By the Gonzales Group
RISMEDIA, Sept. 11, 2008-The U.S. Census Bureau is predicting that the Hispanic and Asian population will triple by 2050 while that of White non-Hispanic will increase by only 7%. Multicultural consumers are growing rapidly and each segment represents billions of dollars in spending power in the U.S. Companies are increasingly competing for these growing markets, especially at a time when the traditional White non-Hispanic home buying population growth overall has slowed significantly.
The multiethnic-consumer pool, like the supplier-diversity sector, is expanding dramatically. People of color accounted for nearly 40% of the growth in homeownership from 1994 to 1999, and will represent 30% of households by 2010. Consumer-buying power in this segment will triple what it was in 1990, indicating major economic strides among African-Americans and Hispanics, according to a new study from the University of Georgia.
Overall buying power, which is defined as the total post-tax, personal income of residents that is available to spend on goods and services, will jump 148% for the period 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 will exceed $1.5 trillion, more than triple the 1990 level of $456 billion. That’s a gain of $1.1 trillion, or 231%. “In sheer dollar power, the economic clout of the nation’s minorities – Hispanics in particular – is formidable,” states Jeff Humphreys, Selig Center director.
Hispanic buying power, however, will jump 357%, while that of blacks will increase 189% from 1990 to 2008, 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 home buyers in your near term and extended future will play a major role in your business.
Over the next five-year period, total households are forecasted to grow about 5%, which will add about 5 million new households. Emerging market home buyers 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.
So how do you prepare to accommodate the increased buying power and growth of these populations? It requires attention to cultural awareness and education. Many emerging market home buyers have little, if any, point of reference for what a real estate professional is and the role they play in the transaction.
One thing is certain-the home buying landscape is changing and if you are going to capitalize on it, you need to tweak your business plans and marketing approaches to accommodate the new consumer.
At the Gonzales Group we provide the multi-dimensional business development discipline to help you execute an effective multicultural strategy that generates profitable leads to the multicultural consumer.
For more information, visit www.thegonzalesgroup.com.
The Gonzales Group and RISMedia are excited to introduce a ground-breaking White Paper that takes a realistic and practical in-depth look at the changing face of modern-day real estate. In “The New Economic Power Source: Increasing Profitability with Multicultural Home buyers,” the authors will help you unlock the potential of the multicultural market by answering the questions and clarifying the assumptions often associated with this consumer group. To order the White Paper, click here.