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20 February 2009

Revisiting the Question of Diversity in Real Estate

Unity in Diversity

Photo courtesy of Sanj@y (Flickr)

As I think about Black History Month and the remarkable events of the last year, I find myself simultaneously thinking about two very different kinds of questions.  On the one hand, I read the statistics from the 2008 National Association of REALTORS® Members Profile and wonder why the population of real estate agents in America continues to be so much less ethnically diverse than the general population.  On the other, I wonder: do we even need these statistics anymore?

By combining current census data with the NAR figures, the racial distributions can be summarized as follows:

racial-distribution1

These are simply the statistics; this is not to insinuate a nefarious reasoning behind them.  In fact, an argument could be made that since not all real estate agents are REALTORS®, some data may be lost.  To account for that, I’ll add members from three other industry groups (The National Association of Hispanic Real Estate Professionals, with 15,000 members, The National Association of Real Estate Brokers, which is comprised of 35,000 African-American members, and the Asian Real Estate Association of America, with 12,000 members) and assume that none of them are also members of NAR (an assumption I know is false but one I’m willing to make for argument’s sake).  Doing this results in only a slight shift in the numbers (Hispanic/Latino agents would account for 7{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} of the agent base, the percentage of Black/African-American agents would increase to 6{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c}, and the Asian/Pacific Islander count would go to 4{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c}).  So this would still put two major ethnic groups at about half of what could be expected.

Although I’d like to live in a world that is free of statistics that divide us, it’s so hard for me to ignore the numbers given such a wide discrepancy.

Where do we go with this?  There are a whole lot of questions that could be discussed.  The ones that come to my mind:

  • Given the figures, is the business of buying and selling residential real estate not as attractive a career choice for the one-third of our population that isn’t White?  If so, why?
  • In an age when more and more people consider themselves color blind, do these kinds of statistics really matter?
  • If it does matter, should we assume that a real estate brokerage that has an agent base reflective of its local ethnicity (all other factors being equal) would have a competitive advantage?

5 thoughts on “Revisiting the Question of Diversity in Real Estate

  1. If America is truly becoming colorblind, then all terms like Hispanic, Latino, Asian-American, African-American etc. should be vanishing in our colloquial language. We’d simply be referring to everyone as “American”.

    But then again, heritage is important especially for many minorities (and I share the same sentiment). I don’t think it’s truly possible to be “color blind”. But I also think that recognizing people’s ethnicity doesn’t automatically mean discrimination.

    Respect can result from acknowledging people’s heritage.

  2. @Tony – thanks for your feedback. I agree that our heritage and our unique experiences should be celebrated. Freely, openly, and proudly. Where I’m hoping for color blindness is in certain important matters where these “differences” shouldn’t come into play (say in hiring practices, in the eyes of the law, or, more close to home for what we cover on this blog, when choosing a real estate agent, or an agent choosing to work with a client, etc.). I want to believe that people make these decisions in a completely non-discriminatory way – and I do believe that is the case in the vast (and growing) majority.

    I just can’t get my arms around the figures and understand why they fall the way they do. We have over a million real estate agents serving every nook and cranny of this country. Every price point, every neighborhood. The barriers to entry in this industry are very low. In so many ways those who work in real estate are open and inclusive. I’m not saying that’s not the case when it comes to race/ethnicity. But I just don’t get why the figures don’t mimic our population (or at least come a bit close).

  3. Interesting stats and point of views but maybe a comparison of other professions should be looked at such as accounting, legal and computer to make a true (if possible) evaluation. My point is maybe they do not want to get into real estate.

  4. @Austin. I know of some studies from various sources but am not aware of a single place that has studied this across various sectors. If any of our readers know a source please share. In the meantime, we’ll research it.

  5. We certainly haven’t forgotten your question, Austin. We have simply found that this information is very difficult to come by, but we’re not giving up. I came across a year-old article in The CPA Journal that you and our readers may find interesting (http://www.nysscpa.org/cpajournal/2008/108/perspectives/p7.htm). I’m trying to verify their findings and get more data, but the source looks realiable and it’s a start.

    According to this article, when comparing ethnic diversity to three other industries, residential real estate (which currently has about a 13% non-White membership) would be behind the medical profession (14%) but ahead of legal (10%) and accounting (8%).

    There’s a lot more to uncover before making any “conclusions” but it’s something to compare. Interesting (and, perhaps for many, not at all surprising).

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