BABY BOOMERS INTHE HOUSING MARKET WHAT S AHEAD INTHEIR GOLDENYEARS? Presented by Carmen Hirciag, MBA Senior Research Analyst

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1 BABY BOOMERS INTHE HOUSING MARKET WHAT S AHEAD INTHEIR GOLDENYEARS? Presented by Carmen Hirciag, MBA Senior Research Analyst

2 What Defines Boomers?

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4 WHO ISYOURTYPICAL BABY BOOMER? Demographics

5 Typical Baby Boomer 59Years old 79% Caucasian 58% College educated 5 Married Median annual income: $75K

6 AverageAge: 59 8% 8% 7% 7% 7% 1% Age (Years) What is your age?

7 Nearly 6/10 are Married Other 18% Married 5 Single 2 What is your marital status?

8 More than ½ HaveCollege Degree 2 Graduate school 3 Four-year college 9% Vocational/technical school 2 Some college 7% High school 1% Some high school What is the highest level of education you have completed?

9 Very Little DiversityAmong Baby Boomers 79% % Caucasian/ White What is your ethnic background? Asian African Hispanic/ Latino American/ Black Other

10 28% Retired, 5. Unemployed 7.9% Management 5. Sales / retail 4.8% Education Engineer What is your profession?

11 MedianAnnual Income: $75,000 9% 9% 8% 7% 9% 9% 8% 7% 1% Income (In Thousands) What is your annual household income? 8% 8% 7% 7% 7% 9%

12 Current Residence Other CA 19% Southern CA 51% Northern CA 3 In which California county do you currently reside?

13 HOME OWNERS

14 3/4 Baby Boomers are Home Owners Other Rent 2 Own 7 What is your current living situation?

15 >1/3 are First-time Buyers Yes 3 No 6 Was that your first home purchase?

16 Average Number ofyears incurrent Residence: % 9% 8% 1% 1% Years How many years have you been living in your current residence?

17 8/10 Purchased Homes Before % 9% 8% 7% What year did you purchase your home? Before 1975 Year % 1%

18 Most Live in Single Family Homes % Townhouse Other Single family Multifamily In which type of home do you currently live? Condominium

19 Median Purchase Price: $229, % 8% 7% 7% Purchase Price (In Thousands) What was the purchase price of the home?

20 Most Have Equity in their Home No, 8% Yes, 9 Do you have equity in your home?

21 Majority Plan to Keep Home Over 20Years % 8% 7% 8% 0-4 years 5-9 years years years How many years do you plan to keep your home? years years years years years 50 years

22 Most Don t Plan to Use Home Equity for Income During Retirement Yes, 2 No, 77% Are you planning on using this equity for income during retirement?

23 Majority of RespondentsWould NotConsider Acquiring a Reverse Mortgage Yes, 21% No, 79% Would you consider acquiring a reverse mortgage to assist with living expenses during retirement?

24 Only HaveGoneThrough Foreclosure/Short Sale Foreclosure, Short sale, Neither, 9 Have you ever gone through a foreclosure or short sale?

25 4 Own Other Homes % 1% Number of Additional Homes How many other properties do you own? 5 6+

26 Most Other Properties Located in CA 37% Southern CA 31% Other CA 2 Northern CA 3 Another State 9% Another Country Where are those other properties located?

27 Majority of Other Properties are Investments % Investment How are those other properties used? Vacation / second home Other

28 RENTERS

29 Median Monthly Rent: $ % 9% 7% 9% 7% 7% 9% 7% 7% Rent ($) How much is your monthly rent? 7%

30 Affordable Rent istop Reason forchoosingcurrent Residence 48% Affordable rent 1 I like the neighborhood Near work Near family Larger space School district Near shopping Quiet/privacy 1% Amenities What was the most important reason for electing to live in your current residence?

31 Nearly ½ Renters PreviouslyOwned a Home Yes 4 No 5 Have you ever owned a primary residence?

32 Majority Sold Home Before % 8% 8% 8% 7% 7% 7% What year did you sell your primary residence?

33 Many Sold Home for Family Reasons 27% Needed to move for family reasons 2 Foreclosure Needed to move for work 1 Short sale 1 11% Opted to become a renter 8% Bankruptcy Recent rise in home values Why did you sell your previous primary residence?

34 Majority Rent Because theycan tafford to Buy 59% Can't afford to buy 3 Too costly to maintain property as owner 29% It's easier to rent 27% Can't qualify for a mortgage 2 Don't want the responsibility of owning 2 Enjoy the flexibility/freedom of renting 19% No interest in buying 1 Not ready to buy 1 No longer able to maintain a home due to health reasons Believe housing market will decline in the near future Why do you rent instead of buying?

35 Nearly ½ Renters Don t Expect to Buy a Home % 9% Within a year When do you expect to buy a home? In 1-2 Years In 3-5 Years Don't know/ unsure

36 Improvement in FinancesWould Motivate Most to Buy a Home Now 21% Improvement in finances 1 Affordable home price 1 Having money for down payment Something else Improvement in health Favorable interest rates Improvement in credit score 1% Tax incentives What would most motivate you to buy a home now? 1 2 2

37 47% Have Debt that Prevents Buying a Home % 7% Credit cards Auto loan Consolidated personal loan Private loan from friend/ relative What type of debt do you have that would make it difficult to buy a home? Other

38 OUTLOOKTOWARDSTHE FUTURE Retirement and the GoldenYears

39 Average Number ofyears Until Retirement: 9 19% 2 18% % 11% 9% 8% 8% 1% 0 1% Years In how many years do you plan to retire? % 1% %

40 Majority Do Not Plan to Sell HomeWhen they Retire Yes, Don't know/ unsure, 3 No, 59% Do you plan to sell your current home when you retire?

41 MajorityWon t Sell Because they Like their Home 8% I like my home I cannot afford to buy another retirement home I plan to give the home to my child(ren) Another reason 78% Why do you not plan to sell your current home when you retire?

42 Some Plan to Downsize 47% Smaller 31% Townhouse/ condominium 2 Detached single-family home 11% Don't know/ unsure 9% Same size, but in a different location Other Larger What type of new home are you planning on purchasing?

43 Others Plan to Move Out of State 4 Another State Southern CA 18% Other CA 18% Northern CA 18% Another Country 1 Where do you plan on moving when you retire? N =

44 ¼ Postponed Retirement Mainly Due to Financial Hardship 1 Did not save enough money yet 9% Loss of employment 7% Loss of assets/ income due to 2008 economic recession Other Loss of retirement income Loss of home Medical bills Loss of pension 1% Death of significant other 1% Did you have to postpone your date of retirement due to any of the following? 8% 1 1

45 > ½ Do Not FeelThey have Saved Enough Money to RetireComfortably Yes, 4 No, 5 Do you feel you have saved enough money to retire comfortably?

46 3/10 Live with theirchildren % 8% Yes, I moved in with them Do you live with your children? Yes, they moved back in with me Yes, they never moved out

47 61% Live withadultchildren 9% 9% 8% 8% 7% 7% 1% Age Please identify the age of your children who currently reside with you

48 Many Living withchildren due to FinancialTroubles 17% Children not able to find job after college To assist children in caring for grandchildren Children lost employment 8% Children are saving money 8% Children have disability Children lost their job I lost my employment My health problems I lost my home Death of my significant other Children lost their home 1% I lost my pension 1% Why do you live with your children? 8% %

49 Baby Boomers Pay for Most Household Expenses I pay Children pay 88% % Phone, cable, internet Utilities Automobile Rent mortgage Education Please select the correct allocation of responsibility for household expenses. (I pay/children pay) Other

50 MedianAmount Paid bychildren Monthly for Living Expenses: $325 18% 18% % 8% 8% 8% 8% Living Expenses ($) How much does your child pay each month for living expenses?

51 MajorityWorryAboutChildren's Ability to Become HomeOwners No, 4 Yes, 5 Do you worry about your children s ability to become home owners in the future?

52 2/5 Plan to Help Children with Down Payment No, 57% Yes, 4 Do you plan to help your children with their down payment to purchase a home?

53 What Financial DecisionWould BoomersChange? 21% Saving more/ spending less 19% Better investment decisions 8% Invest in real estate 7% Seek better job Retiring prematurely Carry less debt/ poor credit Cash out/ open IRA Moving to the wrong location 1 2 If you could change one financial decision that you made within the past 10 years, what would it be? 2

54 What Keeps Boomers Up At Night? 1 Bills/ finances Stress/ anxiety Family issues Work Job security Ache/ pain Insomnia Health concerns TV/ internet World politics 1% Economy What keeps you up at night? 8% 1 1

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60 THANKYOU! Questions?