The much anticipated 2010 Census will accelerate and confirm what has long been anticipated: the U.S. is a nation on the brink of a transformative profile change. Every state in the U.S. has been impacted by the population growth of the multicultural markets. In fact, the multicultural community is the fastest growing population segment in the nation.
Overall buying power, which is defined as the total post-tax, personal income of residents that is available to spend on goods and services, jumped 148 percent for the period between 1990-2008, according to the Selig Center for Economic Growth at the University of Georgia. In 2008, the combined buying power of African Americans, Asian Americans and Native Americans exceeded $1.5 trillion; more than triple the 1990 level of $456 billion. That's a gain of $1.1 trillion, or 231 percent. Hispanic buying power, however, jumped 357 percent, while that of blacks increased 189 percent, the study says, continuing the upward mobility of minorities in the United States.
What does this mean to real estate professionals? It means that the multicultural homebuyer in your near term and extended future will play a major role in your business.
Over the next five-years, total households are forecasted to grow about 5%, which will add about 5 million new households in the U.S. Multicultural market homebuyers will make up a majority of this growth. For example:
Hispanics, the largest segment, is expected to grow about 17%, resulting in roughly 1.5 million new households, which constitutes about 28% of the total five-year growth estimate.
African-Americans, the second largest segment, will grow by 8%, adding 1 million new households and will constitute about 20% of the total five-year growth estimate.
Asian-Americans, while expected to grow at 17%, will result in about 600 thousand new households or 12 % of the total five-year growth estimate.
As a real estate professional, how do you accommodate the increased buying power and growth of the changing population? The answer is simple. It requires attention to cultural awareness and education. Many multicultural homebuyers have little, if any, point of reference for what a real estate professional is and the role they play in the transaction. Educating this new consumer of the Realtors role in buying a home is critical to bridging the cultural gap with multicultural homebuyers.
One thing is certain………the home buying landscape is changing and if you are going to capitalize on it, you must adjust your business plans and marketing approaches to accommodate the new consumer. We encourage you to visit the Gonzales Group website for information about marketing to multicultural consumers.
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