Chris Porter | Chief Demographer cporter@realestateconsulting.com - - PowerPoint PPT Presentation

presented by:

Chris Porter | Chief Demographer

cporter@realestateconsulting.com June 6, 2019 F O R B U S I N E S S E S D E M O G R A P H I C C L A R I T Y

Goal: Clarity

A New View on Generations Huge Demographic Shifts Single-Family Rental Market

Demographic Trends Determine Future Demand

1 YEAR OLDER

0.9 MILLION DIVORCES 2.7 MILLION DEATHS 2.2 MILLION MARRIAGES 3.8 MILLION NEWBORNS

2019

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000

NUMBER OF BIRTHS

1930 1946 1965 1980 2000

SILENT GENERATION BABY BOOMERS GENERATION X MILLENNIALS Peak Birth Years

Source: Department of Health and Human Services, National Center for Health Statistics and CDC

Biggest Problem: Generations

72-year-old 58-year-old

1946 1964

BABY BO O MER S

Boomer

What Do These People Have in Common?

38-year-old 19-year-old

1980 2000

MIL L EN N IAL S

Millennial

What Do These People Have in Common?

1975 1980 1985 1990 1995 2000 2005 2010 Synchrony Financial TD Ameritrade DWM Direct Reports Boston.com Newsweek Mark McCrindle PwC Gallup Pew Gallup2 NY Times Pew2 NY Times4 TransUnion TD Ameritrade5 American Progress NY Times6 Goldman Sachs NY Times7 Elwood Carlson Howe and Strauss White House Bob Bowman, MLB

“Millennials” Are The Most Widely Debated Generation Definition

Average: 1981 to 1998

• r

ages 21 to 38

The Solution: More Clarity

Define the Generations by Decade Born to Simplify Your Decision Making

2 0 1 8 U S P O P U L AT I O N US Born Foreign Born

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 43 M 41 M 44 M 45 M 42 M 11 M

US Born Foreign Born

Those Born in the 1930s Learned to Save Early in Life

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

11 M

1930s Savers

Age 79-88

2.4% 2.1% 1.9% 1.5% 1.3% 1.3%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

Retirees Had Double the Economic Growth That Their Children Have Had

AV E R A G E G D P G R O W T H P E R P E R S O N — P R I M E W O R K I N G Y E A R S ( 2 5 - 5 4 )

R E A L G D P G R O W T H G E N E R A T I O N

1960s Equalers* 1970s Balancers* 1950s Innovators 1940s Achievers 1980s Sharers* 1930s Savers

US Born Foreign Born

The High-Achieving Earliest Boomers Have Retired

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 11 M

1930s Savers Age 79-88

1940s Achievers

Age 69-78

20% 25% 30% 35% 40% 45% 50%

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

The Achievers Led the Decline in Stay-at-Home Moms

S H A R E O F M O M S A G E D 2 5 - 3 4 W H O S TAY AT H O M E F U L L - T I M E

S H A R E O F M O T H E R S Y E A R

48% 24% 27%

US Born Foreign Born

The Innovative Boomers Are Now Retiring in Droves

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 11 M

1930s Savers Age 79-88 1940s Achievers Age 69-78

1950s Innovators

Age 59-68

10 20 30 40 50 60 70

1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017P 2018P 2019P 2020P 2021P 2022P 2023P 2024P 2025P

Surging Retirement Will Slow Economy and Create New Types of Home Demand

6 5 + P O P U L AT I O N B Y D E C A D E O F B I R T H

6 5 + P O P U L A T I O N ( M I L L I O N S ) Y E A R

Pre 1930s 1930s Savers 1940s Achievers 1950s Innovators 1960s Equalers

48 M 65 M

Retirement Surge Will Lead to Slower Rate of Job Creation, Higher Incomes

G R O W T H O F U S R E S I D E N T P O P U L AT I O N A G E S 2 0 - 6 4

Y E A R A N N U A L G R W O T H

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 1941 1943 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017P 2019P 2021P 2023P 2025P

US Born Foreign Born

More 1960s-Born Women Graduated College Than Men

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 43 M 11 M

1930s Savers Age 79-88 1940s Achievers Age 69-78 1950s Innovators Age 59-68

1960s Equalers

Age 49-58

Women Earn 58% of All College Degrees Today

P E R C E N T O F A L L B A C H E L O R ’ S A N D M A S T E R ’ S D E G R E E S C O N F E R R E D

1970

58% 58%

2016

Rising DICE – Dual-Income, College Educated

D I C E S H A R E O F A L L M A R R I E D / PA R T N E R E D H O U S E H O L D S

2% 5% 8% 11% 14% 17%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 1966 1976 1986 1996 2006 2016

S H A R E O F A L L M A R R I E D / P A R T N E R E D H O U S E H O L D S Y E A R

Surprising Societal Shift: Rising Renters for Empty Nesters

R E N T E R S H I P R AT E B Y A G E , 4 5 - 6 4

20% 21% 22% 23% 24% 25% 26% 27% 28% 29%

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 R E N T E R S H I P R A T E Y E A R

21.3% 20.9% 27.8%

US Born Foreign Born

1970s Balancers Shifted the Definition of Success to Include Success at Home

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 43 M 41 M 11 M

1930s Savers Age 79-88 1940s Achievers Age 69-78 1950s Innovators Age 59-68 1960s Equalers Age 49-58

1970s Balancers

Age 39-48

37% 35% 42%

25% 27% 29% 31% 33% 35% 37% 39% 41% 43%

1970s Balancer Homeownership at Their 10-Year High School Reunion

H O M E O W N E R S H I P R AT E F O R 2 5 - 2 9 Y E A R - O L D S

G E N E R A T I O N

6% above normal at age 28

1950s Innovators 1960s Equalers 1970s Balancers

1970s Balancer Homeownership at Their 20-Year High School Reunion

H O M E O W N E R S H I P R AT E F O R 3 5 - 3 9 Y E A R - O L D S

G E N E R A T I O N

61% 63% 52%

45% 50% 55% 60% 65%

10% below normal at age 38

1950s Innovators 1960s Equalers 1970s Balancers

Dual-Income Households Peaked in 2000

F E M A L E L A B O R F O R C E PA R T I C I PAT I O N R AT E , A G E S 2 0 – 6 4

% O F 2 0 – 6 4 Y E A R - O L D W O M E N W H O W O R K Y E A R

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

1950 1952 1954 1956 1958 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

1930s Savers 1940s Achievers 1950s Innovators 1960s Equalers 1970s Balancers 1980s Sharers 1990s Connectors

71% 37% 42% 50% 61% 69% 73% 71%

10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Almost 13% of America Now Rents a Single-Family Home

S I N G L E - FA M I LY R E N TA L H O M E S A S A P E R C E N T O F T O TA L H O U S E H O L D S

P E R C E N T O F T O T A L H O U S E H O L D S Y E A R

US Born Foreign Born

1980s Sharers Have Led the Disruptive Shift to a Sharing Economy

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 43 M 41 M 44 M 11 M

1930s Savers Age 79-88 1970s Balancers Age 39-48 1940s Achievers Age 69-78 1950s Innovators Age 59-68 1960s Equalers Age 49-58

1980s Sharers

Age 29-38

The 1980s Sharers Have Quintupled Student Debt Since 2004

S T U D E N T L O A N S O U T S TA N D I N G ( T R I L L I O N S )

$260 billion

$1.49 Trillion

2004 2019

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

1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Marriage and Kids Continue to Happen Later in Life

P E R C E N T O F 2 5 – 2 9 Y E A R - O L D S S I N G L E A N D W I T H O U T C H I L D R E N

P E R C E N T O F A L L 2 5 – 2 9 Y E A R O L D S Y E A R

1970s Balancers 1980s Sharers

18% 27% 39% 43% 56%

1940s Achievers 1950s Innovators 1960s Equalers

46%

Being Single has Allowed 1980s Sharers to Live Urban

U R B A N S H A R E O F H O U S E H O L D G R O W T H

S H A R E O F H O U S E H O L D G R O W T H D E C A D E

0% 5% 10% 15% 20% 25% 1980s 1990s 2000s 2010–2015

21% 7% 10% 8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 1980s 1990s 2000s 2010–2015

But the Suburbs Still Capture Most of the Growth

S U B U R B A N S H A R E O F H O U S E H O L D G R O W T H

S H A R E O F H O U S E H O L D G R O W T H D E C A D E

71% 79% 69% 77%

• 3
• 2
• 1

1 2 3 4 5 6 7

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85+

55–64 Empty Nester Years 20–29 Young Adult Urban Years

Urban Demand Surged as Young Adult and Empty Nesters Population Grew

R E C E N T C H A N G E I N A D U LT P O P U L AT I O N B Y A G E , 2 0 0 5 – 2 0 1 5

N E T N U M B E R O F P E O P L E ( M I L L I O N S ) Y E A R

+10.2 M +4.6 M

• 3
• 2
• 1

1 2 3 4 5 6

20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85+

Millions

Urban is Slowing as Demand Shifts to Family and Retirement Years

F U T U R E C H A N G E I N A D U LT P O P U L AT I O N B Y A G E 2 0 1 5 – 2 0 2 5

N E T N U M B E R O F P E O P L E ( M I L L I O N S ) Y E A R

55–64 Empty Nester Years 20–29 Young Adult Urban Years

+0.4M

• 0.4M

US Born Foreign Born

1990s Connectors Use Their Phones Whenever Possible

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 43 M 41 M 44 M 45 M 11 M

1930s Savers Age 79-88 1970s Balancers Age 39-48 1980s Sharers Age 29-38 1940s Achievers Age 69-78 1950s Innovators Age 59-68 1960s Equalers Age 49-58

1990s Connectors

Age 19-28

Demographics Easily Support 12.5 Million More Households Over 10 Years

N E T C H A N G E I N H O U S E H O L D S B Y D E C A D E B O R N , 2 0 1 6 – 2 0 2 5 ( M I L L I O N S )

N E T C H A N G E I N H O U S E H O L D S ( M I L L I O N S )

• 4.9
• 3.8
• 1.4
• 0.1

1.6 4.3 14.0 5.9

1930s Savers 1940s Achievers 1950s Innovators 1960s Equalers 1970s Balancers 1980s Sharers 1990s Connectors 2000s Globals

13.3 Million Losses 25.8 Million Gains

US Born Foreign Born

The Oldest 2000s Globals are Just Entering Adulthood

2 0 1 8 U S P O P U L AT I O N

Y E A R S B O R N

0.0 1.0 2.0 3.0 4.0 5.0

1930–39 1940–49 1950–59 1960–69 1970–79 1980–89 1990–99 2000-09 2010+

25 M 39 M 43 M 41 M 44 M 45 M 42 M 11 M

1930s Savers Age 79-88 1970s Balancers Age 39-48 1980s Sharers Age 29-38 1990s Connectors Age 19-28 1940s Achievers Age 69-78 1950s Innovators Age 59-68 1960s Equalers Age 49-58

2000s Globals

Age 9-18

The Economy Impacts Each Life Stage Differently

Childhood Early Career

Family Formation

Late Career Retirement

13% of Americans are Immigrants, Impacted by 1980s and 1990s Government Policies

F O R E I G N - B O R N S H A R E O F P O P U L A T I O N

Y E A R

14% 15% 13% 12% 9% 7% 5% 5% 6% 8% 11% 13%

0% 2% 4% 6% 8% 10% 12% 14% 16%

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Majority of foreign-born US population born in Europe

F O R E I G N - B O R N S H A R E O F U S P O P U L AT I O N

Technologies Impact Each Generation Differently Too

VS

Percentage of 30-Year-Olds Hitting Life-Stage Milestones Has Fallen Precipitously Compared to Past Generations

90% 89% 76% 56% 70% 57% 47% 33%

0% 25% 50% 75% 100% Live on their own Have ever married Live with a child Own a home 1975 2015

Percentage of 30-Year-Olds Hitting 'Adult' Milestones

Sources: U.S. Census Bureau; John Burns Real Estate Consulting, LLC (Data: 2015, updated quarterly†)

While many of these milestones have been delayed, over time young adults will move out on their own, get married and have

• children. In the meantime, these

younger cohorts represent significant demand in the pipeline for single-family rental operators.

Boomer and Gen X Renters Report a Spike in Desire to Keep Renting; Millennial Interest in Homeownership Declining

Renters between the ages of 53–71 expressed the least interest in homeownership, with 42% of respondents reporting no interest in ever owning a home, up from 23% in 2016.

Q: Which one of these statements best reflects your views about why you are currently renting?

Millennial Age 21–37 Gen X Age 38–52 Baby boomer Age 53–71

I have no interest in ever owning a home I want to own Renting is a good choice now

54% 68% 65% 71% 74% 40% 24% 27% 22% 18% 6% 11% 8% 7% 8%

January 2016 March 2017 August 2017 February 2017 August 2018

44% 55% 55% 51% 54% 46% 35% 33% 31% 25% 9% 10% 13% 19% 21%

January 2016 March 2017 August 2017 February 2017 August 2018

35% 39% 47% 39% 39% 42% 29% 21% 25% 19% 23% 32% 31% 35% 42%

January 2016 March 2017 August 2017 February 2017 August 2018

Most recent survey base: 365 millennials, 271 Gen Xers, 323 baby boomers; sample includes SF and MF renters. Sources: Freddie Mac Profile of Today's Renter, Multifamily Renter Research; John Burns Real Estate Consulting, LLC (Data: Aug-18, Pub: Mar-19)

Mortgage Tax Savings No Longer There for Entry-Level Home Buyers

Homeownership does not have the significant tax advantages it once did because of the increasing standard deduction, declining mortgage rates, and the recent tax policy changes. The standard deduction currently exceeds deductions for mortgage interest and property taxes by $10,658.

$6,351 ($10,658) ($12,000) ($10,000) ($8,000) ($6,000) ($4,000) ($2,000) $0 $2,000 $4,000 $6,000 $8,000 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019P

Mortgage Interest and Property Taxes in Excess of Standard Tax Deduction*

US national

Source: John Burns Real Estate Consulting, LLC (Data: 2019, updated quarterly†)

How Big is the Single-Family Rental Market?

The 15.7 million single-family rental homes represent 34% of all rented homes. There are more single-family rental homes than apartment units contained in buildings with 10 or more units.

139.2 MM Housing units¹ 14.2 MM Vacant¹

125.0 MM Households¹

45.6 MM Rented¹ 79.4 MM Owned¹

29.5 MM with no mortgage²

.9 MM above average vacant¹ª

13.3 MM average vacant¹ª

1.3 MM 30–90 days delinquent* .8 MM 90+ days 2.0 MM Mobile homes, boats, etc.¹

49.9 MM with mortgage² 47.8 MM with equity³

2.1 MM with negative equity³ 2.9 MM Attached one unit rentals¹ 14.6 MM Units in large buildings [10+ units]¹ 13.2 MM Units in small buildings [2–9 units]¹ 12.8 MM Detached one unit rentals¹

Pub: May-19

Single-Family Rentals as Percentage of Rental Housing Stock by State

Single-family rentals comprise as much as 45%+ of rental housing in Midwestern states such as Oklahoma and Kansas. Northeastern states like New York and Massachusetts see only 12%+.

Single-Family Rentals as % of Total Rental Housing Stock by State

Note: Single-Family includes attached and detached units. Sources: JCHS tabulations of US Census Bureau, 2016 American Community Survey 1-Year Estimates; John Burns Real Estate Consulting, LLC

SFR Ownership is Still Dominated by “Mom & Pop” Investors

Institutional owners/developers, those with over 100 units, have a competitive advantage over investors with fewer rental homes. Geographic concentration and technology allows institutional SFR owners to benefit from economies of scale in leasing, managing, and maintaining homes.

78% (10.8M) 8% (1.2M) 4% (538K) 6% (786K) 4% (531K) 0% 10% 20% 30% 40% 50% 60% 70% 80% 1 to 2 3 to 5 6 to 10 11 to 100 100+ (Institutional) % of Total US Single-Family Rental Properties

National Single-Family Rental Ownership by Property Count

Investor Portfolio Size

• wn fewer than 100 properties in a metro that is not counted in the national total. As a result, Institutional ownership is slightly understated, as big investors own

Profile Comparisons of Single-Family vs. Apartment Renters

Compared to apartment renters, single-family renters are older and more likely to be married with kids.

30% 37% 58% 46% 12% 17% Single- family Multifamily

Under 35 35–64 65+

Single-Family vs. Multifamily Age

38% 21% 62% 79% Single- family Multifamily

Married Unmarried

Single-Family vs. Multifamily Marital Status

48% 71% 37% 24% 14% 6% Single- family Multifamily

No Kids 1–2 Kids 3+ Kids

Single-Family vs. Multifamily Kids

Note: Single-family defined as 1-unit detached and attached (townhome) units. Multifamily defined as 2+ unit structures. Mobile home renters not included. Sources: US Census Bureau 2017 American Community Survey data via IPUMS-USA

Reasons Tenants Choose to Rent Single-Family Homes

Single-family renters value having private laundry, privacy from neighbors, and ample parking.

0% 15% 30% 45% 60% 75% Making changes to unit Landlord relationship Storage Feels like a "step up" Noise Yard Pets Size Parking Privacy Laundry Extremely important Very important

Factors That Influence Single-Family Rental Housing Choice

Sources: Terner Center for Housing Innovation; John Burns Real Estate Consulting, LLC (Data: Apr-18, Pub: Mar-19)

Why Single-Family Homes are in Demand

65% of Single-Family Rental Homes Contain Three or More Bedrooms Compared to Just 11% of Apartments Young families not in a position to own, will overwhelmingly target single-family rental properties over apartments given their life stage and preference for good schools.

Single-Family Rents Grew 26% from 2011–2018

Rent growth has historically stayed positive, even in recessionary periods (shaded in pink below). We forecast rents will increase another 9% through 2022 as poor homeownership affordability and shift toward renting props up demand.

3.7% 3.1% 2.4% 1.9% 1.6%

0% 1% 2% 3% 4% 5% 6% 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Current 2019P 2020P 2021P 2022P

US roll-up = 3.7% Historical average = 3.4%

Burns Single-Family Rent Index™ (YOY %)

Note: We calculate the US roll-up based on a weighted average of 63 markets. Source: John Burns Real Estate Consulting, LLC (Data: Mar-19; Pub: May-19)

SFR Rents Up 4% YOY Nationally

Strongest Growth in Las Vegas, Phoenix and Orlando (7%); Weakest in Houston and Cincinnati (1%)

Source: John Burns Real Estate Consulting, LLC (Data: Mar-19, Pub: May-19) *Metropolitan division **Combination of metropolitan divisions

1.2% 1.4% 2.2% 2.9% 3.1% 3.1% 3.4% 3.5% 3.6% 3.7% 4.0% 4.1% 4.6% 4.9% 4.9% 5.2% 5.5% 6.5% 6.6% 6.7% 7.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Cincinnati Houston Miami* Dallas* Indianapolis San Antonio Raleigh-Durham Denver Chicago** US roll-up (63-market) Columbus, OH Nashville Charlotte Tampa Salt Lake City Riverside-SB Jacksonville Atlanta Orlando Phoenix Las Vegas

Burns Single-Family Rent Index™

Mar-19 YOY %

73% of All SFR Rents in the Country Fall below $1,500/ Month; 50% below $1,100/Month

REITs generally operate at higher average rental rates: INVH = $1,768; AMH = $1,591; TAH = $1,361; RESI = $1,261.

13% 15% 21% 23% 27% 22% 18% 22% 19% 18% 0% 5% 10% 15% 20% 25% 30% Less than $650 $650–849 $850–1,099 $1,100–1,499 $1,500 or More Single-family Apartments

Monthly Rental Rate by Type of Rental Housing Stock

Note: Single-Family includes attached and detached units. Sources: JCHS tabulations of US Census Bureau, 2016 American Community Survey 1-Year Estimates; JBREC

Single-Family Rents More Stable and Less Responsive to Business Cycle Than Apartment Rents and Home Prices

Single-family rent growth has historically stayed positive even in recessionary periods (shaded in pink).

Resale home price appreciation is our Burns Home Value Index™ weighted average rollup of 132 markets. Single-family rent is our Burns Single-Family Rent Index™ weighted average rollup of 63 markets. Apartment rent is Reis Services, LLC 46-market weighted rollup. Sources: REIS effective rent; John Burns Real Estate Consulting, LLC; JBREC projections (Data: Mar-19, Pub: May-19)

(12.0%) (8.0%) (4.0%) 0.0% 4.0% 8.0% 12.0% 16.0% 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019P 2020P 2021P 2022P Home price appreciation Single-family rent Apartment rent

Home Price Appreciation vs. Single-Family Rent vs. Apartment Rent

National YOY % change

Builders Constructed 42K New Single-Family Attached and Detached Homes for Rent over Past Year; Up 14% YOY

5 10 15 20 25 30 35 40 45

1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Single-family homes built for rent (in thousands)

Historical average

New Privately Owned Single-Family Starts Built for Rent

Trailing-twelve months

Note: This category includes all houses built on builders’ land with the intention of renting the housing unit. A lease-purchase, rent-purchase, or other option to eventually buy the house may exist. The category also includes retirement community units, occupied under a life-lease/continuing-care arrangement. (Occupants pay an up-front fee or small monthly fees for lifelong use.) The Census does not track actions taken after the sale of built-for-sale homes; therefore, the data does not include houses purchased by investors with the intention of renting out the unit. Sources: U.S. Census Bureau; John Burns Real Estate Consulting, LLC (Data: 1Q19, Pub: May-19)

Goal: Clarity

A New View on Generations Huge Demographic Shifts Single-Family Rental Market

QUESTIONS?

Chris Porter

949-870-1218 cporter@realestateconsulting.com