Chris Porter | Chief Demographer cporter@realestateconsulting.com - PowerPoint PPT Presentation

D E M O G R A P H I C C L A R I T Y F O R B U S I N E S S E S presented by: Chris Porter | Chief Demographer cporter@realestateconsulting.com June 6, 2019

Goal: Clarity A New View on Generations Huge Demographic Shifts Single-Family Rental Market

Demographic Trends Determine Future Demand 2019 1 YEAR OLDER 3.8 MILLION 2.2 MILLION NEWBORNS MARRIAGES 2.7 MILLION 0.9 MILLION DEATHS DIVORCES

Biggest Problem: Generations 5,000,000 Peak Birth Years 4,000,000 NUMBER OF BIRTHS 3,000,000 2,000,000 1,000,000 SILENT BABY GENERATION MILLENNIALS GENERATION BOOMERS X 0 1930 1965 1980 1946 2000 Source: Department of Health and Human Services, National Center for Health Statistics and CDC

What Do These People Have in Common? Boomer 58-year-old 72-year-old BABY BO O MER S 1964 1946

What Do These People Have in Common? Millennial 19-year-old 38-year-old MIL L EN N IAL S 2000 1980

“Millennials” Are The Most Widely Debated Generation Definition Synchrony Financial TD Ameritrade DWM Direct Reports Average: Boston.com Newsweek 1981 to 1998 Mark McCrindle PwC or Gallup Pew Gallup2 ages 21 to 38 NY Times Pew2 NY Times4 TransUnion TD Ameritrade5 American Progress NY Times6 Goldman Sachs NY Times7 Elwood Carlson Howe and Strauss White House Bob Bowman, MLB 1975 1980 1985 1990 1995 2000 2005 2010

The Solution: More Clarity

Define the Generations by Decade Born to Simplify Your Decision Making 2 0 1 8 U S P O P U L AT I O N US Born Foreign Born 45 M 44 M 43 M 5.0 39 M 41 M 42 M 4.0 25 M 3.0 11 M 2.0 1.0 0.0 1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+ Y E A R S B O R N Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau 2017 National Projections

Those Born in the 1930s Learned to Save Early in Life 2 0 1 8 U S P O P U L AT I O N US Born Foreign Born 5.0 4.0 3.0 11 M 2.0 1.0 0.0 1930s Savers 1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+ Age 79-88 Y E A R S B O R N Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau 2017 National Projections

Retirees Had Double the Economic Growth That Their Children Have Had AV E R A G E G D P G R O W T H P E R P E R S O N — P R I M E W O R K I N G Y E A R S ( 2 5 - 5 4 ) 2.5% 2.4% 2.0% 2.1% 1.9% 1.5% 1.5% R E A L G D P G R O W T H 1.3% 1.3% 1.0% 0.5% 0.0% 1950s Innovators 1960s Equalers* 1940s Achievers 1970s Balancers* 1930s Savers 1980s Sharers* G E N E R A T I O N Source: John Burns Real Estate Consulting, LLC calculations of Bureau of Economic Analysis data *Prime working years not yet complete

The High-Achieving Earliest Boomers Have Retired 2 0 1 8 U S P O P U L AT I O N US Born Foreign Born 5.0 4.0 25 M 3.0 11 M 2.0 1940s Achievers 1.0 Age 69-78 1930s Savers Age 79-88 0.0 1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+ Y E A R S B O R N Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau 2017 National Projections

The Achievers Led the Decline in Stay-at-Home Moms S H A R E O F M O M S A G E D 2 5 - 3 4 W H O S TAY AT H O M E F U L L - T I M E 48% 50% 45% 40% S H A R E O F M O T H E R S 35% 27% 30% 24% 25% 20% 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Y E A R Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau, Current Population Survey, Annual Social and Economic Supplements via IPUMS-CPS; colors based on a 30-year-old mother

The Innovative Boomers Are Now Retiring in Droves 2 0 1 8 U S P O P U L AT I O N US Born Foreign Born 5.0 39 M 4.0 25 M 3.0 11 M 2.0 1950s Innovators 1.0 Age 59-68 1930s Savers 1940s Achievers Age 79-88 Age 69-78 0.0 1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+ Y E A R S B O R N Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau 2017 National Projections

Surging Retirement Will Slow Economy and Create New Types of Home Demand 6 5 + P O P U L AT I O N B Y D E C A D E O F B I R T H Pre 1930s 1930s Savers 1940s Achievers 1950s Innovators 1960s Equalers 65 M 70 60 48 M 6 5 + P O P U L A T I O N ( M I L L I O N S ) 50 40 30 20 10 2017P 2018P 2019P 2020P 2021P 2022P 2023P 2024P 2025P 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Y E A R Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau Population Estimates and 2014 National Projections

Retirement Surge Will Lead to Slower Rate of Job Creation, Higher Incomes G R O W T H O F U S R E S I D E N T P O P U L AT I O N A G E S 2 0 - 6 4 2.5% 2.0% 1.5% A N N U A L G R W O T H 1.0% 0.5% 0.0% 1941 1943 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017P 2019P 2021P 2023P 2025P Y E A R Source: John Burns Real Estate Consulting LLC calculations using US Census Bureau population estimates (1981–2016) and 2018 national projections (2017–2025)

More 1960s-Born Women Graduated College Than Men 2 0 1 8 U S P O P U L AT I O N US Born Foreign Born 43 M 5.0 39 M 4.0 25 M 3.0 11 M 2.0 1960s Equalers 1.0 Age 49-58 1930s Savers 1940s Achievers 1950s Innovators Age 79-88 Age 69-78 Age 59-68 0.0 1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+ Y E A R S B O R N Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau 2017 National Projections

Women Earn 58% of All College Degrees Today P E R C E N T O F A L L B A C H E L O R ’ S A N D M A S T E R ’ S D E G R E E S C O N F E R R E D 1970 2016 58% 58% Source: John Burns Real Estate Consulting, LLC calculations of National Center for Education Statistics data

Rising DICE – Dual-Income, College Educated D I C E S H A R E O F A L L M A R R I E D / PA R T N E R E D H O U S E H O L D S 18% S H A R E O F A L L M A R R I E D / P A R T N E R E D H O U S E H O L D S 16% 17% 14% 14% 12% 11% 10% 8% 8% 6% 4% 5% 2% 2% 0% 1966 1976 1986 1996 2006 2016 Y E A R Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau Current Population Survey ASEC via IPUMS-CPS

Surprising Societal Shift: Rising Renters for Empty Nesters R E N T E R S H I P R AT E B Y A G E , 4 5 - 6 4 29% 27.8% 28% 27% 26% R E N T E R S H I P R A T E 25% 24% 21.3% 23% 20.9% 22% 21% 20% 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Y E A R Sources: U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey; John Burns Real Estate Consulting, LLC

1970s Balancers Shifted the Definition of Success to Include Success at Home 2 0 1 8 U S P O P U L AT I O N US Born Foreign Born 43 M 5.0 39 M 41 M 4.0 25 M 3.0 11 M 2.0 1970s Balancers 1.0 Age 39-48 1930s Savers 1940s Achievers 1950s Innovators 1960s Equalers Age 79-88 Age 69-78 Age 59-68 Age 49-58 0.0 1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+ Y E A R S B O R N Source: John Burns Real Estate Consulting, LLC calculations of US Census Bureau 2017 National Projections

1970s Balancer Homeownership at Their 10-Year High School Reunion H O M E O W N E R S H I P R AT E F O R 2 5 - 2 9 Y E A R - O L D S 6% above normal at age 28 43% 42% 41% 39% 37% 37% 35% 35% 33% 31% 29% 27% 25% 1950s Innovators 1960s Equalers 1970s Balancers G E N E R A T I O N Sources: US Census Bureau Housing Vacancies and Homeownership Survey; John Burns Real Estate Consulting, LLC

1970s Balancer Homeownership at Their 20-Year High School Reunion H O M E O W N E R S H I P R AT E F O R 3 5 - 3 9 Y E A R - O L D S 65% 63% 61% 60% 10% below normal at age 38 55% 52% 50% 45% 1950s Innovators 1960s Equalers 1970s Balancers G E N E R A T I O N Sources: US Census Bureau Housing Vacancies and Homeownership Survey; John Burns Real Estate Consulting, LLC