1. Beyond the Recession: Dynamics Impacting Residential Real Estate in Central Ohio Robert Vogt February 2, 2011 www.VSInsights.com

2. Current trends impacting residential real estate Future trends that will influence buying/rental patterns Residential products that will be in demand

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4. Ongoing soft economy continue to hit the real estate market hard; job formations are non-existent (only 3,000 jobs BCP) Less educated households have unemployment rates double that of college grads Men have a higher unemployment rate than women Households have doubled up/moved back home to save $$

6. Understanding the Housing Consumers Seniors (65+) Older Baby Boomers (55-65) Younger Baby Boomers (46-54) Generation X (30-45) Generation Y (12-29)

7. Tenure Reversal Those households who can afford higher rents are migrating to better quality product Right now they’re not migrating to for-sale housing Generation Y is supporting (wanting) new rentals in upscale locations Empty nesters are considering for-rent housing choices in increasing numbers Homeownership for the youngest households, under age 25, increased in the 4 th quarter of ’10 from 22.3% to 22.9%

8. Demographics Influence on Future Trends Boomers continue their dominance on housing trends Gen X is looking to rebound Gen Y is looking for newest most amenity rich choices (and instant gratification) Immigrants will save some of the older, obsolete product (but not all)

9. The Boomers Responsible for all the multifamily product in 1960s and 1970s

10. Suburbanization of Boomers They took their kids and moved to the ‘burbs in the 1980s, ‘90s and ‘00s

11. The Boomer Expansion In the Columbus MSA, the age 55+ renter households will increase 19.2% between 2010 and 2015 (nearly 10,000 households) 55+ owners will increase 18.7% (34,000 households) Younger households (<55) will actually decline by 1.0%

12. What Boomers Want…. Most want to stay where they are Next 10 years will drive demand for move- down housing (rental, condos, small lot development) Real demand is probably still 10 years away Great Recession may have pushed back new housing decisions 3 to 5 years

13. Boomer Preferences….. Active lifestyles and social interaction Lifelong learning and cultural activities Proximity to shopping, events Village type neighborhoods Homes that cater to the new life stage (smaller, less maintenance) Safe environment

14. Boomers in the Future They will influence housing design in the coming decades

15. Who Will Buy the McMansions? It’s got to be Gen X

16. But…………. Homeownership rates for householders 35 to 39 declined to 60.5% in the 4 th qtr. Down more than 6 percentage points in 5 years! Foreclosure? Job loss? Still not completely explained

17. Generation Y Three times the size of Gen X (60-80 million) Seeking modern, green, tech savvy choices Want increasing choices in urban neighborhoods Only issue is falling incomes and student loans (guess why they are also moving home?)

18. Gen Y Want Walkable, Mixed-Use But what can they afford? 1/3 will pay more to walk to shop work and entertainment 2/3 say that living in a walkable community is important Half of Gen Y would trade lot size for proximity to shopping or to work Even families with children, 1/3+ would trade lot size and ideal homes for walkable, diverse communities

19. Influence of Immigrants New immigrants represent a source to rent or buy our large supply of older, obsolete product (but probably not forever) Immigrants are initially always renters Currently represent about 6.9% of total Columbus MSA population (63.7% increase over 2000 Census)

20. Holding Us Down Vacant properties will continue to increase (expected to add 2,200 more vacant units in the next five years) Functionally obsolete product will continue to adversely impact neighborhoods

21. Trends to Watch/Embrace New homes will become smaller, higher quality with expanding technology Walkable communities will be the rage (Gahanna, Westerville, Grove City, Jerome Village) Increasing renters by choice One-person households (majority will be female) will increase 5.4% over next five years (think about security and convenience) Satellite towns around Columbus will attract seniors

22. Good Luck in 2011