Hispanic affluence just keeps surging. Years ago, it moved beyond Miami, spreading to San Antonio (third on the list) and Houston (fifth). “Florida isn’t a wealth engine anymore,” said Isabel Valdes, president of the strategic consulting firm IVC. “It’s as wealthy, but now there’s strong competition from Texas.” The list ranks markets by the number of households with incomes exceeding $150,000. Those demographics are already changing. According to a 2005 U.S. Census report, immigrants — largely Mexican — are moving beyond footholds like California and Texas, where half of all Hispanics still live, to places like South Dakota, Indiana and New Hampshire. More affluence is sure to follow. In 1996, only 5.5 percent of all Hispanic households made over $100,000; 10 years later, the new number is 8 percent. That’s every retailer’s dream: strong, hot markets.
Los Angeles
1. Number of Households: 8,079
When Antonio Villaraigosa, a high school dropout of Mexican heritage, became the first Hispanic mayor of Los Angeles last year, the power shift was clear. Hispanics, mainly from Mexico, make up nearly half the city’s population today, and L.A. has the largest Mexican population outside Mexico City. Emblems of the new affluence are everywhere. Take, for instance, the new magazine aimed at young, affluent Hispanics called Tu Ciudad. A new Latino bank in California called Promerica, which is the brainchild of its chairman, Maria Contreras-Sweet, aims to tap into the new Hispanic wealth. Los Angeles does, after all, lead the list of California cities bulging with Hispanic wealth; in 2003, the total buying power was $189 billion. Income is increasing at all levels, too. In 2008, total Latino wealth in the U.S. will rise to $1 trillion, a 55 percent increase over 2003 levels.
2. New York
Households: 7,821
An Hispanic melting pot, New York counts Cubans, South Americans, Dominicans, Puerto Ricans and more among its newly affluent. That diffusion can translate into less political clout and more marketing confusion, Valdes noted. Still, over 60 U.S. ad agencies, such as the big New York ad agency Bravo Group, are now vying for the growing Hispanic market. To target that growing spending clout, luxe firms like Gucci are adding Spanish-speaking sales assistants in key markets such as New York. More recently, Hispanic immigrants have been spilling over into New Jersey and New York’s 24 suburban counties. For example, the number of Mexicans in New Rochelle, N.Y., rose to 12,000 from under 7,000 within five years. Overall, Hispanic spending in the U.S. is expected to grow over 9 percent a year until 2020, versus 6 percent for all U.S. citizens.
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3. San Antonio
Households: 4,446
A new, “Dallas”-style Hispanic soap opera? Yes, the series is called “Alamo Heights” — a wealthy enclave in northern San Antonio — and features two upscale Hispanic families. The series mirrors reality: Hispanic wealth is moving north and east of downtown into Texas’ rolling hill country. And the wealth engine here is similar for most Hispanics: Money flows from over 21,000 businesses. The number of Hispanic-owned businesses in the U.S. soared to two million in 2004 and generated receipts of $273.8 billion, an 82 percent increase since 1997; the fastest growth was in construction and services. San Antonio, originally a Spanish settlement called San Antonio de Bexar, is over one-half Hispanic and still a magnet for Mexican immigrants.
4. San Diego
Households: 3,844
Bilingual staffs rule here, as upscale Mexicans pour over the border to buy luxury goods. And the San Diego/Tijuana region comprises the third-largest Hispanic market in the U.S.; over 56.3 million people cross the border every year. The reason? To shop. At Tiffany & Co. in the Fashion Valley Mall in San Diego, one-third of the staff is bilingual. Salespeople at Neiman Marcus are coached to spend more time with Hispanics, who shop at a leisurely pace. Coach has said it sees “significant gains in brand ownership by affluent Latinas,” and the company is expanding its stores in Southern California. Those stores are wooing Hispanic San Diegans and wealthy residents of Tijuana — where 8 percent of the population earns over $100,000 — who own million-dollar homes in upscale communities in San Diego like Rancho Del Rey or Miranda.
5. Houston
Households: 2,846
The number-one baby name here is Jose and affluent Hispanics are aggressively courted. The powerhouse duo of Houston and Dallas control a powerful cache of wealth: 61 percent of all deep-pocketed Hispanics call them home. “A lot of people here have made connections in the Republican party,” Valdes said. “They’ve learned to play the game.” That’s played out in highly lucrative government contracts in construction, as well as manufacturing and accounting, she said. Given that Hispanic families are larger than the U.S. median — 3.5 people versus 2.4 — Hispanics will outnumber Anglos 2 to 1 in Houston by 2040. These expanded, affluent families spend freely on gifts and clothes, Valdes said. “We’re not investing in real estate or stocks,” she added. “We buy things for our family members.”
6. San Jose, Calif.
Households: 2,514
Money earned from high-tech start-ups in Silicon Valley and elsewhere is quiet here. But the same Hispanic entrepreneurial spirit thrives in companies like Recourse Technologies (Internet technologies) and Refense Technologies (wireless network security software). Though venture capital groups fund less than 5 percent of Hispanic start-ups, groups like Hispanic-Net promote high-tech entrepreneurs. And in a region where a cleaning lady charges $55 an hour, an income of $150,000 is this list’s baseline for qualifying for financial assistance when buying a home in San Jose. “There are two Hispanic Chambers of Commerce in San Jose, and they’re both fighting,” Valdes said. “People think there’s not enough for everyone.” Also, as in New York, the Hispanic mix here is more diverse, making it tougher to trace the money chain as it moves south.
7. El Paso
Households: 2,450
This border city, where three-quarters of all families speak Spanish at home, elected the first Hispanic mayor in the U.S., Raymond Telles, in 1957. There is a long history of Mexican immigration to El Paso, which is 78 percent Hispanic, that translates into more second-generation wealth. The upshot: different Hispanic buying patterns between generations. “Someone who comes from foreign-born, humble beginnings isn’t drawn toward upscale brands,” Valdes said. “If you’re never raised with brands, they’re not that important.” Minority business owners rule here, and Entrepreneur magazine voted El Paso number one on its hottest cities list.
8. Dallas
Households: 2,442
Sometimes referred to as Texas’ Silicon Valley, Dallas has a booming Latino (a term that’s interchangeable with Hispanic) population, mostly Mexican. “They’re learning the ropes and they’re getting politically connected,” Valdes said. According to the 2000 census, Hispanics outnumbered blacks for the first time; over 40 percent of Dallas is now Hispanic. More than a dozen churches here hold Spanish-language masses. And since Hispanics, as a whole, are generally younger than the nation’s median age, the teen market in the U.S. is expected to grow over 32 percent in the next 15 years, driving lots of retail business at the plentiful Dallas malls.
9. San Francisco
Households: 1,825
This largely Catholic city is home to the half-hour lifestyle TV show “Latin Eyes.” But high-tech money fuels spending here, too. So customer-centric chain stores like Nordstrom are reaching out to affluent Hispanics here with programs such as coaching classes in makeup. WWD recently noted, however, that Nordstrom’s focus on cornering the Hispanic market is an exception at the high end. “This is one of the missing-in-action categories of the world,” said Carl Kravetz, chairman of the Association of Hispanic Advertising Agencies.
10. Phoenix
Households: 1,819
New Mexico Gov. Bill Richardson, nominated for a Nobel Peace Prize several times, is the country’s first Hispanic governor, and he presides over Phoenix, an older, more mature Hispanic market, where business is booming. “So many doors are opening,” Valdes said. “Phoenix is exploding with new businesses like financial services.” Nearly 40 percent of the city is Hispanic, and the group’s purchasing power exceeds $11 billion. All told, Phoenix is the second-fastest-growing Hispanic market in the U.S.