By: The Gonzales Group | Published: April 2010

Since 2000, we have seen a significant shift in the profile of the Allentown-Bethlehem, Pennsylvania demographics. The multicultural consumer has grown both in population size and in buying power. Given the rapid growth rate of Hispanic, Asian, Asian-Indian and African-American population, the Gonzales Group examines Allentown-Bethlehem, utilizing data compiled by the U.S. Census to identify the overall market potential within the multicultural segments. 

Overall, the total population of Allentown-Bethlehem is expected to grow by 5.25% between 2009-2014. The Asian-American population will experience the largest growth, growing by 25.46%. From 2000 to 2009 Allentown-Bethlehem saw the Asian and African-American population increase by 114.61% and 114.11%, while the Hispanic population increased by 107.02%. The traditional White non-Hispanic population only increased by 6.84%.

While the population growth in Allentown-Bethlehem shows significant shifts in demographic profile, household median income does not necessarily track with population trends. While the Hispanic population trends show growth compared to the White non-Hispanic population, median incomes of Hispanics are only 77.73% less than non-Hispanic population.

In 2009 two-thirds, 70.33%, of the Hispanic households earn under $49,000, compared to 43.36% of non-Hispanic households. Hispanic household incomes between $50,000 to $74,999, lagged behind non-Hispanic households and 7.31% of Hispanic households earn over $100,000 compared to 20.98% of non-Hispanic households.

In 2009, the Allentown-Bethlehem homeownership rates for Hispanics (39.93%), Blacks (46.81%) and Asian (59.98%) were lower compared to the home ownership rate for the total population rates (73.01%) and non-Hispanic white (77.87%) populations.

Between 2000 and 2014, the Allentown-Bethlehem MSA will continue to show homeownership growth among all races and ethnic groups. Like the population trend, the multicultural consumer will demonstrate the highest rate of homeownership growth among Asians, African-Americans, and Hispanics. Similarly, rental rates will also increase as the population grows and younger Asians, African-Americans, and Hispanics enter the workforce. Much of the disparity in rental and home ownership rates comes from a lack of education about the home buying process. This lack of education is often compounded by language and cultural barriers.

Nearly 78.52% percent of the Allentown-Bethlehem Hispanic Population is less than 44 years old and 47.38% are under the age of 24. 70.97% of the Asian population of Allentown-Bethlehem is less than 44 years old and 39.33% are under the age of 24. 54.42% of the African-American population is under the age of 24 and 29.43% are under the age of 44.

Allentown-Bethlehem is reflective of the changes occurring in the U.S. The aging of the Baby Boomer generation will create a growing demand for younger workers. The White population in Allentown-Bethlehem tracks with the overall U.S. trend with 45.59% of the White population in the Allentown-Bethlehem MSA being over the age of 45.

It’s important to understand the impact that immigrants and their children will have in filling the jobs left by the retiring boomers and economically supporting the social needs of this aging segment. Immigrant homebuyers will play a huge role in shoring up the housing surplus left by the retiring boomer who will sell their homes as they age and become net sellers versus net buyers. Soft marketing in heavily populated ethnic zip codes can help with branding your organization in the community, but sales may take longer to germinate. Target marketing is more effective if a broker or lender concentrates his or her efforts in zip codes where qualified buyers have the median income, buying power and wherewithal to purchase a home rather than basing their assumptions on population alone. Many marketers make the mistake of marketing in a heavily populated Hispanic, Asian, and African-American zip codes expecting quick and measurable results. Density does not necessarily equate to qualified homebuyers given the young age of the multicultural population.

While the Mexican population in Allentown-Bethlehem is the largest among Hispanics, its important to know the profile of the Hispanic homebuyer coming through the door to avoid any embarrassing situations. Hispanics are proud of their heritage and calling someone Mexican who is in fact Puerto Rican can be insulting and visa versa.

The Asian population in the Allentown-Bethlehem MSA is comprised of Asian Indian (34%) followed by Chinese (22%), and Vietnamese (17%).

In Allentown-Bethlehem, 48% of Hispanics speak Spanish at home and 38% speak an Asian/Pacific Islander language in the home. Language and culture are typically the biggest barriers to reaching the multicultural consumer. Knowing the language usage of the Multicultural consumer is vitally important for decision makers. This help to determine the marketing dollars needed to provide language appropriate collateral material to provide the service and create a branding mechanism for the organization. Even if a large percentage of the multicultural population speaks English, you cannot discount the influence of culture in the home buying decision. Multicultural homebuyers often look to extended family for advice when purchasing a home. For example, a valid Hispanic cultural practice shows that decision making is based on the opinions and influences of the community and extended family, not just that of the homebuyer.

Just as important as language, the level of assimilation plays a significant role in the home buying decision for the multicultural homebuyer. In places where immigration is rising, assimilation levels are low. In MSA’s where second and third generation immigrants have settled such as Chicago, the assimilation levels are higher demonstrating an immigrant with an understanding of U.S. business practices and command of the English language. As the new immigrant arrivals begin to understand their new surroundings, they begin to understand business practices and U.S. cultural norms. It is not a phenomenon that occurs instantly but instead over time. As new arrivals make their way to new gateway cities, helping to accommodate that transition can yield relational equity for the real estate professional that can generate leads and transactions.

Summary

Market expansion targeting the Allentown-Bethlehem multicultural consumer is a sound one. Given the exponential growth in population and increasing buying power, expanding marketing efforts that accommodates language and cultural nuances can yield sound economic results and expand market share.

Between 2000-2014, the population shifts in the Allentown-Bethlehem MSA are significant with the overall population increasing by 16.07% and the Hispanic, African-American, and Asian population increasing by 107.22%, 114.11% and 114.61% respectively while the White non-Hispanic population is expected to increase by only 6.84%.

Allentown-Bethlehem has a very young Hispanic and Asian population that is ready and able to fill the housing gap left by the aging Baby Boomer generation. Immigrants and their children will fill the jobs left by the retiring boomers and economically support the social needs of this aging segment. Immigrant homebuyers will play a huge role in buying the housing surplus left by the retiring boomer who will sell their homes as they age and become net sellers versus net buyers.

Knowing how to deploy strategies and tactics that culturally connects with this customer segment is the key to economic success and market share expansion. Building this type of relational equity will generate leads and transactions for the real estate professional.

This analysis of the Allentown-Bethlehem MSA is designed to serve as a tool if you are considering expanding your market share and profitability through a multicultural initiative. To show a measurable return on investment for multicultural programs, your efforts must be factored into the organization's overall sales, organizational infrastructure, marketing functions, and customer experience. By using benchmarks and business metrics, organizations can measure multicultural initiatives more effectively.