Erica Christoffer is a multimedia journalist and contributing writer and editor for REALTOR® Magazine. She can be reached at firstname.lastname@example.org.
Emerging Markets Have Emerged
The face of real estate is changing, and brokers are sharing tips and tools for understanding and working with a diverse client base.
May 12, 2016
The name of the RISMedia Power Brokers panel may have been a little misleading: “Understanding and Capturing Emerging-Market Business.” As Gary Scott, president of Long & Foster Real Estate, put it, “These aren’t emerging markets; they’ve emerged — and they’ve emerged big.”
The conversation between the seven panelists during the REALTORS® Legislative Meeting & Trade Expo on Thursday focused on growing business opportunities within the Hispanic, Asian, and LGBT communities.
Last year, the Hispanic home ownership rate surpassed 47 percent in the U.S., and 70 percent of all new households formed in 2015 were of Hispanic decent, says Joseph Nery, 2016 president of The National Association of Hispanic Real Estate Professionals.
The group recently released its annual State of Hispanic Homeownership Report, which found that 21 percent of millenials are Latino, with a median age of 29. Hispanics are expected to account for more than 50 percent of first-time buyer activity nationwide this year, according to the report, and 25 percent of all Hispanic buyers say they prefer to work with an agent who speaks Spanish.
Most individuals think Hispanic population growth is centered in large cities like Los Angeles, Miami, or Chicago, but research shows the most significant growth happening in cities like Omaha, Oklahoma City, and other Midwest metro areas, Nery says.
“Our population — the Latino population — is booming,” says Nery. “We believe that the Hispanic community is going to be driving the housing market going forward.”
Turning the spotlight on Asian buyers, John Yen Wong, founding chairman of the Asian Real Estate Association of America, says there’s a lot of talk regarding the $2.8 billion in sales coming from abroad — but the potential business among Asian Americans is being overlooked.
Asian Americans represent between 5 percent and 6 percent of the U.S. population but make up 10 percent of mortgage loan originations, Wong says. And like Hispanic Americans, Asian Americans also have a younger median age of 34.
Eddie Berenbaum, who founded D.C.-based Century 21 Redwood Realty in 2002, has found that a naturally diverse culture has emerged in his 10 offices. After surveying his agents last year, he found that there are 24 languages spoken among them.
“We recruit with an open mind,” he says. “Global is the new local.”
Hiring agents who reflect your community is important, as well as understanding your client base. For instance, if you’re targeting foreign buyers coming from China, understand the customs and local laws, Berenbaum says. About 60 percent of his company’s Asian buyers are purchasing personal residences in the U.S., and 40 percent are investors. It’s also important to connect with banks that loan to foreign nationals, he says.
Two tools Berenbaum finds helpful include ListHub Global, which syndicates listing to 50 countries around the world starting at $2 per listing. He also uses WeChat, a free messaging and calling app that’s particularly popular among Chinese clients. Wong, who also uses WeChat, speaks fluent Chinese but can’t write the language, so he enjoys the translation function of the app. When doing a deal in Mexico, Wong and his clients were able to communicate in English, Chinese, and Spanish using WeChat.
Another market segment, LGBT Americans, is wielding significant buying power in many markets. Jeff Berger, founder and CEO of the National Association of Gay and Lesbian Real Estate Professionals, says 54 percent of LGBT respondents in a recent survey own some type of real estate, and home ownership is equal between gay/bisexual men and women.
Additionally, 25 percent of respondents said they plan to purchase real estate in the next three years, and of those individuals, 86 percent said it’s important that their agent be LGBT-friendly, compared to only 13 percent who said their agent must identify as LGBT, Berger says. A good way to present your brokerage as LGBT-friendly is simply by saying so on your website or on social media, he says.
The Marriage Equality ruling has also had a significant impact on the confidence of LGBT family formation, Berger says, with 59 percent of LGBT millennials planning to have children in the future.
For brokers and team leaders pursuing business within these diverse market segments, Wong says it’s important to first look at the culture that exists in your office. “Show them how they’ll benefit from your new initiatives,” he says. The goal is not to fragment or disconnect groups within your office. “You have a single company, and you should have a single culture.”
But above all, be yourself, Wong says, and “people will sense that you’re open to diversity”