baby boomers in the housing market – what’s ahead in their golden years? presented by carmen...
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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
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)
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%
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)
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%
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%
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%
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%
Expand Your Market
• Adapt your communications• Expand services• Understand how current economy affects choices
• Identify housing options for the 50+ market
• Navigate finance options
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