|
At the RIS Media 16th Annual Real Estate Leadership Conference, industry experts pinpointed five demographic trends that will have a major effect on the residential real estate industry in coming years.
Facilitated by John Heithaus, managing partner at Certified Closing Network, the panelists cited Baby Boomers, immigrants, senior citizens, Echo Boomers and international buyers as major demographic groups that, over the past few years, have been putting more money into the market--a sign that they deserve more specific attention.
According to Heithaus, Baby Boomers, who were born between 1946 and 1964, make up "the greatest economic force in the history of the United States.
"It's a very diverse group," Heithaus said. "There are often misconceptions about them all being pot smoking hippies."
As the oldest of the Echo Boomers--that is, children of the Baby Boomers and those born between 1982 and 1995--start to move into adulthood, they are also suddenly becoming a strong buying and renting force. There are 80 million Echo Boomers in the United States, roughly one third of the population, who currently invest $170 billion in real estate each year.
Senior citizens, who currently make up 20% of the country's population, have a lot of real estate wealth to disperse into the market, too. As they get older, most of them look to relocate, usually locally, which brings in a lot of local business for realtors.
For this demographic, "an emotional connection [between the broker and the buyer] is critical," said Rob. Adams, president of Moving Station, LLC. "You need to take a hands-on approach. Trust drives the relationship."
The United States is the top country for expatriate moves. International buyers formerly spent the majority of their money renting, but have become a buying population that "want[s] a piece of the U.S. real estate dream," Heithaus said.
But perhaps the largest of all these groups is the immigrant buyers. The minority population in the United States grows each year and will continue to grow. It is projected that, by 2050, the Asian and Hispanic populations will have tripled. By 2009, the consumer buying power of minorities will triple as well. African-Americans will see a 203% increase, while Asians and Hispanics will see an even bigger increase of 347%. This is a large market group that needs to be very carefully evaluated and dealt with in culturally specific ways.
"Studying the market and understanding it is really critical," said Oscar Gonzalez, president of the Gonzalez Group. "It's not just a one dimensional approach; it's multidimensional. It's about what's culturally correct. Realtors don't exist in South and Central America and Asia, so you have to be very basic and fundamental."
Gonzalez added, "A multicultural initiative must become an integral part of your business and strategic plan as your client profile changes."
There are several barriers to overcome when selling to minority groups. One major barrier is the consumer's lack of knowledge of the real estate industry.
First American Corporation has dealt with this in a creative way by putting up a webpage written entirely in Spanish on the MSN Latino website.
The page, which receives 150,000 hits a month, educates Hispanic viewers about buying a home and can connect the user to a certified NAHREP broker through a link on the page.
John Reinhardt, president of Fillmore Real Estate and panelist at the seminar, said the three ways to approach the immigrant and minority market is to "understand ... communicate effectively ... and to educate consumers."
"It's difficult to understand someone from around the world, but understanding the immigrant market is important," Reinhardt said. "You can get the info online and can market down to the zipcode. The tools are available."
He went on to say that "communication is the most important." Fillmore has established several initiatives in order to communicate more effectively with minority and immigrant homebuyers. The company's brokers and agents can speak an aggregate of 37 languages. They advertise in various ethnic publications and hold home buying seminars in several different languages.
With these diverse and major trends developing, the panelists agreed that businesses are being presented with a major opportunity--if they do their homework.
"Diversity leads to core business," said John Yen Wong, president of the Asian Real Estate Association of America. "It's no longer emerging; it's emerged."
|
