Buzz in buying is minority markets

For years, few Realtors paid much attention to minority home buyers.
DALLAS MORNING NEWS
ORLANDO, Fla. -- For decades, America's real estate agents lived in an Ozzie and Harriet world.
Many residential agents catered to the same buyers they had sold to since the 1950s -- middle-class white families buying homes in the suburbs.
But the new buzz in the business is about diversity.
Real estate experts predict in the coming decades, almost 30 percent of their business could come from immigrant and minority buyers. The industry is gearing up to handle the shift.
"Every part of this country will be affected by the huge tidal wave of minority population growth and immigration," Michael Lee, a California sales agent, told the National Association of Realtors at its annual meeting in Orlando, Fla., in this month. "You'd better learn to deal with these buyers, or you might as well get out of the business."
The latest industry survey suggests about 16 percent of the 6.6 million pre-owned homes sold in the United States this year will go to ethnic minorities. Lee predicts minority and ethnic buyers will soon grow to more than 60 percent of the first-time housing market.
"This is a significant opportunity" for the 1.5 million-member residential sales industry in America, Lee said.
Overlooked in the past
In the mid-1980s, when Antonio Matarranz started his company, Hispanic home buyers were being overlooked by most real estate agents in Dallas-Fort Worth, Texas.
Since then, his Avangard Real Estate Co. has sold more than 3,500 homes, mostly to Hispanic buyers. And almost 10,000 potential Hispanic buyers have attended his regular seminars.
Before he opened his independent firm, Matarranz said, "I did go and talk to some of the big firms and asked them to sponsor me.
"They said it sounded good but not yet, not yet," he said.
Now some of the largest residential firms are calling him.
"The Realtors have missed the boat," Matarranz said. "The normal traditional Realtor is still scared to death of this market."
But the prospect of millions of dollars in potential sales commissions has the industry singing the diversity song today.
Lots of interest
At the convention, thousands of real estate agents crammed into seminars to get tips on working with ethnic buyers.
"To serve this market, we need to treat these folks specially and customize our presentations to meet their needs," Lee told agents. "We as Realtors turn away minority business every day by basically telling them they are not welcome in our office."
The numbers are getting too big for even the most traditional home-sales firms to overlook.
"The immense buying power of these groups is energizing the U.S. consumer market like it never has before," said Jeffrey Humphreys, an economic forecaster for the University of Georgia. "They are reshaping business opportunities in America."
Just the Hispanic market in the United States will see its annual buying power grow from around $686 million to more than $1 trillion by 2009, Humphreys said.
Enhanced buying power
"By 2009, the buying power of Hispanics in this country will exceed the economy of Canada," he said. "It's going to represent an increasing portion of your new customers." And since Hispanic, black and Asian households in the United States significantly lag behind whites in homeownership, the potential is even greater.
A prediction
Brian Surette, an economist with mortgage company Freddie Mac, predicts Hispanic homeownership rates will quickly top the 50 percent mark from about 47 percent currently.
"Nearly a third of all the growth between now and 2010 is going to come from Latino-headed households," he said. "Almost 90 percent [of Hispanics surveyed] want to become homeowners."
Along with language and credit problems, another barrier to home ownership has been disposable income. Surette said a new survey of Mexican-American renters shows they send more than $4,000 a year on average to relatives back home.
"This is a relatively modest-income population, and they are sending a relatively large proportion of their income back to their family and friends," he said.
Hurdles to be cleared
Real estate agents serving Asian immigrants must clear language and cultural hurdles, but the opportunities there are also increasing, said consultant Oscar Gonzales.
"Asian-Americans are the second-fastest-growing home ownership group after Latinos," he said. "In a lot of communities, they are growing faster than the Hispanic population.
"This is really going to have an impact on what our future home buyer is going to look like," Gonzales said.
A lack of familiarity with the home-buying process and undocumented income are among the biggest problems immigrant Asian buyers face, according to a new study by UCLA.
"You are dealing with a home buyer that doesn't understand the basics of real estate," Lee said. "This is an opportunity for us to help these folks get into the dream of homeownership in America."