The State of Multicultural Homebuyer In Today's Market

by Gonzales Group

Turn on the nightly news, open the morning paper or click on your favorite news blog and the story of the housing market and credit crisis is front and center. We now know the effects of this down turn and indeed we are entering “uncharted waters” in many ways. But what does this mean to the growing Multicultural markets that we believe will be the new economic power source for the housing market moving forward?

During the last 15 years, home ownership rates soared: The U.S. reached a homeownership rate of 75% and the gap for Multicultural homeowners was closing at respectable rates.

Today’s market conditions can potentially reverse that trend and leave one to question what will become of the Multicultural consumer segment? Do the current market conditions present an opportunity for sustainable homeownership in these communities?It is estimated that in the next several years, the Hispanic population in the U.S. will reach 18 million with many entering the prime home buying age bracket of 25-44. During that same time period, the retiring baby boomer population is expected to be leaving the housing market. Supply of affordable housing, the influx of bank foreclosures into the market, the increase in housing starts coupled with declining home prices has created a supply of affordable housing stock that means new opportunities for Multicultural homebuyers who were left out of the market during the boom years when prices soared out of reach for this consumer segment.

New Loan Products in a Changing Regulatory Environment

The tightening of the credit markets has changed the landscape of conventional loan products available to many first time homebuyers and will mean less flexibility in down payments and underwriting guidelines. The migration to government sponsored FHA financing has already become the order of the day for many including the Multicultural community. While tighter restrictions in mortgage funding will help the sustainability of homeownership and stability in the housing market, the short-term effect means a longer qualifying time to homeownership for many in the Multicultural markets.

The Real Estate Practitioner

Historically, downturns in the housing market mean a downturn in the number of real estate agents in the business. Many associations of Realtors are estimating that their memberships will decline in the near term while others have already experienced significant attrition rates. Sales agents that stay in the business will require skill sets that they have not utilized in the past to keep pace with the opportunities that the evolving home buying market will require as we leave this current downturn and return to a more stable market. Awareness of the new economic power source in the Multicultural markets and learning the skills that are required for this consumer will be essential.

New Opportunity

Reaching the Multicultural consumer requires providing reliable products, prompt and responsive service, front-line staff that are empowered to resolve problems, knowledgeable staff, empathy with the customer, and community trusteeship. To be effective, your strategy requires understanding the psychographics of the various cultures to accommodate nuances and subtleties.

The opportunities for the Multicultural consumer and the real estate professional in a seemingly bleak market have only begun to present themselves. With a growing population and buying power, the new economic power source of the Multicultural homebuyer will only be fueled by decreasing trends that has not been seen in over a decade in many markets.