Transcript Slide 1

U.S. HOUSEHOLD WEALTH DECLINED BY $12 T
0
-5
-10
-$3T
HOUSING
DECLINE
-$9T
ALL OTHER
BETWEEN Q4 2007-Q4 2008
Source: US Federal Reserve Board Flow of Funds
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THE WEALTH EFFECT WILL NOT DRIVE RECOVERY
EVERY $100 Δ IN HOUSING WEALTH LEADS TO AN ESTIMATED $7
CONSUMER SPENDING.
Δ IN OVERALL
$500B LOST IN CONSUMER SPENDING BETWEEN 2006 AND
2011.
LOW HOUSE PRICE GROWTH FOR AT LEAST 5
Source: The Demand Institute
YEARS.
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OTHER INDUSTRIES WILL EXPERIENCE
THE TRANSACTION EFFECT
’06-’11
’12-’16 PROJECTED
MAJOR APPLIANCES
FLOOR COVERINGS
8%
FURNITURE
7%
TOOLS & HARDWARE
6%
6%
5%
’12-’16
0
’06-’11
-2%
-3%
-2%
-3%
-5
ANNUAL PERCENTAGE DROP IN CONSUMER SPENDING
DURING HOUSING CRASH AND POTENTIAL INCREASE THROUGH 2016
Source: The Demand Institute, BEA National Accounts, US Census Bureau,
National Association of Realtors
RENTAL DEMAND IS LEADING THE RECOVERY
0-2 YEARS
STRONG RENTAL DEMAND
3-5 YEARS
ACCELERATION OF HOME SALES
Source: The Demand Institute
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IS THE
AMERICAN DREAM
DEAD?
Source: The Demand Institute
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ACCESSIBILITY - AS IMPORTANT
AS THE HOME ITSELF
SHOPPING AND
ENTERTAINMENT
ACCESS
Source: The Demand Institute
LOCAL AMENITIES
AND SERVICES
HOUSES IN MORE
“WALKABLE”
COMMUNITIES
RENEWAL IN LARGE
URBAN CENTERS AND A
REVIVAL IN SUBURBAN
AREAS
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DIFFERENT PACES ACROSS THE US
HIGH
RESILIENT
WALKABLES
15%
REGIONAL
FUNDAMENTALS
LOW
HIGH
LOW
Source: The Demand Institute
HOUSING MARKET STRENGTH
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DIFFERENT PACES ACROSS THE US
HIGH
SLOW AND
STEADY
35%
REGIONAL
FUNDAMENTALS
LOW
HIGH
LOW
Source: The Demand Institute
HOUSING MARKET STRENGTH
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DIFFERENT PACES ACROSS THE US
HIGH
REGIONAL
FUNDAMENTALS
LOW
HIGH
DAMAGED
BUT HOPEFUL
30%
LOW
Source: The Demand Institute
HOUSING MARKET STRENGTH
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DIFFERENT PACES ACROSS THE US
HIGH
REGIONAL
FUNDAMENTALS
LOW
HIGH
WEIGHED
DOWN
20%
LOW
Source: The Demand Institute
HOUSING MARKET STRENGTH
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DIFFERENT PACES ACROSS THE US
HIGH
RESILIENT
WALKABLES
15%
SLOW AND
STEADY
35%
REGIONAL
FUNDAMENTALS
LOW
HIGH
DAMAGED
BUT HOPEFUL
30%
WEIGHED
DOWN
20%
LOW
Source: The Demand Institute
HOUSING MARKET STRENGTH
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YOUNG ADULTS HIT HARDEST
13.2%
20-24
YEAR OLDS
6.8%
OVER 25
UNEMPLOYMENT RATE
IN MARCH 2012
AVERAGE
NET WORTH
-68%
UNDER 35
1980s vs now
Source: Bureau of Labor Statistics, Pew Research Center
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BUT, YOUNG ADULTS ARE IMPORTANT PART
OF RECOVERY
43% MOVE
IN THE NEXT 2 YEARS
OVER 1/2
OF THEM WILL
RENT
Source: The Demand Institute, The Conference Board Consumer Confidence Survey (December 2011)
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THIS HOUSING RECOVERY WILL BE DIFFERENT
STRONG RENTAL
DEMAND
Source: The Demand Institute
SMALLER
HOMES
MORE ACCESSIBLE
LOCATIONS
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SHOPPING HABITS WILL CHANGE
MORE FREQUENT
SHOPPING & SMALLER
BASKETS
Source: The Demand Institute
MORE ONLINE
REPLENISHMENT
MORE INTEREST IN
LOCAL STORES
MORE EXPERIENCE
SEEKING
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SPECIFIC RETAIL MARKETS WILL GROW
ADJACENT
RENTAL MARKETS
Source: The Demand Institute
HOBBIES OUTSIDE
THE HOME
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CPG DURABLES DEMAND WILL EVOLVE
SMALL HOME
FURNISHINGS
LARGER
DURABLES
FURNITURE &
APPLIANCES
WILL CONTINUE TO THRIVE
MULTIFUNCTIONALITY
WILL BE SMALLER
Source: The Demand Institute
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CPG NON-DURABLES DEMAND IS SHIFTING
DEMAND
FOR MORE
SMALLER
PACK SIZES
VALUE-ORIENTED PRODUCTS
DUE TO LESS STORAGE
Source: The Demand Institute
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MEDIA & HOME ENTERTAINMENT WILL
CONTINUE TO THRIVE
PEOPLE STILL WATCH
OVER 150 HOURS OF TV PER MONTH
PEOPLE WILL
INCREASE THE VARIETY OF
VIDEO DEVICES
Source: The Demand Institute, Nielsen Cross Platform Report: How We Watch from Screen to Screen (May 2012)
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CONSUMERS SEEK FLEXIBLE HOME
ENTERTAINMENT
PORTABLE DEVICES
Source: The Demand Institute
INTEGRATED DEVICES
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THE SHAPE OF THE HOUSING RECOVERY WILL
CHANGE THE NATURE OF DEMAND
VALUE ORIENTED
PORTABLE
COMPACT
RENTAL
SMALLER
HOUSING
DEMAND
LOCAL
MULTIFUNCTIONAL
ACCESSIBLE
FREQUENT SHOPPING
Source: The Demand Institute
EXPERIENTIAL
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