Here’s an idea that should appeal to all REALTOR entrepreneurs: Rather than waiting for a pile of money to fall from the sky, why not grow your way out of these tough times? It’s decision time now – and I don’t mean the election: Are you going to just sit there and let your company go bust? You probably don’t have enough cash to keep waiting it out – so pull your head out of the sand, shake off the panic and go do what you do best: Sell homes. Help buyers. Grow your sales.
If you don’t know where all this growth is going to come from, maybe it’s time to look at the growing Hispanic market.
The Hispanic population of the United States is the second largest segment of the population, topping 45 million people this year. In the next five years, it’s estimated to grow by another 13.5% or 5 million people. For anyone – like real estate professionals – looking for new customers, there’s no question where you should be focused. And if you need a primer, purchase a copy of the Gonzalez Group’s research paper The New Economic Power Source: Increasing Profitability with Multicultural Homebuyers. It’s well worth the money.
Any growing population will need more housing: Hispanic households are already larger than the average, with four people per household compared to a median of three across all households. That’s great news for builders and brokers, for whom selling larger homes represents larger revenues. And since Hispanics are younger on average – about 27 compared to a national average of 36 years old – there will be a ready-made pool of buyers for the downsizing Baby Boomers. This also puts a lot of Hispanics in Generation Y – which means the “first time home buyer.” Last year Hispanics constituted 40% of the first-time buyer population. With a growing population of such a low average age, it’s clear that Hispanics will remain a large segment of the business for decades. Maybe that’s why Hispanics and Latinos home ownership is set to grow by 17% by 2013.
As a whole, Hispanics also have higher percentage employment per population segment. The U.S. Bureau of Labor stats for August 2008 put the percentage of Hispanics employed (as a percentage of total Hispanic population) at 65.5% – six percentage points above African Americans and two above Caucasians. No wonder the segment’s purchasing power growth was two times the national – with nearly $870 billion spent in 2008, on track to break $1.3 trillion by 2015. Overall, nearly 12% of Hispanic households earned more than $93,000 (in 2006 figures).
That’s a lot of numbers which all add up to a serious segment of the housing market that could be just what you need to pull your real estate business out of crisis. Organizations like the National Association of Hispanic Real Estate Professionals (NAHREP) have been touting this opportunity for years – which is why they’re experiencing a record year for new members as REALTORS, mortgage bankers and others in the industry come to recognize the untapped potential of this market segment. And the growth potential still remains largely untapped. According to HispanicBusiness.com, advertising dollars across all industries aren’t keeping pace with the purchasing power and population growth amongst Hispanics. Last year the total advertising dollars spent in the U.S. Hispanic market was barely 2.3% of total expenditures – even though Hispanic purchasing power represented 9.3% nationwide. The most basic marketing campaigns to Hispanics – local advertising, networking and online marketing – will find the opportunity-space deep and wide. There’s even a field guide to marketing to Hispanics from the National Association of REALTORS website.
Ideally, this heavily Gen X and Gen Y population of consumers is ripe for internet- and tech-savvy marketing. The average Hispanic buyer was 24 years old last year: We’re talking web-surfer and text-messager, not print magazines or postcards. Already internet marketing outpaces by 200% the advertising spend to Hispanics – so REALTORS should waste no time licking stamps. comScore Media Metrix recently conducted a study that showed that 96% of Hispanic users spend at least an hour online weekly – compared to only 91% who spend an hour watching TV. A full 30% of Hispanics were online for more than 13 hours a week: Which makes it troubling that too many real estate websites are still mono-linguistic. Companies like Century 21 – with their fully translated website have a serious advantage over the vast majority of websites that are fueled by barely-abbreviated-English transferred from MLS feeds.
It seems like a no-brainer to me: A rapidly growing population, with a significant portion in the first-time and move-up buyer age range, representing 9-15% of the total national purchasing power in the next five years, 29.2% of which had household income greater than $59,000, spending more than a dozen hours a week online: The growth path REALTORS have been looking for is right outside their door.