actively trying to encourage other Asians to enter the field.
“I think maybe there is just a little bit more to prove because the majority of real estate agents are Caucasian.”
— Angelo Raymundo
“My assistant, who just got her license, is Korean and a very hard worker,” Raymundo said. “I’m guiding her through the process. I’ve often told her, ‘The competition is so stiff that you have to work much harder than your average 53-year-old Caucasian lady,’ referring to the fact that the typical residential agent is a white woman according to the National Association of Realtors.
“I think maybe there is just a little bit more to prove because the majority of real estate agents are Caucasian,” Raymundo said.
“If you look at the statistics, African Americans, Latinos, Asians have a much smaller percentage of homeowners when you compare it to Caucasians’ numbers. So I can see why people who are not white may have a little bit more of an issue or lack of finance to get through the first few years of establishing yourself as a real estate agent,” he said.
For home ownership rates by race, in the fourth quarter of 2017, white householders had the highest rate of homeownership, at 72.7%, according to the U.S. Census. The rate for Asian, Native Hawaiian and Pacific Islander householders was 58.2% and black householders’ rate was 42.1%.
Raymundo said it takes about three years to get established in real estate and with real estate, “you have to work ten times as hard just with the amount of competition out there. People of color might have trouble getting white clients to trust them enough to help them through this type of transaction where you’re dealing with hundreds of thousands of dollars — even millions, in the Bay Area. I hate to admit it but that does play a part in some of the decision-making process when consumers decide who they want to work with,” the Filipino agent said.
He said, upon reflection, he realized that at least half of his client base from the past 10 years has been non-white.
Raymundo said he knows a couple of Asian agents who focus their practice on Asian clients. “It makes sense because they (clients) feel comfortable working with people from their culture. If they don’t speak English, it’s someone who literally speaks their language.”
On the reverse side, however, Raymundo said, “there might be some people who feel like a person of color who has a strong accent might not be able to represent them. It’s a perception, potentially a bias.”
The Realtor also said he found it likely that there are more agents of color in the Bay Area because of the diversity here. Neither the Equal Employment Opportunity Commission nor Tim Ambrose, president of the Bay East Association of Realtors, could supply numbers as to the percentage of people of color in the industry in the East Bay or the Bay Area.
Ambrose said his take on the small percentage of African American Realtors is that it is a reflection of African Americans in the country as a whole.
“We are only 12% of the population in the U.S.,” Ambrose said. “Here in California, we’re only 6.5%.”
He added, “I definitely agree with both their (Raymundo and Peterson’s) observations along with my perspective. When you combine all these things, it’s clear why there is a small number.”
Statistics suggest that the Hispanic community, like the black community, took a hit during the recession, according to a report from the National Association of Hispanic Real Estate Professionals.
The high point for homeownership for Hispanics was 49.7% in 2006 and 2007, according to the report. In 2017, that number was 46.2%.
Both the language barrier and the digital divide mitigate against homeownership for Hispanics, said Pamela Oettel, a real estate agent with Coldwell Banker in Berkeley. Some Hispanics are not yet online, and some don’t speak English, she said.
Oettel, who was born in Panama, works closely with Hispanic clients to make sure they understand what they are signing and how it affects them.
“The purchase agreement is in English. It is a legally binding contract, and you’re putting up a lot of money,” Oettel noted. “The pest report, the disclosures — everything’s in English.”
She said the digital barrier is the big barrier for many Latinos, because the world of home buying and selling is online.
Despite the difficulties, Oettel is upbeat about her role.
“I realize there are very few people of any other ethnicity or color (than white) in the real estate industry, but there are successful people in all colors,” Oettel said. “You just have to have faith in yourself.”
In fact, while the numbers may seem discouraging at first, homeownership is on the rise for Hispanics, according to the association’s report. The 46.2% number is up from 46% in 2016. This is especially significant because the percentages declined for the country as a whole, the association said.
Peterson, too, is upbeat. Grateful for the mentoring he received, he is now giving back, going all out to get young African Americans involved in real estate.
“We’re the black brokers’ association. We were formed 1947 and called realtists as opposed to Realtors,” Peterson said. “Once upon a time blacks and other minorities were not allowed to join Realtors. The (multiple listing service) was a book and if you didn’t have access to that book you were on the outside looking in.”
Nowadays, the organization has become an advocate for democracy in housing, holding community events to educate members of the black community about real estate and lobbying the California legislature and Congress, Peterson said.
“NAREB championed the Rumford Act,” Peterson said, referring to the Rumford Fair Housing Act, passed in 1963 in California to help end racial discrimination by property owners and landlords who refused to rent or sell to people of color.
Now, NAREB is expanding to focus primarily on the millennial generation and get them trained in the real estate business, Peterson said. The organization has formed the Young Realtists Division, or YRD.
“It’s taken fire in LA and we are starting it in the Bay Area,” he said.
Peterson is also president of NorCal CCIM. The acronym stands for Certified Commercial Investment Member. The 40-year-old chapter has about 250 members and offers networking and “MBA-level” classes, he said.
The organization offers cultural diversity discounts and scholarships for its courses to encourage people of color to participate.
“That organization staunchly promotes diversity and puts its money where its mouth is,” Peterson said.
Despite the barriers, the broker said more and more African Americans are entering the field of late.
“There is very significant light at the end of the tunnel,” he said.