ORLANDO, Fla.–Immigration and the growth of minority groups have helped the nation to weather economic recession. And the continuing surge in population and buying power among minority and immigrant groups should not – and cannot – be overlooked, experts said during a cultural diversity panel today at the National Association of Realtors’ annual conference.
Jeffrey Humphreys, director of economic forecasting at the Selig Center for Economic Growth in Athens, Ga., said that the Hispanic population in America has an estimated buying power of $686.3 billion this year, and is projected to reach $992.3 billion in 2009. From 1990-09, the buying power among Hispanics is projected to grow 347.1 percent.
Humphreys, a panelist during the forum, presented a preview of a study titled, “The Multicultural Economy, 1990-2009,” which highlights buying power among African-Americans, Asians, Native Americans and Hispanics. The economic clout of the Hispanic population “will determine the success and failure of many U.S. companies, both large and small,” he said.
“Their economic growth is really surging,” Humphreys said of Hispanics and other minority groups. “These minorities have muscles.”
The forum presented a window to the growing diversity of U.S. home buyers, and the importance of immigrant and minority home buyers in sustaining the nation’s housing market. Panelists also referred to a gap between white and non-white home-ownership rates as an opportunity for real estate professionals who can improve their business by working to level the playing field.
Hispanics account for about 14 percent of the nation’s population, and their buying power is most concentrated in California, with $198.5 billion; and Texas, with $119.3 billion. Florida, New York, Illinois, New Jersey, Arizona, Colorado, New Mexico and Georgia, in that order, are also states with a high concentration of Hispanic buying power, the Selig study found. Within four years, Hispanics are expected to outpace African Americans as the nation’s largest minority market, Humphreys said.
This study defines Hispanics as persons of Mexican, Puerto Rican, Cuban, Central American or other Spanish/Hispanic/Latino culture or origin, and notes that Hispanic is considered an ethnic category rather than a racial group.
Brian Surette, an economist for Freddie Mac in McLean, Va., presented preliminary findings from a study of home-ownership trends in Mexican-heritage households. The number of Latino households is expected to grow from 10 million in 2003 to about 13 million in 2010, Surette said, and 1.5 million to 2 million Latino families are expected to purchase their first homes from 2003 to 2010.
Even so, the rate of home ownership among Latinos continues to lag behind the national average, Surette said, and is projected to reach 48 percent to 49 percent in 2010. The home-ownership rate for whites was about 74 percent in 2003.
The total Latino population grew 58 percent, from 22 million to 35 million between 1990-2000, and is expected to reach 44 million by 2010.
In interviews with a group of 1,200 renters and homeowners in Mexican-heritage households in Los Angeles, Houston and Atlanta, researchers found that about half of the renters interviewed arrived in the United States after 1991, and about half are not permanent residents.
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“Nativity and an ongoing relationship to Mexico are important,” Surette said, and many of those interviewed send money to friends and relatives in Mexico – a median of $4,434 per year among those renters interviewed and $3,115 per year among those homeowners interviewed, according to the preliminary findings. Financial knowledge and familiarity with U.S. financial institutions was far more common among the homeowners interviewed than it was among renters, Surette said.
Oscar Gonzales, director of the Asian Real Estate Association of America and president of The Gonzales Group, a consulting group in Sugar Land, Texas, presented the results of an Asian-American home-ownership study, which was based on Internet and telephone responses collected in September and October.
About 85 percent of respondents to the survey reported that the average number of members in an Asian household consisted of three to five persons, and 17 percent of respondents said their Asian and Asian-American clients belong to households consisting of three or more families. Also, half of the respondents said that Asian and Asian-American home buyers who they worked with are “not familiar” with first-time home-buying programs.
Respondents cited language and cultural barriers; lack of knowledge of the home-buying process; unverifiable income; and lack of credit as major obstacles facing Asian-American home buyers.
The survey received 199 responses, mostly from association members. About 60 percent of the respondents are Asian Americans, and 79 percent are real estate agents and brokers.
During a question-and-answer session that followed the panelists’ presentations, several audience members asked about progress in developing bilingual forms relating to real estate transactions. Real estate groups have worked to make these forms available as advisory documents in some states, panelists said, though they advised that more progress may be needed to standardize such bilingual forms and to make them more available to real estate professionals and consumers alike.
Panelists suggested that marketing toward minority markets in areas with substantial minority populations, and hiring bilingual staff to serve clients who do not speak English as their primary language, can help to bolster business. Researching available incentive programs for home buyers can also serve prospective home buyers, panelists and audience members suggested.
Gonzales said that a strategic approach to minority marketing is usually the best plan. “Don’t throw spaghetti at the wall and hope it sticks,” he said. Humphreys agreed, “You have to do your homework.”
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