BABY BOOMERS IN THE HOUSING MARKET – WHAT’S AHEAD IN THEIR GOLDEN YEARS?

Presented byCarmen Hirciag, MBASenior Research Analyst

What Defines Boomers?

1946 – 1964 (50 – 68)

76 millionCuban Missile Crisis

JFK & MLK

80%

Walk on the moon

WHO IS YOUR TYPICAL BABY BOOMER?Demographics

Typical Baby Boomer

59 Years old

58% College educate

d

79% Caucasi

an

56% Married

Median annual income: $75K

Average Age: 59

What is your age?

50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 680%

1%

2%

3%

4%

5%

6%

7%

8%

4%

6%

7%

5%

4%

6%5%

4%

6%6%

6%

7%

5%5% 5%

8%

6%

4%

2%

Age (Years)

Nearly 6/10 are Married

What is your marital status?

Married 56%

Single 26%

Other 18%

More than ½ Have College Degree

What is the highest level of education you have completed?

Some high school

High school

Some college

Vocational/technical school

Four-year college

Graduate school

0% 5% 10% 15% 20% 25% 30% 35%

1%

7%

25%

9%

33%

25%

Very Little Diversity Among Baby Boomers

What is your ethnic background?

0%

10%

20%

30%

40%

50%

60%

70%

80%

79%

9% 4% 4%4%

28% Retired, 5.6% Unemployed

What is your profession?

• Management7.9%

• Sales / retail5.6%

• Education• Engineer

4.8%

Median Annual Income: $75,000

What is your annual household income?

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

7% 6%

9%

8%

7% 7%

4%

9%

3%

9%8%

9%8%

7%

Income (In Thousands)

Current Residence

In which California county do you currently reside?

Other CA 19%

Northern CA 30%

Southern CA 51%

HOME OWNERS

3/4 Baby Boomers are Home Owners

What is your current living situation?

Own 75%

Rent 22%

Other 3%

>1/3 are First-time Buyers

Was that your first home purchase?

Yes 36%

No 64%

Average Number of Years in Current Residence: 16

How many years have you been living in your current residence?

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21-25

26-30

31-35

36+

0%

2%

4%

6%

8%

10%

12%

9%

4%4%

5%

6%

4%

2%

3%

1%

4%

2%1%

3%3%

4%

2%2%2%3%

6%

10%

9%

6%5%

Years

8/10 Purchased Homes Before 2007

What year did you purchase your home?

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

4%5%

9%

3%3%

3%2%

4%

3%

2%

3%

4%4%

3%3%3%3%

4%3%

2%

1%

3%

2%2%2%

4%

2%

4%4%

3%

3%

Year

Most Live in Single Family Homes

In which type of home do you currently live?

Single family Multifamily Condominium Townhouse Other0%

10%

20%

30%

40%

50%

60%

70%

80%72%

13%7%

4% 4%

Median Purchase Price: $229,000

What was the purchase price of the home?

0%

2%

4%

6%

8%

10%

12%

14%

16%15%

13%13% 13%

7% 7%6%

5%4%

3%

7%

5%

3%

Purchase Price (In Thousands)

Most Have Equity in their Home

Do you have equity in your home?

Yes; 92%

No; 8%

Majority Plan to Keep Home Over 20 Years

How many years do you plan to keep your home?

0-4 years

5-9 years

10-14 years

15-19 years

20-24 years

25-29 years

30-34 years

35-39 years

40-49 years

50 years

0%

2%

4%

6%

8%

10%

12%

14%

16%

7%8%

12%

9%

16%

10%

12%

6% 6%

14%

Most Don’t Plan to Use Home Equity for Income During Retirement

Are you planning on using this equity for income during retirement?

Yes; 23%

No; 77%

Majority of Respondents Would Not Consider Acquiring a Reverse Mortgage

Would you consider acquiring a reverse mortgage to assist with living expenses during retirement?

Yes; 21%

No; 79%

Only 5% Have Gone Through Foreclosure/Short Sale

Have you ever gone through a foreclosure or short sale?

Neither; 96%

Short sale; 3%

Foreclo-sure; 2%

44% Own Other Homes

How many other properties do you own?

1 2 3 4 5 6+0%

5%

10%

15%

20%

25%

30% 26%

10%

3%1% 1% 2%

Number of Additional Homes

Most Other Properties Located in CA

Where are those other properties located?

Another Country

Another State

Northern CA

Other CA

Southern CA

0% 5% 10% 15% 20% 25% 30% 35% 40%

9%

32%

22%

31%

37%

Majority of Other Properties are Investments

How are those other properties used?

InvestmentVacation /

second home

Other

0%

10%

20%

30%

40%

50%

60%60%

43%

9%

RENTERS

Median Monthly Rent: $945

How much is your monthly rent?

0%

2%

4%

6%

8%

10%

12%

7%

9%

7%7%

4%

10%

9%

7%7%

9%

3%

4%

2% 2%3%

7%

5%

Rent ($)

Affordable Rent is Top Reason for Choosing Current Residence

What was the most important reason for electing to live in your current residence?

Amenities

Quiet/privacy

Near shopping

School district

Larger space

Near family

Near work

I like the neighborhood

Affordable rent

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

1%

2%

3%

4%

4%

5%

6%

14%

48%

Nearly ½ Renters Previously Owned a Home

Have you ever owned a primary residence?

Yes 45%

No 55%

Majority Sold Home Before 2006

What year did you sell your primary residence?

Befor

e 19

85

1985

-199

0

1990

-199

519

9619

9719

9819

9920

0020

0220

0320

0420

0520

0620

0720

0920

1020

1120

1220

1320

140%

2%

4%

6%

8%

10%

12%

8%

3%

7%

2%

5%

3%

5%

8%

5%

3%

2%

7% 7%

2%

10%

2%

3%

11%

5% 5%

Many Sold Home for Family Reasons

Why did you sell your previous primary residence?

Recent rise in home values

Bankruptcy

Opted to become a renter

Short sale

Needed to move for work

Foreclosure

Needed to move for family reasons

0% 5% 10% 15% 20% 25% 30%

2%

8%

11%

15%

15%

23%

27%

Majority Rent Because they Can’t Afford to Buy

Why do you rent instead of buying?

Believe housing market will decline in the near future

No longer able to maintain a home due to health reasons

Not ready to buy

No interest in buying

Enjoy the flexibility/freedom of renting

Don't want the responsibility of owning

Can't qualify for a mortgage

It's easier to rent

Too costly to maintain property as owner

Can't afford to buy

0% 10% 20% 30% 40% 50% 60% 70%

4%

12%

13%

19%

22%

24%

27%

29%

33%

59%

Nearly ½ Renters Don’t Expect to Buy a Home

When do you expect to buy a home?

Within a year In 1-2 Years In 3-5 Years Don't know/ unsure

0%

5%

10%

15%

20%

25%

30%

7%6%

9%

30%

Improvement in Finances Would Motivate Most to Buy a Home Now

What would most motivate you to buy a home now?

Tax incentives

Improvement in credit score

Favorable interest rates

Improvement in health

Something else

Having money for down payment

Affordable home price

Improvement in finances

0% 5% 10% 15% 20% 25%

1%

2%

2%

3%

5%

14%

15%

21%

47% Have Debt that Prevents Buying a Home

What type of debt do you have that would make it difficult to buy a home?

Credit cards Auto loan Consolidated personal loan

Private loan from friend/

relative

Other0%

5%

10%

15%

20%

25%

30%

35%

35%

12%

7%

2%

11%

OUTLOOK TOWARDS THE FUTURERetirement and the Golden Years

Average Number of Years Until Retirement: 9

In how many years do you plan to retire?

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 20 25+0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

1%

4%

9%9%

3%

12%

4%3%

4%

1%

19%

2%

5%

1% 1%

11%

1%

8%

2%

Years

Majority Do Not Plan to Sell Home When they Retire

Do you plan to sell your current home when you retire?

Yes; 10%

No; 59%

Don't know/

unsure; 32%

Majority Won’t Sell Because they Like their Home

Why do you not plan to sell your current home when you retire?

78%

10%

8%5%

I like my homeI cannot afford to buy another retirement homeI plan to give the home to my child(ren)Another reason

Some Plan to Downsize

What type of new home are you planning on purchasing?

Larger

Other

Same size, but in a different location

Don't know/ unsure

Detached single-family home

Townhouse/ condominium

Smaller

0% 10% 20% 30% 40% 50%

2%

4%

9%

11%

22%

31%

47%

Others Plan to Move Out of State

Where do you plan on moving when you retire? N = 45

Another Country

Northern CA

Other CA

Southern CA

Another State

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

2%

18%

18%

18%

44%

¼ Postponed Retirement Mainly Due to Financial Hardship

Did you have to postpone your date of retirement due to any of the following?

Death of significant other

Loss of pension

Medical bills

Loss of home

Loss of retirement income

Other

Loss of assets/ income due to 2008 economic recession

Loss of employment

Did not save enough money yet

0% 2% 4% 6% 8% 10% 12% 14%

1%

1%

2%

2%

3%

4%

7%

9%

14%

> ½ Do Not Feel They have Saved Enough Money to Retire Comfortably

Do you feel you have saved enough money to retire comfortably?

Yes; 46%No; 54%

3/10 Live with their Children

Do you live with your children?

Yes, I moved in with them

Yes, they moved back in with me

Yes, they never moved out

0%

5%

10%

15%

20%

25%

2%

8%

21%

61% Live with Adult Children

Please identify the age of your children who currently reside with you.

0-5

6-10

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31-

35

36+

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

7%

9%

2%2%3%

5%

4%5%

4%

3%

5%5%

5%5%

6%

4%5%

4%

2%2%

3%2%

5%

8%

Age

Many Living with Children due to Financial Troubles

Why do you live with your children?

I lost my pension

Children lost their home

Death of my significant other

I lost my home

My health problems

I lost my employment

Children lost their job

Children have disability

Children are saving money

Children lost employment

To assist children in caring for grandchildren

Children not able to find job after college

1%

1%

2%

2%

3%

4%

4%

4%

8%

8%

10%

17%

Baby Boomers Pay for Most Household Expenses

Please select the correct allocation of responsibility for household expenses. (I pay/children pay)

Phone, cable, internet

Utilities Automobile Rent mortgage

Education Other0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100% 95%92%

88% 86%

56% 54%

12% 10%

28%

6%

26%

14%

I pay Children pay

Median Amount Paid by Children Monthly for Living Expenses: $325

How much does your child pay each month for living expenses?

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

8% 8%

3%

18%

3%

5%

8%

3%

10%

3%

8%

5%

10%

5% 5%

3%

Living Expenses ($)

Majority Worry About Children's’ Ability to Become Home Owners

Do you worry about your children’s ability to become home owners in the future?

Yes; 55%

No; 45%

2/5 Plan to Help Children with Down Payment

Do you plan to help your children with their down payment to purchase a home?

Yes; 43%No; 57%

What Financial Decision Would Boomers Change?

If you could change one financial decision that you made within the past 10 years, what would it be?

Moving to the wrong location

Cash out/ open IRA

Carry less debt/ poor credit

Retiring prematurely

Seek better job

Invest in real estate

Better investment decisions

Saving more/ spending less

0% 5% 10% 15% 20% 25%

2%

2%

4%

5%

7%

8%

19%

21%

What Keeps Boomers Up At Night?

What keeps you up at night?

Economy

World politics

TV/ internet

Health concerns

Insomnia

Ache/ pain

Job security

Work

Family issues

Stress/ anxiety

Bills/ finances

0% 2% 4% 6% 8% 10% 12% 14%

1%

2%

2%

3%

3%

4%

4%

4%

4%

6%

13%

They’re not your average grandparents.

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