The document discusses trends in the US housing market, noting that most future household and new home growth will come from the 55+ demographic as the baby boomer generation ages. It analyzes household wealth, income, and homeownership rates by age group and predicts that rising interest rates will significantly impact demand from younger households due to lower savings and wealth. The presentation recommends real estate companies focus on capturing the 55+ market through targeted locations, amenities, and community designs that meet the needs of older consumers.

1. 1Copyright © 2015 by HouseCanary, Inc. All rights reserved.
The Changing Face of the New Housing Market
Southern California 55+ Council
January 15, 2015

2. 2Copyright © 2015 by HouseCanary, Inc. All rights reserved.2
President, Strategic Real Estate Products (Big Data, Investment Strategy, Consumer Targeting)
Area VP of Strategic Marketing (Investments, Consumer Strategy, Architecture)
Product Manager (Development, Research, Strategic Planning)
Big data company focused on real estate investors hone capital deployment
& consumer targeting strategy using 20,000 zip code level price forecasts & advanced analytics
Primary clients: Builders, Developers, Mortgage Banks, Hedge Funds
JP Ackerman

3. 3Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Summary
Most future growth will come from 55+
Weak growth expected from young consumers
Winning requires a segmented & focused approach

4. 4Copyright © 2015 by HouseCanary, Inc. All rights reserved.
~90% New Homes will be from 55+ and Peak Earners
12%
12%
12%
39%
39%
39%
49%
49%
49%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
2016
2017
55+
Peak
earners
(35-­‐54)
Young
adult
(20-­‐34)
Kids
(15-­‐19)
32%
31%
31%
13%
8%
8%
53%
59%
59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015
2016
2017
55+
Peak
earners
(35-­‐54)
Young
adult
(20-­‐34)
Kids
(15-­‐19)
% Breakdown of Growth % Breakdown of Growth
Source: HouseCanary, BLS, Census Bureau, Nov 2014
Breakdown of Household Growth Breakdown of Growth in New Homes Built for Sale

5. 5Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Longer-term Household Growth Driven by the Boomers
Growth in Household Requirements (by segment)
(5,000,000)
-­‐
5,000,000
10,000,000
15,000,000
20,000,000
1970
1980
1990
2000
2010
2020
2030
2040
2050
65+
45-­‐64
20-­‐44
Mix of Growth
in Household
Requirements
(by segment)
Entry level Move-up Senior
Age segment
Ages 1960-1970 1970-1980 1980-1990 1990-2000 2000-2010 2010-2020 2020-2030 2030-2040 2040-2050
20 - 44 37% 64% 56% 20% -11% 32% 25% 28% 40%
45 - 64 34% 12% 15% 66% 84% 10% -6% 28% 23%
65+ 29% 23% 29% 14% 27% 58% 81% 43% 38%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100%
Source: HouseCanary, Census
Across time, following the Boomers has been a successful strategy

6. 6Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Shift in Household Growth Has Strategic Implications
For the mid 70’s to 80’s to 90’s, majority of growth driven by households that
were in the 20 – 44 age group
• Supported significant first time market
• Move up grew as we got into the 90’s
For the 90’s to ’00 to ‘10 period, majority of growth driven by households in the
45 – 64 age group
• These are the peak earners
• Significant wealth amassed by this segment supported move-up market
• 20 – 44 age group represented very little of the growth during this period
Over the next two decades a majority of the growth will be driven by households
in the the 55+ age segment
• Approximately 20 – 30% of the growth in households will be driven by new
household formation in the 20 – 44 age group needing first time housing
• Very little growth expected in the 45 – 54 peak earner segment which has often
been behind the move up market
Entry level
Move-up
Senior

7. 7Copyright © 2015 by HouseCanary, Inc. All rights reserved.
22
Households
Current Households
(Million)
Future 2030 Households
(Million)
Avg. Wealth of segments
($k)
Homeownership rate of
segments
Boomers: Growing, Wealthier, and Own Homes
$802k
42%
62%
77%
20
21
38
$65k
$573k24
25 - 34
35 - 44
45 - 54
55 - 75
$217k
Source: Census Bureau; HouseCanary. Note: Bubble Size is shown to scale
12 $678k n/a75+
72%
23
26
61
10

8. 8Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Decline in Homeownership Except Among Oldest Cohorts
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
1980 1990 2000 2010
65+ years
15 – 24 years
25 – 34 years
35 – 44 years
45 – 54 years
55 – 64 years
Home ownership rate by age of householder
Source: HouseCanary, Federal Reserve Bank of New York, Equifax, Census

9. 9Copyright © 2015 by HouseCanary, Inc. All rights reserved.
The Wealth Factor Separates the Age Cohorts
High net worth of older cohorts offsets
the impact of rate hikes by enabling
larger down payments
Younger cohorts already hitting limits
of DTI given lower wages and increasing
debt load
Younger cohorts will be further
devalued in an increasing interest rate
environment
3.5%
10%
20%
35%
50% 50%
0%
10%
20%
30%
40%
50%
60%
0
50
100
150
200
250
Ages <35 Ages 35-44 Ages 45-54 Ages 55-64 Ages 65-74 Ages 75+
Sources: HouseCanary, Federal Reserve, Census Bureau 2013
Typical Down Payment %Median Annual HH Income & Net Worth (K)
X%
Net worth (K)
Annual HH Income (K)
Avg down payment %
Major Risk: Forecasted Interest Rate Increase - 4.3% to 6% Other Risks

10. 10Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Age Group Personal Balance 4.3% Rate 6% Rate Impact to Demand Rationale
Millennials
(15-34)
Income $59k
Worth $10k
Debt
Equity
30% 35%
-36%
• No/low savings
• Anemic income/career growth
• No / low gain from stock & housing
rebound
• Heavy debt load (school, personal)
• Hard to underwrite given QM
Young Gen X
(35-44)
Income $83k
Worth $47k
Debt
Equity
21% 25%
-24%
• Rocked by housing downturn
• Limited savings
• Heavy debt
Old Gen X
(45-54)
Income $88k
Worth $105k
Debt
Equity
18% 21% --% • Home equity
• Stock market rebound
• High income/career trajectory
Boomers
(55+)
Income $67k
Worth $180k
Debt
Equity
17% 19% --% • Large savings & net worth
• Limited housing / personal debt
• Large down payments
• Large equity investments
% Income Used for Housing
Source: HouseCanary, BLS, Census Bureau, Nov 2014
Young Households Greatly Impacted by Rate Hikes

11. 11Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Pinpointing Migration of 55+ is Critical for Investment

12. 12Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Product Optimization Example
Value of Additional Garage Count Value of Additional Bedrooms
Price / SF
$125
$143
$151
$100
$110
$120
$130
$140
$150
$160
2
3
4
+20%
+14%
+6%
Garage Count
$160
$136
$129
$122
$100
$110
$120
$130
$140
$150
$160
2
3
4
5
Price / SF
-5%
-5%
-15%
Bedroom Count
+23%
-10%
Consumers place an exceedingly high value on
incremental garage space
But, bedroom count appears to diminish value
Leverage data to discern exactly what local consumers value and what they will pay

13. 13Copyright © 2015 by HouseCanary, Inc. All rights reserved.
Capturing 55+ Demand Requires Targeted Execution
• Discriminating consumers moving to areas throughout region
• Migration patterns don’t mirror where consumers live today
• Amenities in the area as critical as those within the community
• Age-appropriate designs that ease the challenges of everyday life
• Value equation must enable purchase from within the equity of current home
• New home still viewed as an investment
• You are selling against the home they are presently in
• Floor plans that better enable the things they love (entertaining, indulging)
• Community placement & design that enhance connectivity to existing networks (social,
medical, religious, etc.)
• Enable social platform within the community (clubs, social direction, etc.)
Location
Life
Enhancing
Lifestyle

14. 14Copyright © 2015 by HouseCanary, Inc. All rights reserved.
JP Ackerman
President, Real Estate Products
HouseCanary, Inc.
300 Brannan St. #501
San Francisco, CA 94107
office: +1-866-729-7770
mobile: +1-949-444-3600
email: jp@housecanary.com