Gonzales Group Multicultural Blog

Building Trust with Multicultural Homebuyers

2010-12-14T15:23:00.001-08:00

by Gonzales Group

REALTORS® trying to grow their business in the multicultural markets need only slightly modify their approach to marketing according to Dan Carrillo Managing Partner of the Gonzales Group.

“REALTORS® that who want to grow their multicultural business must begin by investing time, effort and resources to better understand the nuances of the multicultural consumer. A good starting point is taking the time to learn about their culture, demographics and the needs of this consumer segment. Agents and Brokers must gain as much cultural knowledge as possible prior to undertaking an initiative that services multicultural customers,” says Carrillo.

One way to bridge your services with the multicultural customer is to become a trusted advisor. While this word has been overplayed in today’s market, for the multicultural consumer the trusted advisor is at the center of the transaction. This trust will develop when the homebuyer senses:

• You help to alleviate his/her stress and anxiety via the information you provide
• The expertise you have, and
• Your commitment in helping them reach their goal of owning a home

Attaining the position of trusted advisor is a necessary ingredient for facilitating sales and insuring a stream of profitable referrals and repeat business.

Carrillo states, "Many first generation multicultural consumers don’t understand the roles and responsibilities of the listing agent or buyers agent and have no point of reference to the home buying process. As their REALTOR®, it’s important to help your client understand what you will do for them. Break the process down for your client by explaining your role. More importantly, let them know you are licensed—you have taken an oath to uphold a Code of Ethics and that you are a member of a professional organization of real estate professionals.”

"As a REALTOR®, building trust begins with your buyers searching for a home and making sure your clients understand how much home they can afford. Often times Multicultural consumers embark on their home buying journey unfamiliar with the financing process. By demonstrating your knowledge of the different types of financing, experience with lenders, and the ability to navigate them to the right program will help build your credibility as a trusted advisor,” Carrillo says.

"Every multicultural consumer is different, he added. “We’ve seen a lot of demographic changes in the first time homebuyer profile, making it important to be mindful of the different cultures residing in your local community. There’s tremendous opportunity in servicing multicultural homebuyers, and if done right, will lead to referrals with qualified multicultural homebuyers in the future."

Cultural Attitudes, Practices, and Communication for the Real Estate Professional

2010-11-30T14:34:00.000-08:00

by Gonzales Group

Many real estate professionals are experiencing a transformation in the profile of the homebuyers coming through the door. This new homebuyer is not always receptive to existing sales techniques and traditional marketing approaches do not seem to do much in bringing them into the home buying process. The solutions require some getting back to basics. Adapting to a changing society takes a real estate professional that is willing to step outside the box and create their own organizational culture, tools, and processes to adapt to this new world.

Successful teams and organizations are those that find ways to let go of their own biases and understand that it takes knowing the multicultural consumer inside and out. Given the right social processes, such as trust, time, and cultural immersion, means you can successfully service the multicultural home buyer and expand the customer base beyond the traditional home buying segment that is often over farmed.

New opportunities exist for real estate professionals, provided they keep pace with cultural trends in the marketplace. In addition to maintaining awareness, practitioners must learn about new cultures and in particular, learn how to develop relationships with people who do not fit familiar patterns. Real estate professionals interested in broadening their understanding of diversity and expanding their market share need to:

• Build and expand their understanding of cultural differences to serve clients better and fairly.

• Learn how to offer appropriate services.

• Understand and enjoy other cultures to build relationships; a prerequisite for working with most international or immigrant clients.

• Understand and appreciate other cultures through open lines of communication.

Study Shows Emerging African Immigrant Market Segment

2010-11-08T11:20:00.000-08:00

by Gonzales Group
Source: New American Dimensions & The African Chamber of Commerce

U.S. African Chamber of Commerce Released First African Consumer Segment Study with 50 Billion Dollar Purchasing Power. African immigrants are a separate and unique group that is growing in number in the U.S. These consumers maintain connections to their friends and family in their native countries as well as maintain ties to native traditions, including food, music, and entertainment.

These insights come from an exciting new comprehensive study by Los Angeles-based multicultural research firm New American Dimensions in conjunction with The African Chamber of Commerce, Dr. Bruce Corrie, The Minneapolis Foundation and Aguilar Productions. From multiple focus groups in Los Angeles, New York City and Minneapolis to a four-market quantitative survey of 393 African immigrant adults in California, Minnesota, Washington D.C. and New York, this study captures unique insights into the daily lives and thoughts of this highly educated and successful group. The study is supplemented by a video snapshot of Africans to personify the findings from the research and bring them to life.

Highlights of the study include:

The African immigrant consumer market in the U.S. is a unique cultural market segment which is largely untapped. Within this market, there is a unique Islamic market segment which is also untapped. Marketers have an opportunity to deliver culturally appropriate products to this sub-segment such as in the food and beverage category.

African immigrants prove to be sensible shoppers, shopping around for the right price and the right product. Younger shoppers are more prone to shopping for products recommended by family and friends. Supermarkets lead the list of stores patronized by African immigrants. Discount stores and low-end department stores are the top shopping venues for clothes and accessories.

Most African immigrants have their own checking and savings accounts and about two-thirds have credit cards. They also tend to have auto and medical insurance and a few have long-term care insurance.

Email and international calls are heavily used for keeping in touch. Younger Africans are also the heaviest visitors to internet social groups.

African immigrants spend more hours watching English language media than African language media, most probably due to availability of in-language options. Overall, CNN tops the list of favorite English-language TV channels followed by ABC, Fox and NBC. Yahoo and Facebook top the list of favorite websites.

Most African immigrants own a personal computer and a DVD player. Younger immigrants are high consumers of English-language movies. Almost all Africans interviewed own cell phones.

Success is often described in meaningful, far-reaching terms. African respondents emphasized the need to give back to their community. Most send money to relatives back home on a regular basis, but when talking about success, they mean giving on a larger scale, more often in terms of the community-at-large.

"There are over 1.4 million Africans living in the U.S. and these consumers possess very high educational attainment and incomes. Additionally, this is a segment with a powerful sense of identity and pride in being African," said David Morse, President and CEO of New American Dimensions, a firm which provides customized multicultural consumer research.

"USACC is the leading advocate organization for African businesses and entrepreneurs. This is a growing consumer segment within the multicultural market - one that cannot be overlooked," said Martin Mohammed, President of the U.S. African Chamber of Commerce.

Strategies for Growing Market Share Through Customer Segmentation

2010-10-07T09:14:00.000-07:00

By: Gonzales Group

Growing your business in the midst of a major economic correction is not the first thing that comes to mind for most real estate organizations. Organizations often take a defensive approach and adopt a "preserve and sustain" mindset that ignores or discounts the opportunities that present themselves. Pinpointing external change and detecting customer patterns allows you to make sound judgment about where the world is going and putting your business on the offensive to capitalize on changes, according to Ram Charan, author of Execution: The Discipline of Getting Things Done.

Many in the industry tell us that they are experiencing a transformation in the profile of the homebuyers coming through the door. This new homebuyer is not receptive to existing sales techniques and traditional marketing approaches do not seem to do much to bring them through the door. The solutions require some getting back to basics. Here are four tips for growing market share through multicultural markets.

1) Capitalize on the demographics of your local market.

Understand the new economic powerbase that is the multicultural consumer. If you see growth in the Asian-Indian, Hispanic or African-American populations in your community, identify their sub-segments (i.e., Mexican or Puerto Rican, Chinese or Korean), examine their age groups and median household incomes and identify qualified home buyers to begin formulating a marketing plan that accommodates the needs of this home buying segment.

2) Develop products and services that meet the needs of the multicultural consumer.

Deliver services that take into account the characteristics of your multicultural consumers. Multigenerational households, religious practices or varying levels of language proficiency call for different approaches. Know that in some cultures, certain colors and numbers can be offensive or have religious implications. Work to understand the nuances of your new customer base. Using mainstream marketing and advertising tactics can have little relevance if the multicultural home buyer has no point of reference for U.S. real estate and business practices.

3) Get the right infrastructure in place.

Multicultural consumers and real estate professionals require language, religious and philosophical considerations if you are going to win them both as customers or team members. Make sure your sales team, receptionist, lender and title partners share the same commitment to the multicultural home buyer to make certain you maintain your role as the trusted advisor.

4) Market your message.

The one-size-fits-all approach to marketing worked great 20 years ago -- but the world has changed. Understand and address your target audience using the communication vehicles they prefer. Carefully research which media work best. Some cultures prefer print while others prefer radio or television. By strategically utilizing your marketing dollars you can avoid missing out on qualified homebuyers.

Coloring Outside the Lines to Expand Market Share and Profitability

2010-09-22T16:10:00.000-07:00

Source: The Gonzales Group

What does it mean to "Color Outside the Lines?" It means moving beyond and outside the doldrums of the norm. It does not mean being defiant and anti-institutional. It means finding the strength of an organization and leveraging it, even if it means you color outside the bounds of your defined goals and objectives.

Companies with the greatest strength in a mature industry tend to be the least successful in fostering new ideas and processes and often suffer from "Innovator's Dilemma." We see and hear about organizations like GM, Polaroid, Timex, IBM, and others who were innovators by all accounts and "used to" lead in their fields, but their culture hardened and they "colored only within the confines of the lines" to make things stay the same.

Many organizations utilize this same approach when it comes to Multicultural consumers. They elect to maintain the same approach and marketing methods that have worked for them in the past but that has little relevance to the Multicultural consumer base.

Coloring outside the lines is an individual exercise and begins with a little self-analysis. Don't start by blaming the decision makers but try to understand what play book they are reading from and color accordingly. Our experience at the Gonzales Group found that the market intelligence and the know-how for Multicultural outreach begins on the front lines and migrates upward. It is these front-line individuals that see the opportunity in the Multicultural consumer segment long before the folks at the top take notice.

An Evolving Environment

The twenty-first century broker, agent, employee, and manager will need to know more about their customer base than his or her twentieth century counterpart does. Successful organizations in the twenty-first century will have to be more in tune with the Multicultural consumer. This includes accommodating cultural nuances that accompany the rapidly changing demographic profile we see taking place in our respective communities.

Stability is no longer the norm and most experts agree that over the next few years the business environment will become even more volatile. Albert Einstein said, "We can't solve problems by using the same kind of thinking we used when we created them." As the profile of the home buying consumer changes, so must the marketing, advertising and outreach we utilize to increase our market share and profitability.

Coloring outside of the lines only helps to move us and the organizations we represent forward!

The Business Case for Outreach to the Multicultural Markets

2010-08-24T15:42:00.000-07:00

By: The Gonzales Group

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.

Managing the Lending Process for Your Multicultural Customer

2010-08-03T17:41:00.000-07:00

By: Gonzales Group

Carefully managing the multicultural home buyer’s loan process is a great way for REALTORS® to grow an often overlooked customer segment. The multicultural home buying segment is outpacing the general market in both population growth and buying power according to new figures from the U.S. Census Bureau.

Recent changes in lending practices and strict qualifying criteria have presented additional challenges for multicultural home buyers given their limited credit history, non-traditional sources of income such as part-time jobs, and cultural aversions to debt and credit to name a few.

Securing financing for multicultural buyers can be easily managed by following a few simple steps. Brokers that have been successful in servicing multicultural home buyers found demonstrating trust and carefully facilitating the entire transactional process as sound best practices when working with multicultural home buyers.

Demonstrate Trust

Multicultural home buyers look to the REALTOR® as advisors throughout the real estate transaction. Trust is one of the most important dynamics real estate professionals need to understand and embrace when working with multicultural home buyers.

Many REALTORS® have reported that transactions were lost when multicultural home buyers were mistakenly placed with lenders that did not understand the cultural and language nuances. This resulted in a loss of trust in the REALTOR® whose role serves as a trusted advisor.

Lenders not being aware that a down payment being gifted from extended family overseas is the norm or that not addressing elder members of the family first during the loan process are a few cultural missteps that can result in lost clients and commissions. Some real estate brokerages have addressed this challenge by having in-house lending services to insure the team has the cultural expertise to accommodate the needs of the multicultural consumer.

Facilitate the Process

It is important that you remain engaged with your multicultural home buyer during the loan process as they see the buying, lending, survey, inspection and appraisal as being one in the same and will look to you to guide them through the transaction. Multicultural home buyers expect REALTORS® to handle the transaction from beginning to end and the mortgage lender is generally viewed as an extension of your service. Not monitoring the progress of the transaction and providing updates to your multicultural home buyer can be viewed as abandonment of a relationship. In high context cultures where relationships come before business, this can be financially costly and result in lost referrals.

Today’s real estate market can be challenging but it is important to remember that there are tremendous opportunities in servicing and accommodating the needs of an overlooked customer segment such as the multicultural home buyer.

If you expand your service to include this growing segment of the home buying population, make certain that you partner with a lender that understands the needs of the multicultural consumer and that they have the services and committed team that shares in your professional goal of expanding your customer base.

How the Great Recession Has Changed Life in America

2010-07-13T15:03:00.000-07:00

By Pew Research Center

Of the 13 recessions that the American public has endured since the Great Depression of 1929-33, none has presented a more punishing combination of length, breadth and depth than this one. A new Pew Research survey finds that 30 months after it began, the Great Recession has led to a downsizing of Americans’ expectations about their retirements and their children’s future; a new frugality in their spending and borrowing habits; and a concern that it could take several years, at a minimum, for their house values and family finances to recover. The survey also finds that more than half of the adults in U.S. labor force (55%) have experienced some work-related hardship — be it a spell of unemployment, a cut in pay, a reduction in hours or an involuntary move to part-time work. In addition, the bursting of the pre-recession housing and stock market bubbles has shrunk the wealth of the average American household by an estimated 20%, the deepest such decline in the post-World War II era, according to government data. While nearly all Americans have been hurt in one way or another, some groups have suffered more than others. Blacks and Hispanics have borne a disproportionate share of both the job losses and the housing foreclosures. Young adults have taken the biggest losses on the job front. Middle-aged adults have gotten the worst of the downturn in house values, household finances and retirement accounts. Men have lost many more jobs than women. And across most indicators, those with a high school diploma or less education have been hit harder than those with a college degree or more. Whether by choice or necessity, many Multicultural consumers have already significantly scaled back their pre-recession borrow-and-spend habits. According to government data, household spending has gone down, savings rates have gone up, consumer credit has remained stable and mortgage debt has plunged during this recession.

The survey finds that the public is starting to see some light at the end of the tunnel. More than six-in-ten survey respondents (62%) say they expect their personal financial situation to improve in the coming year—the most optimistic reading on this question since before the recession began. Likewise, about six-in-ten (61%) say they believe the damage the recession has inflicted on the U.S. economy will prove to be temporary rather than permanent. this report sets out to present a comprehensive balance sheet on the Great Recession by looking at economic outcomes, behavioral changes and attitudinal trends among the full population as well as various subgroups. Our analysis is drawn from two sources—a comprehensive Pew Research telephone survey of a representative, national sample of 2,967 adults conducted from May 11 to May 31, 2010.

One striking finding of the survey is that some of the demographic groups that have suffered the worst economic hits are also the ones most optimistic about a recovery—both for themselves personally and for the U.S. economy as a whole. Blacks and Hispanics are more upbeat than whites. The young are more optimistic than middle-aged and older Americans. And Democrats are more upbeat than Republicans, even though Democrats have lower incomes and less wealth and have suffered more recession-related job losses. These group differences are apparent not just in responses to specific survey questions, but also in a set of statistical models that examine the independent impact of race, partisanship and age on the likelihood that a respondent will express optimism on six different attitudes about the economy tested in the survey, controlling for a range of demographic variables and recession-related experiences.

http://pewsocialtrends.org/pubs/759/how-the-great-recession-has-changed-life-in-america

Manage Your Multicultural Customer Experience

2010-06-09T07:06:00.000-07:00

By Gonzales Group

As the real estate industry continues to settle, it is critical that real estate brokers demonstrate control of their Multicultural customers financing and home purchase customer experience. Without doubt there continue to be changes taking place daily in the mortgage industry that it’s nearly impossible to keep up. It used to be unheard of in lending circles to scrutinize well qualified borrowers; buyers with excellent credit, stable employment, solid income, and robust savings. Multicultural borrowers, which account for almost one-quarter of potential buyers in the aquistion of a home, continue to have challenges securing financing to purchase a home.

At the Gonzales Group we have done some exploratory research with several Multicultural brokers who continue to successful in finding financing for their Multicultural buyers. The following are best business practices to be successful in managing your Multicultural customer lending experience.

1) Control the Process for Your Multicultural Consumer

If you do not offer a competitive in-house financing option for Multicultural homebuyers, make sure you are working with a seasoned professional (preferably a Multicultural professional) loan officer that can work with your client to ensure they don’t get trapped in the changes occurring daily in the mortgage industry. If your office has an affiliated mortgage company, and you are not the principal owner, control of the Multicultural customer experience becomes a shared responsibility. It is important to demonstrate to your client that you are in control of the mortgage experience. Multicultural homebuyers do not view their home purchase continuum as ancillary. Multicultural homebuyers expect their real estate agents to handle the sale from beginning to end. This means that its imperative that your mortgage provider offer your Multicultural buyers multiple financing options and that your mortgage provider understand, anticipate your Multicultural consumer’s every financial needs.

2) Demonstrate Knowledge and Expertise to Your Multicultural Consumer

Multicultural buyers and sellers look to their agents as experts in the entire real estate transaction. This includes the financing process. By having an in-house mortgage company, you can ensure that your mortgage team has the cultural and bilingual (if necessary) expertise to deal with the Multicultural consumer and evolving industry to be able to manage these changes with your agents. By keeping your agents well informed of the evolving changes, their buyers will be informed and more likely to qualify for a home loan and sales will close as expected.

Today’s real estate market is challenging, but there is tremendous opportunity in tapping into the Multicultural market. Take advantage of this opportunity to make sure you partner with anyone whose interests go beyond the scope of your business. The responsibility for providing legendary services rests with you.

Multicultural Marketing The Best Way to Stay Relevant

2010-05-18T15:12:00.000-07:00

by Gonzales Group

As U.S. consumer markets evolve and grow, multicultural marketing has become increasingly critical to a business’s prospects for success. It’s obvious that the demographic tide is turning. Businesses that take the traditional approach and ignore these changes now risk alienating the very ethnic segments that will drive sales in the coming years.

So how should marketers in the real estate and financial services industries engage multicultural consumers? Here are some tips from the Gonzales Group to get you started.

Be Informed

The Gonzales Group recommends that REALTORS® devote the time and resources necessary to truly understand the vast opportunity that exists in growing multicultural markets. Immerse yourself in the culture, get involved in the communities where multicultural consumers live and work, and try to see the world from these consumers’ point of view. This will make it easier for you to make valuable personal connections within these communities — connections that could last for years to come. Brokers should encourage their agents to beef up their knowledge of ethnic diversity in order to help them better serve the multicultural market. This commitment will help agents serve consumers in a culturally relevant and appropriate manner, while remaining true to the company’s core values. Find an Internal Champion Multicultural marketing will only become a priority for a business when someone at the top fully supports it. Without that support from an “internal champion,” other employees may not embrace Multicultural marketing as a key business priority. Also, when a business does not make a concerted effort to reach out to multicultural markets, it risks its credibility within that community and among the media and other civic influencers who serve it.

Commit to Market Research

When you develop your market research tools and survey instruments (questionnaires, guidelines, etc.), keep the ethnic or multicultural consumer clearly in mind. If a significant portion of your potential consumer base speaks languages other than English at home, at work or in other social settings, it makes sense to conduct your market research in that language. If a majority of your consumer base lives and works in a given neighborhood, be sure to target your research to those consumers, as attitudes can vary greatly from one area to the next.

Perform a Cost-Benefit Analysis

The most successful marketing professionals run detailed cost-benefit analyses to discover what advantages a given multicultural marketing strategy might bring. In most cases, this type of in-depth analysis will reveal that an investment in multicultural markets is not only the right thing to do, but also the most cost-effective way to generate sales.

To convince your colleagues, or even your bosses, that multicultural marketing should be a priority, it is imperative that you demonstrate clear proof that these multicultural markets can increase your company’s market share. Be sure to document and measure the success of any multicultural marketing initiative. Rising sales speak for themselves, of course, but also consider other ways to measure success. Has call volume increased? Have more multicultural prospects stopped by the office? Has the company Web site generated more hits? Professional Help While the idea of creating a multicultural marketing plan from scratch can seem daunting, especially for small real estate businesses, plenty of help is available.

The Gonzales Group is such an agency that specializes in multicultural marketing. With an exceptional partner to guide you, it should be much easier to reach out to a diverse customer base that will keep your business growing for years to come.

The State of Multicultural Homebuyer In Today's Market

2010-04-22T15:29:00.000-07:00

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.

When Multicultural Homeownership is Done Right

2010-04-02T13:08:00.000-07:00

by Gonzales Group

There is growing empirical evidence that despite the worst housing crisis since the Great Depression, lower-income homeowners are benefiting from well-designed affordable homeownership programs.

As highlighted in the report by David M. Abromowitz and Janneke Ratcliffe “Homeownership Done Right”, there is a compelling case for the many affordable housing programs that are working as intended. Here are a few of the examples sited in the report:

2009 examination of the foreclosure experiences of five city-based affordable homeownership programs in Boston, Chicago, Los Angeles, New York, and San Francisco found that out of nearly 9,000 low-income families who turned to these programs to purchase their homes, the overall default rate was below 1 percent. All of these lending programs boasted default rates below the average for their cities.
A recent report on New York City’s affordable homeownership program showed only 13 foreclosures out of more than 20,000 homes sold to low-income buyers since 2004.
University of North Carolina Center for Community Capital in a recent study compared the performance of home loans in a large, national portfolio of 36 lenders’ prime-rate mortgages offered to lower-income and minority borrowers, to that of subprime home loans in a mortgage industry database that covers about two-thirds of the market. Their analysis of borrowers with similar profiles (such as comparable lending risk factors, the size of down payments, and local property market conditions) shows that the borrowers who obtained subprime loans were three to five times as likely to default as their counterparts who had received the prime, affordable mortgages.

According the report, these impressive mortgage payment records by working-class families at the lower end of the income spectrum, mostly first-time homebuyers, have adhered to established home lending fundamentals:

Fixed-rate, fully amortizing loan terms over 30 years
Full documentation of income and demonstrated ability to pay the mortgage
Escrows of taxes and insurance to ensure regular payment

Another finding from the report is the positive impact of home buying and education counseling with the borrowers who have obtained these affordable loan programs.

If you're interested in reading more on this report, visit:

http://www.americanprogress.org/issues/2010/04/homeownership_right.html

Multicultural Markets Is Good Business for REALTORS®

2010-03-30T17:33:00.000-07:00

by Gonzales Group

The Multicultural market represents a tremendous opportunity for the real estate community.

Multicultural purchasing power this year is over $1 trillion and going to account for almost 50% of first-time homebuyers. Also according to Harvard University's Joint Center for Housing Studies, minorities will grow ever more important to the housing markets over the next 10 years, accounting for an estimated two-thirds of net new households.

Multicultural consumers today represent over one-quarter of all U.S. households, and will contribute to the majority of household growth over the next decade. This year, nearly three in ten thousand households will be headed by minorities. Younger on average than whites, Multicultural segments in America will add 9.2 million households under age 50 and will lose only 1.7 million households over that age to death, institutionalization or other causes.

Bottom line. The real estate market is changing because of increasing cultural interaction between nations, regions, communities, and neighborhoods. Evolution in technology, communications, open market economics, and social migrations are making our country increasingly diverse. Perhaps more than any other country, we have become a microcosm of the many cultures of the world, and this trend toward increased social diversity is certain to continue. Therefore today’s REALTORS® need to develop the skills to reach the growing multicultural market of prospective homeowners.

Latinos Will Continue to Impact the U.S. Labor Market

2010-03-30T16:41:00.000-07:00

by Gonzales Group

Is your organization ready for the statistical implications of what the 2010 U.S. Census will bring?

One thing is certain, the 2010 census will confirm what you already are experiencing in your local community; a sweeping demographic change transforming the role of Latinos in the American labor market.

Consider the following U.S. Census facts:

Latinos in 2008 comprised 15% of the nation’s population, but constituted 22% of workers today. That Latinos are almost a decade younger than the population at large means that Hispanics and Latin American immigrants, disproportionately, are of working age, either leaving college and entering the workforce, or well on their way to establishing their careers;
Latinos by 2050 will represent 32% of the nation’s population, but will comprise 55% of workers. As America’s baby-boomers and Generation X-ers mature and retire, Hispanic native born and Latin American immigrants alike, will dominate the workforce.

These demographic changes reflect the impact that Latinos will continue to have in the American labor market.

Research Study Shows: Immigrants are Drawn to Mid-Size Metro Areas

2010-03-19T11:47:00.000-07:00

by Gonzales Group

According to a research study from the USC Lusk Center for Real Estate, recently arrived immigrants flocked to smaller metropolitan areas during the first half of the last decade, lured by less competition for jobs and cheaper housing, but they were not as likely to buy homes in such places.The population of immigrants living in the U.S. for a decade or less jumped 27% in cities such as Nashville, El Paso, Bakersfield and Stockton during the first five years of the century, the USC Lusk Center for Real Estate reported. More traditional "gateway" metro areas such as Los Angeles and New York registered a 6% decline in the number of these newcomers over that same period.

The results of the study, which analyzed data from the U.S. Census Bureau, found that immigrants didn't adapt as well to housing markets in mid-size areas. They were less likely than native-born Americans with similar incomes to buy a home than those immigrants in more established metro areas such as Los Angeles and New York.

The study also found that Asian immigrants have slightly lower homeownership rates than Latino immigrants in mid-size metro areas, which contrasts with larger, gateway cities, where more Asians than Latinos tend to own homes. Both immigrant groups, however, tend to live in overcrowded conditions in smaller metro areas, the study found. The amount of time spent in the U.S. also didn't help immigrants in mid-size areas to catch up to the homeownership rate of native-born Americans with similar incomes. In more traditional gateway cities, however, the longer immigrants stay in the country the more likely they are to own.The study looked at 60 metro areas that weren't among the top 20 cities in the U.S. in terms of population. Each area was characterized as having a relatively high initial immigrant population or a low initial population.

Multicultural Ad Spending Outpaced General Market

2010-03-18T16:18:00.000-07:00

by Adweek

Ad spending in Spanish-language and African-American media fared better than the overall ad market in 2009.Spending declined 4.7 percent in Spanish-language media and 7.3 percent in African-American media, according to a Nielsen report released today. This compares to a 9 percent drop in overall domestic ad spending last year.Spanish-language ad spending was down by nearly $270 million last year for a total of $5.4 billion spent in Spanish-language media. D

Declines in magazines, newspapers, TV and radio were offset by a 32 percent increase in spending on cable TV to nearly $427 million overall. While Spanish-language spot TV spending was down 10 percent, the segment still attracted the most advertising dollars at more than $1.5 billion.African-American media lost more than $153 million in ad spending across all segments with the exception of cable TV, which increased more than 35 percent to $728 million. The biggest spending decreases were in network TV (down 72 percent to $26.6 million) and national magazines (down more than 33 percent to $353.8 million).

In total, spending in African-American media exceeded $1.9 billion.The top-spending category for both Spanish-language media and African-American media was quick-service restaurants, which increased 13.9 percent in Spanish-language media and 19.2 percent among African-American media.The fastest-growing category in Spanish-language media segment was satellite communications, up 77.3 percent. Insurance was the fastest-growing category among African-American media, up 28.6 percent. Auto was the second-biggest category for both Spanish-language and African-American media, down 38.8 percent and 18.2 percent, respectively.

Russian-American Homebuyers

2010-03-18T14:38:00.000-07:00

by Gonzales Group

The rapidly growing Russian-American population is a consumer segment with strong buying power and prefers to buy high-priced, quality name brand products.

The Russian-speaking community is very diverse and possesses subcultures within it. For example, a person from a small rural town in the Ukraine will probably have different buying habits than someone from Moscow. A Multi-generational household is another cultural characteristic to consider with this homebuying segment. While the grandparents may not speak English, their grandchildren may consider English their first language.

Role of the FamilyFamily plays a critical role with the Russian homebuyer. It is customary for most Russian parents to support their children throughout their entire life. Even after the children have celebrated their 30th, 40th, or 50th birthday, parents will often bring them food and provide financial resources.

The bond of a Russian mother and son is very strong. Historically, in Russia parents celebrate the birth of a son more than the birth of a daughter. The ratio of men to women in Russia is less, which accounts for the males privileged social position and pronounced adoration. Russian mothers and their daughters also have a strong bond. In most cases, mothers teach their daughters to be hostess’ and administrators of the home but also encourage independence. The family bond among Russian woman usually is determined by national traditions, her sociability, and where she lives. There is a strong tendency among immigrant Russian women to remain close to their mother and sisters while the family social network expands. Russians around the U.S. possess varied acculturation levels. Many professional Russians who immigrated a decade ago will typically reside in urban areas.

Research Study Shows: African-American Consumer Buying Power Nearing $1 Trillion in 2010

2010-03-18T14:34:00.000-07:00

by Gonzales Group

Wielding buying power that will approach $1 trillion this year, the 40 million-strong African-American population is an important component of an economy increasingly dependent on the needs and preferences of multicultural shoppers, according to “The African American Market in the U.S., 8th Edition” by New York-based market research publisher Packaged Facts, a division of MarketResearch.com.

Major consumer products marketers have begun to align their strategies with the multicultural majority emerging in the U.S., and some have even indicated that multicultural consumers have become their core focus as they strategize and set their sights on the next 10 years. The African-American population isn’t as large as the U.S. Hispanic market, but the disposable personal income of both demographic groups is projected to trend comparably over the following five years, with each seeing cumulative growth of at least 28 percent from 2009 through 2014.

Packaged Facts forecasts that the buying power of African-American shoppers will hit an estimated $1.2 trillion by the close of this period. Although affected badly by the recession — unemployment rates for African-Americans exceed that of any other major population group — this population segment holds a generally more optimistic view of the future than other Americans do, due to the sense of empowerment gained by the election of Barack Obama, the report found.

This optimism extends to their own personal finances and a general tendency to agree that they’re less likely to delay making such major purchases as cars in the near future

Research Study Shows: Asian Americans Most Active Users of Online Banking

2010-03-18T14:31:00.000-07:00

by Gonzales Group

Asian Americans are significantly more likely to bank online compare to non-Asian households, with 75.3 percent banking online compared to 67.4 percent of non-Asians. But it is income rather than age or ethnicity that appears to be driving online banking usage:

affluent households with incomes of $100,000 and up and with heads-of-households aged 35 or younger were just as likely to bank online whether they were Asian or not (84%).
As affluence levels decrease, more Asians tend to bank online compared to non-Asian households.With competition for new customers increasingly fierce, financial institutions would be well-served in targeting Asian families.
The average Asian-American household has a mean income of $84,000 compared to $62,000 in non-Asian households. In addition, they tend to hold very high deposit levels with much of their assets in savings, money market, CDs or mutual funds accounts.

The Face of Trust for the Multicultural Consumer

2010-03-18T11:42:00.000-07:00

by Gonzales Group

While low trust levels are a challenge across the marketplace, multicultural consumers (i.e. African Americans and Hispanics) represent unique challenges and issues when it comes to trust. A close-knit family collectivism is fostered in large part due to the lack of trust in outside institutions.

For the African American consumer, it reflects their existing lack of trust in the U.S. government. The strength of the multicultural family is rooted in close-knit collectivism – a cultural characteristic that puts the needs of the family before others. African Americans turn to family as a refuge from the sting of discrimination socially and in the marketplace. Emotionally, this makes African Americans and Hispanics even more dependent on themselves and each other and less likely to trust outsiders. This is why African Americans consider family and friends their support systems – their “social security”. African Americans have a general distrust, based not on experiences elsewhere as seen among Hispanics but rather because of negative experiences in this country. In many ways, this makes gaining their trust even more difficult. African-Americans tend to agree that big corporations leave much to be desired—product quality is slipping and customer service is a thing of the past. This African American sentiment is in concert with the widespread notion that corporations have become too powerful and is more interested in making a profit than in serving the public interest. High-profile scandals involving the collapse of the financial banking industry have eroded public trust in big business and financial service institutions. However, more African Americans (82% versus 76% non-Hispanic Whites) agree that too much power is concentrated in a few big companies (Pew Research Center 2008).

Trust in government has declined among African American consumers in particular. The current economic climate impacts African Americans more than Non-Hispanic Whites, so they are more likely to agree with the aphorism, “the rich get richer and the poor get poorer.” This African American attitude reflects their greater sense of economic pessimism. In addition, far fewer African Americans (43%) than Non-Hispanic Whites (66%) are satisfied with their current financial situation (Pew Research Center 2008). African Americans have become increasingly cynical about national Government and its responsiveness to its citizens. African Americans are extremely distrustful and, unlike the majority of Non-Hispanic Whites, they don’t believe that Government operates for the benefit of all the people. African Americans in particular feel overlooked when it comes to government policy.

Study Show: 1.3 million Latino Families Projected to Lose their Homes to Foreclosure Between 2009 and 2012

2010-03-18T11:33:00.000-07:00

by Gonzales Group

A study from the State Foreclosure Prevention Working Group found that more home loans are falling into foreclosure, not from bad credit loans, but from conventional loans. These are people who had good credit histories, paid their bills and either lost their jobs or experienced a pay cut or suffered a catastrophic illness that put their finances and home at risk.
To make matters worse, when trying to get help from banks and other lenders, the help was never significant enough to really help the family. According to the working group's study, only four in 10 delinquent borrowers are working with loss-mitigation programs. Not enough mortgage lenders are reducing the principal balance of mortgage loans, whether prime loans or bad credit loans, either.
According to the study, only 9 percent of mortgage loan modifications in October of 2009 involved a reduction in principal balance by more than 10 percent. This is unfortunate, as other studies have shown that reducing this balance more often results in homeowners not falling into foreclosure.As a result of this unwillingness by the mortgage industry, a new report released by the National Council of La Raza reveals that approximately 1.3 million Latino homeowners are expected to lose their home to foreclosure between 2009 and 2012. The repercussions of these home foreclosures are devastating to these families' long-term financial, emotional and physical well-being -- with the need to act before it gets even worse. The Foreclosure Generation: The Long-Term Impact of the Housing Crisis on Latino Children and Families found that when a family loses their home a host of emotions and insecurities set in for not only the parents, but the children as well.

The study found five major findings:

Following the foreclosure, signs of depression, increased anxiety and tension, and feelings of guilt and resentment were commonplace. Parents reported troubling changes in their relationships with their children and the children's relationships with each other. Several parents stated that their children blamed them for the foreclosure. Children's academic performance declined while problematic behavior at school increased. Several parents reported that children had to change schools as a result of the foreclosure. Parents often perceived their children as withdrawn and having trouble making new friends.
Family finances were devastated, with the families reporting an average loss of $89,155 due to the foreclosure, leaving them without a safety net to cope with financial emergencies. None of the families reported receiving significant help from their lender to avoid foreclosure.
Families were forced to change their long-term financial plans, including plans to help their children with major life expenses such as education, a car, or a home. All but one family were left without reserves they could tap into in case of a financial emergency and many skimped on needed medical care to save money. Fifteen of the 25 families interviewed reported turning to unemployment insurance, food assistance programs, and other programs to help make ends meet. Grant it, none of these findings is unique to Latinos. All families who undergo a traumatic event as losing a home experience the same roller coaster of emotions and family exchanges of leveling blame.

What makes it so much harder for Latinos is that given that Latinos have experienced more severe wide-spread job losses because of the industries most work in, their ability to get back on their financial feet may take longer and prove harder to achieve.