DENVER — The message for the salespeople was simple: Doing business with the growing numbers of Hispanics seeking to become homeowners in this country requires connecting with that community.
The competition for the Hispanic demographic among real estate professionals is justifiably intense: Hispanics are expected to make up 40 percent of the country’s
first-time homebuyers over the next 20 years, according to the Harvard Joint Center for Housing Studies.
“This is an extremely dynamic market, and if you’re not dynamic as well, you’re not
going to be successful,” said John Greenleaf, a spokesman for Cendant Corp., the parent company of real estate companies Century 21, Coldwell Banker and ERA.
Greenleaf was one of the attendees at this week’s fourth annual national Hispanic Marketing Convention and Expo, held for the first time in Denver.
Greenleaf spoke Monday afternoon at a panel discussion on the latest trends in advertising and marketing to this ever-growing demographic.
There are about 38 million Hispanics in the United States, or 13 percent of the population, according to the U.S. Census Bureau. By 2050, the group will represent 25 percent of the population.
The gap between Hispanic homeownership rates and those of Caucasians remains significant, but the number of Latino homeowners is actually growing in percentage faster than the general population. The rate of Hispanic homeownership between 1994 and 2001 grew 16.7 percent, compared with a growth rate of 6.6 percent for Caucasian homeownership.
According to a study by the Tomas Rivera Policy Institute, a think tank affiliated with the University of Southern California, the majority of Latinos surveyed would like to own their own homes but are unsure how to do it. According to the same study, this group’s buying power in 2002 was $580.5 billion.
For real estate brokers and mortgage companies looking to gain a share of this burgeoning demographic, it’s first necessary to understand it, Greenleaf and the other panelists agreed.
“It’s not about a 30-second ad; it’s not about a 60-second ad,” said Bill O’Leary, spokesman for Fannie Mae, the second-largest U.S. financial institution. “The answer is much more profound — it begins with education.”
Effectively serving the Hispanic market means knowing the customers, and the panelists agreed that means being aware of what makes them different from other homebuying groups.
For one thing, the average age of the first-time Hispanic homebuyer is 24, according to the National Association of Realtors, while the average age for Caucasians is 32.
Another difference is the very reason people buy a home in the first place. Stuart Kanchuger, who guides Wells Fargo’s efforts in marketing to Latino homebuyers, said that in general, most people’s main goal in buying a home is to build wealth for their retirement.
“The Latino market is about family benefit,” Kanchuger countered. “While it’s very simple, it’s actually very distinct from the general market.”
The six panelists, who came from across the country, agreed that understanding cultural differences and establishing trust are key to attracting Latino clients.
“To the real estate agents and the brokers in the room, I would say you are the second-most important person in the life of the Hispanic homebuyer,” said O’Leary, who noted that his wife is Colombian. “My Realtor is extremely important, but not as important as my father-in-law.”
“In our community, we tend to go with our friends and family because that’s who we trust, essentially,” added Sylvia Aguilera of Communic AD, whose advertising agency has launched a marketing campaign with Fannie Mae targeting the Latino market.
What they discovered in putting the campaign together, Aguilera said, is that first-time buyers often had “a general mistrust of the whole process.”
Two other major barriers to first-time buyers that they discovered — at least perceived barriers — were that some people were afraid their credit was so bad they could never qualify for a home loan, and others had a misconception of what was required for a down payment.
“Many people really believe that you need 20 percent or more down before you can buy a home,” Aguilera said. “In fact, you can get a house for 3 percent or even 0 percent (down), depending on the program.”
Census numbers show that real estate professionals ignore the Latino market at their peril. Monday’s discussion was meant to help these professionals understand that reaching that demographic is not something that should be taken lightly.
“When you’re talking about getting your message across, fundamentally you’re talking about your brand,” said Kanchuger, adding that a brand is the same as a promise. “If you promise something, you’d better be able to deliver on it.”
The marketing seminar was one of many breakout sessions and ancillary events during the four-day conference at the Adams Mark Hotel.
Mary Mancera, spokeswoman for the National Association of Hispanic Real Estate Professionals, said about 1,500 people attended the convention, a strong turnout considering that the convention is only in its fourth year.
“The organization, when it started five years ago, started with only a handful of people, and now it’s 12,000 and growing almost weekly,” Mancera said.
Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at email@example.com.