Real Estate Voices California Association of Realtors, Nov. 13, 2013 Dowell Myers Demographic Waves...
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Transcript of Real Estate Voices California Association of Realtors, Nov. 13, 2013 Dowell Myers Demographic Waves...
Real Estate VoicesCalifornia Association of Realtors, Nov. 13, 2013
Dowell Myers
Demographic Waves of Housing Demand: Aging and Immigration
Overview of Topics1 The Overlooked Equation:
Housing = Demography, modified by financial factors2 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
The Overlooked Equationof Housing & Demography
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
birth2. Live in houses 25 years after
purchase3. Generational bubble of Baby
Boomers
Growth in new households is crucial, also their exits
1. Native-born come of age2. Immigrant arrivals3. Soaring numbers of seniors are a
challenge
Dowell Myers, USC Price
Major demographic dimensions: 1. Age and generation 2. Immigrants and native-born 3. Race and ethnicity
These dimensions intersectin 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
Impact of Population Age Waves
Total Population of the United Statesin millions
U.S. Population by Age Each Decadein millions
Source: Dowell Myers, USC; Data from Census Bureau
U.S. Population Growth Each Decade in millions
Source: Dowell Myers; Data from Census Bureau
Under 15 15-24 25-34 35-44 45-54 55-64 65+-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
1950s 1970s 1990s 2010sDowell Myers, USC Price
Minority Dictatorship of New Construction
Everyone else livesin existing housing
Only1% of households
(growing segments) dictate type of new
construction
Dowell Myers, USC Price
Native-Born Turning Age 25, Plus Immigrant ArrivalsTotal Demographic Growth
Dowell Myers, USC Price
Myers and Pitkin ‘09
12
34
Myers and Pitkin, “Demographic Forces and Turning Points”
3.Multifamily
Downturn and Revival
Age Profile of Tenants in Recently Built Apartments
Source: Dowell Myers, USC; Data from Census Bureau Dowell Myers, USC Price
1960s 1970s 1980s 1990s 2000-06
2007-08
2009-10
2011-13
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Percent of Construction in 5+ Unit Structures
History Recent
4.The Baby Boomer
Sell-Off
Number of U.S. Homeowners by Age Cohort2000 and 2010
15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
20,000,000
Dowell Myers, USC Price
Population Growth by Age GroupLast 20 Years and Next 20 Years
Source: Decennial Census and 2012 Census Bureau projections
Dowell Myers, USC Price
Soaring Ratio of Seniors to Working Age
1970 1980 1990 2000 2010 2020 2030 20400
5
10
15
20
25
30
35
40
45
U.S.
California
Seniors (65+) per 100 Working Age (25–64)
Dowell Myers, USC Price
Immigrant Contributions
1850
1870
1890
1910
1930
1950
1970
1990
2010
2030
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
fore-cast
Source: Census Bureau 1850 to 2010, Pitkin-Myers 2011 U.S. Generational Projections
Dowell Myers, USC Price
Cumulative Foreign-Born Share of U.S.
Changing Outlook on Immigration
Dowell Myers, USC Price
Alternative Projections of Net Immigration to the U.S. (1000s)
1970 1980 1990 2000 2010 2020 2030 20400
200
400
600
800
1000
1200
1400
1600
1800
2000
CB 2012-middle
Pitkin-Myers 2011
CB 2008-middle
1980-90 1990-00 2000-10 2010-200.0
0.5
1.0
1.5
2.0
2.5
3.0
Renters
Owners
forecast
Growth of Immigrant Renters and Owners(Millions)
Dowell Myers, USC PriceSource: Dowell Myers and John Pitkin, “Immigrant Contributions to the Housing Market…” RIHA, Mortgage Bankers Association, 2013
Immigrant Trajectory From Renting to Owning
Dowell Myers, USC Price
Percent Homeowners of Cohort that Arrived in the 1980s
1990 2000 2010 20200
10
20
30
40
50
60
70
80
90
Non- Hispanic
Hispanic
Source: Dowell Myers and John Pitkin, “Immigrant Contributions to the Housing Market…” RIHA, Mortgage Bankers Association, 2013
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
70 80 90 00 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Total Native-born
Total Foreign-born
1960s Arrivals
1970s Arrivals
1980s Arrivals
1990s Arrivals
2000s Arrivals
Census Year
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
70 80 90 00 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
CA
70 80 90 00 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
NY
70 80 90 00 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
FL
70 80 90 00 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
TX
70 80 90 00 100%
10%
20%
30%
40%
50%
60%
70%
80%
90%
IL
All Na-tive-born
All For-eign-born
1960s Arrivals
1970s Arrivals
1980s Arrivals
1990s Arrivals
2000s Arrivals
1980-90 1990-00 2000-10 2010-200
1
2
3
4
5
6
Immigrants
Native-Born
forecast
Growth in Number of RentersWho are Immigrant or Native-Born (Millions)
Dowell Myers, USC PriceSource: Dowell Myers and John Pitkin, “Immigrant Contributions to the Housing Market…” RIHA, Mortgage Bankers Association, 2013
1980-90 1990-00 2000-10 2010-200
2
4
6
8
10
12
Immigrants
Native-Born
forecast
Growth in Number of OwnersWho are Immigrant or Native-Born (Millions)
Dowell Myers, USC PriceSource: Dowell Myers and John Pitkin, “Immigrant Contributions to the Housing Market…” RIHA, Mortgage Bankers Association, 2013
1970-80 1980-90 1990-00 2000-10 2010-200
10
20
30
40
50
60
70
Renters
Owners
forecast
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
All Across America
Californ
ia
Wash
ington
Nevada
Colorado
Arizona
Rest of W
est
OregonIlli
nois
Minnesota
Ohio
Rest of M
idwest
Michigan
DC Region
FloridaTexa
s
Georgia
North Caro
lina
Rest of S
outh
New York
New Jerse
y
Massach
usetts
Connecticu
t
Pennsylvania
Rest of N
ortheast
TOTAL U.S.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%West Midwest South Northeast
Source: Dowell Myers and John Pitkin, “Immigrant Contributions to the Housing Market…” RIHA, Mortgage Bankers Association, 2013
Immigrant Share of Growth in Renters2010-2020
Dowell Myers, USC Price
Immigrant Share of Growth in Owners2010-2020
Dowell Myers, USC Price
Californ
ia
Nevada
Wash
ington
Oregon
Arizona
Colorado
Rest of W
est
Illinois
Ohio
Rest of M
idwest
Minnesota
Michigan
DC Region
FloridaTexa
s
Georgia
North Caro
lina
Rest of S
outh
New Jerse
y
New York
Massach
usetts
Connecticu
t
Pennsylvania
Rest of N
ortheast
TOTAL U.S.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%West Midwest South Northeast
Source: Dowell Myers and John Pitkin, “Immigrant Contributions to the Housing Market…” RIHA, Mortgage Bankers Association, 2013
What is the New Normal?
Population Growth by Age GroupLast 20 Years and Next 20 Years
Source: Decennial Census and 2012 Census Bureau projections
Dowell Myers, USC Price
Outlook for Household FormationsRecent History and Remainder of Decade
Source: Census Bureau Current Population Survey/Housing Vacancy Survey
Dowell Myers, USC Price
19
94
to 2
00
0
20
00
to 2
00
6
20
06
to 2
01
2
Pote
nti
al:
Retu
rn t
o A
vg
Pote
nti
al:
Avg
+ D
efe
rred
- L
ost
Imm
ig
History 2013 through 2019
0.00
0.40
0.80
1.20
1.60
Annual HH Formations (millions)
Trend in Homeownership?No Clue from This Short Span: 1995 to 2013
Dowell Myers, USC Price
A Century of U.S. Homeownership Rates
Dowell Myers, USC Price
1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 20200
10
20
30
40
50
60
70
80
Census
5-Year Cohort Progress Into HomeownershipPercent Homeowners, by Age at Beginning of Period
Dowell Myers, USC Price
2007 20120.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
65-6960-6455-5950-5445-4940-4435-3930-3425-29
2000 20050.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
65-6960-6455-5950-5445-4940-4435-3930-3425-29
Before the Crash
AFTER the Crash
Source: Dowell Myers analysis of Housing Vacancy Survey data
Comparison of Progress into Homeownershipby Four Cohorts Observed in Same Age Intervals
Dowell Myers, USC Price
25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Increment in Homeownership Rate by Cohortsin 5 Years After Beginning Date
1990
1995
2000
2007
Cohort Age at Beginning of 5 Year Period
Source: Dowell Myers analysis of Housing Vacancy Survey data
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
Thank you
For More Information on
Housing & Demographics
Visit USC PopDynamics
Dowell [email protected]
Publications Referenced in this PresentationMyers, 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/