1. Real Estate Voices California Association of Realtors, Nov. 13, 2013 Dowell Myers Demographic Waves of Housing Demand: Aging and Immigration

2. Overview of Topics 1 The Overlooked Equation: Housing = Demography, modified by financial factors 2 Population Age Waves -- Multifamily Trend and Outlook -- Baby Boomer Sell-Off & Replacement Buyers? 3 Immigration Waves and Settlement Dowell Myers, USC Price 4 What is the New Normal? -- Extreme Upward Mobility into Homeownership

3. The Overlooked Equation of Housing & Demography

4. People live in housing; demand = occupied units Age regularities of demand, modified by economic conditions; demography is not a dummy variable Long lag effects: 1. Arrive in market 25 years after birth 2. Live in houses 25 years after purchase 3. Generational bubble of Baby Boomers Growth in new households is crucial, also their exits 1. Native-born come of age 2. Immigrant arrivals 3. Soaring numbers of seniors are a challenge Dowell Myers, USC Price

5. Major demographic dimensions: 1. Age and generation 2. Immigrants and native-born 3. Race and ethnicity These dimensions intersect in a new generational partnership 1. Aging Baby Boomers require younger replacements in the workforce and in housing 2. Soaring numbers of seniors will depend on a much more diverse younger population

6. Impact of Population Age Waves

7. Total Population of the United States in millions

8. U.S. Population by Age Each Decade in millions Source: Dowell Myers, USC; Data from Census Bureau

9. U.S. Population Growth Each Decade in millions Source: Dowell Myers; Data from Census Bureau Dowell Myers, USC Price

10. Minority Dictatorship of New Construction Everyone else lives in existing housing Only 1% of households (growing segments) dictate type of new construction Dowell Myers, USC Price

11. Native-Born Turning Age 25, Plus Immigrant Arrivals Total Demographic Growth Dowell Myers, USC Price Myers and Pitkin 09 1 2 3 4 Myers and Pitkin, Demographic Forces and Turning Points

12. 3. Multifamily Downturn and Revival

13. Age Profile of Tenants in Recently Built Apartments Source: Dowell Myers, USC; Data from Census Bureau Dowell Myers, USC Price

15. 4. The Baby Boomer Sell-Off

16. Number of U.S. Homeowners by Age Cohort 2000 and 2010 Dowell Myers, USC Price

17. Population Growth by Age Group Last 20 Years and Next 20 Years Source: Decennial Census and 2012 Census Bureau projections Dowell Myers, USC Price

18. Soaring Ratio of Seniors to Working Age Dowell Myers, USC Price

19. Immigrant Contributions

20. Source: Census Bureau 1850 to 2010, Pitkin- Myers 2011 U.S. Generational Projections Dowell Myers, USC Price Cumulative Foreign-Born Share of U.S.

21. Changing Outlook on Immigration Dowell Myers, USC Price Alternative Projections of Net Immigration to the U.S. (1000s)

22. Growth of Immigrant Renters and Owners (Millions) Dowell Myers, USC Price Source: Dowell Myers and John Pitkin, Immigrant Contributions to the Housing Market… RIHA, Mortgage Bankers Association, 2013

23. Immigrant Trajectory From Renting to Owning Dowell Myers, USC Price Percent Homeowners of Cohort that Arrived in the 1980s Source: Dowell Myers and John Pitkin, Immigrant Contributions to the Housing Market… RIHA, Mortgage Bankers Association, 2013

24. Transition into Homeownership For Successive Waves of Immigrants in the U.S. Arriving Before 1970, 80, 90, 2000, or 2010 Data Source: Dowell Myers & Cathy Liu, Urban Policy and Research, September 2005; updated Hyojung Lee 2013 Dowell Myers, USC Price

25. Transition into Homeownership For Successive Waves of Immigrants in Major States Arriving Before 1970, 80, 90, 2000, or 2010 Data Source: Dowell Myers & Cathy Liu, Urban Policy and Research, September 2005; updated Hyojung Lee 2013 Dowell Myers, USC Price

26. Growth in Number of Renters Who are Immigrant or Native-Born (Millions ) Dowell Myers, USC Price Source: Dowell Myers and John Pitkin, Immigrant Contributions to the Housing Market… RIHA, Mortgage Bankers Association, 2013

27. Growth in Number of Owners Who are Immigrant or Native-Born (Millions ) Dowell Myers, USC Price Source: Dowell Myers and John Pitkin, Immigrant Contributions to the Housing Market… RIHA, Mortgage Bankers Association, 2013

28. Immigrant Share of Growth Dowell Myers, USC Price Renters and Owners Source: Dowell Myers and John Pitkin, Immigrant Contributions to the Housing Market… RIHA, Mortgage Bankers Association, 2013

29. All Across America

30. Immigrant Share of Growth in Renters 2010-2020 Dowell Myers, USC Price

31. Immigrant Share of Growth in Owners 2010-2020 Dowell Myers, USC Price Source: Dowell Myers and John Pitkin, Immigrant Contributions to the Housing Market… RIHA, Mortgage Bankers Association, 2013

32. What is the New Normal?

33. Population Growth by Age Group Last 20 Years and Next 20 Years Source: Decennial Census and 2012 Census Bureau projections Dowell Myers, USC Price

34. Outlook for Household Formations Recent History and Remainder of Decade Source: Census Bureau Current Population Survey/Housing Vacancy Survey Dowell Myers, USC Price

35. Trend in Homeownership? No Clue from This Short Span: 1995 to 2013 Dowell Myers, USC Price

36. A Century of U.S. Homeownership Rates Dowell Myers, USC Price

37. 5-Year Cohort Progress Into Homeownership Percent Homeowners, by Age at Beginning of Period Dowell Myers, USC Price Before the CrashAFTER the Crash Source: Dowell Myers analysis of Housing Vacancy Survey data

38. Comparison of Progress into Homeownership by Four Cohorts Observed in Same Age Intervals Dowell Myers, USC Price Source: Dowell Myers analysis of Housing Vacancy Survey data

39. What are the Takeaways? Watch the ups and downs of demographic age waves The same for ups and downs of new immigrant arrivals Immigration + revived native demand = stronger outlook Beware the flood of aging sellers – we can plan solutions We must strengthen the younger generation, increasing their capacities, and removing barriers to their success Demographics help us to think ahead so that we can plan a better future for America Dowell Myers, USC Price

40. Thank you For More Information on Housing & Demographics Visit USC PopDynamics Dowell Myers dowell@usc.edu

41. Publications Referenced in this Presentation Myers, Dowell and John Pitkin, Immigrant Contributions to Housing Demand in the United States: A Comparison of Recent Decades and Projections to 2020 for the States and Nation, Special Report, Research Institute for Housing America, Mortgage Bankers Association, April 2013. Pendall, Rolf, Lesley Freiman, Dowell Myers, and Selma Hepp, Demographic Challenges and Opportunities for U.S. Housing Markets, Bipartisan Policy Center, Washington, D.C., March 2012. Pitkin, John and Dowell Myers, Projections of the U.S. Population, 2010-2040, by Immigrant Generation and Foreign-Born Duration in the U.S., Special Report, Population Dynamics Research Group, October 2011. Myers, Dowell and John Pitkin, Demographic Forces and Turning Points in the American City, 1950 to 2040, Annals of the American Academy of Political and Social Sciences 626 (November 2009): 91-111. Myers, Dowell and SungHo Ryu, Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic Transition, Journal of the American Planning Association 74, 1 (Winter 2008): 17-33. (Winner of 2008 Award for Best Article in the Journal.) Myers, Dowell, Immigrants and Boomers: Forging a New Social Contract for the Future of America. New York: Russell Sage Foundation, 2007. NOTE: most publications are available at http://www.usc.edu/schools/price/research/popdynamics/