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U.S. HOUSEHOLD WEALTH DECLINED BY $12 T

U.S. HOUSEHOLD WEALTH DECLINED BY $12 T. 0. -$ 3 T HOUSING DECLINE. -5. -$9T ALL OTHER. -10. BETWEEN Q4 2007-Q4 2008. #C360. Source: US Federal Reserve Board Flow of Funds. THE WEALTH EFFECT WILL NOT DRIVE RECOVERY.

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U.S. HOUSEHOLD WEALTH DECLINED BY $12 T

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  1. U.S. HOUSEHOLD WEALTH DECLINED BY $12 T 0 -$3T HOUSING DECLINE -5 -$9T ALL OTHER -10 BETWEEN Q4 2007-Q4 2008 #C360 Source: US Federal Reserve Board Flow of Funds

  2. THE WEALTH EFFECT WILL NOT DRIVE RECOVERY • EVERY $100 ΔIN HOUSING WEALTH LEADS TO AN ESTIMATED$7 ΔIN OVERALL CONSUMER SPENDING. • $500B LOST IN CONSUMER SPENDING BETWEEN 2006 AND 2011. • LOW HOUSE PRICE GROWTH FOR AT LEAST 5 YEARS. #C360 Source: The Demand Institute

  3. OTHER INDUSTRIES WILL EXPERIENCE THE TRANSACTION EFFECT ’06-’11 ’12-’16 PROJECTED MAJOR APPLIANCES FLOOR COVERINGS FURNITURE TOOLS & HARDWARE 8% 7% 6% 6% 5% ’12-’16 ’06-’11 0 -2% -2% -3% -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

  4. RENTAL DEMAND IS LEADING THE RECOVERY 0-2 YEARS STRONG RENTAL DEMAND 3-5 YEARS ACCELERATION OF HOME SALES #C360 Source: The Demand Institute

  5. IS THE AMERICAN DREAM DEAD? #C360 Source: The Demand Institute

  6. ACCESSIBILITY - AS IMPORTANT AS THE HOME ITSELF SHOPPING AND ENTERTAINMENT ACCESS LOCAL AMENITIES AND SERVICES RENEWAL IN LARGE URBAN CENTERS AND A REVIVAL IN SUBURBAN AREAS HOUSES IN MORE “WALKABLE” COMMUNITIES #C360 Source: The Demand Institute

  7. DIFFERENT PACES ACROSS THE US HIGH RESILIENT WALKABLES 15% REGIONAL FUNDAMENTALS LOW HIGH LOW #C360 HOUSING MARKET STRENGTH Source: The Demand Institute

  8. DIFFERENT PACES ACROSS THE US HIGH SLOW AND STEADY 35% REGIONAL FUNDAMENTALS LOW HIGH LOW #C360 HOUSING MARKET STRENGTH Source: The Demand Institute

  9. DIFFERENT PACES ACROSS THE US HIGH REGIONAL FUNDAMENTALS LOW HIGH DAMAGED BUT HOPEFUL 30% LOW #C360 HOUSING MARKET STRENGTH Source: The Demand Institute

  10. DIFFERENT PACES ACROSS THE US HIGH REGIONAL FUNDAMENTALS LOW HIGH WEIGHED DOWN 20% LOW #C360 HOUSING MARKET STRENGTH Source: The Demand Institute

  11. 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 #C360 HOUSING MARKET STRENGTH Source: The Demand Institute

  12. YOUNG ADULTS HIT HARDEST • AVERAGE • NET WORTH • 20-24 • YEAR OLDS • OVER 25 • UNEMPLOYMENT RATE • IN MARCH 2012 • -68% • 13.2% • 6.8% • UNDER 35 • 1980s vs now #C360 Source: Bureau of Labor Statistics, Pew Research Center

  13. BUT, YOUNG ADULTS ARE IMPORTANT PART OF RECOVERY 43% MOVE IN THE NEXT 2 YEARS OVER 1/2 OF THEM WILL RENT #C360 Source: The Demand Institute, The Conference Board Consumer Confidence Survey (December 2011)

  14. THIS HOUSING RECOVERY WILL BE DIFFERENT STRONG RENTAL DEMAND SMALLER HOMES MORE ACCESSIBLE LOCATIONS #C360 Source: The Demand Institute

  15. SHOPPING HABITS WILL CHANGE MORE FREQUENT SHOPPING & SMALLER BASKETS MORE ONLINE REPLENISHMENT MORE INTEREST IN LOCAL STORES MORE EXPERIENCE SEEKING #C360 Source: The Demand Institute

  16. SPECIFIC RETAIL MARKETS WILL GROW HOBBIES OUTSIDE THE HOME ADJACENT RENTAL MARKETS #C360 Source: The Demand Institute

  17. CPG DURABLES DEMAND WILL EVOLVE SMALL HOME FURNISHINGS LARGER DURABLES FURNITURE & APPLIANCES MULTIFUNCTIONALITY WILL BE SMALLER WILL CONTINUE TO THRIVE #C360 Source: The Demand Institute

  18. CPG NON-DURABLES DEMAND IS SHIFTING DEMAND FOR MORE SMALLER PACK SIZES VALUE-ORIENTED PRODUCTS DUE TO LESS STORAGE #C360 Source: The Demand Institute

  19. MEDIA & HOME ENTERTAINMENT WILL CONTINUE TO THRIVE PEOPLE STILL WATCH OVER 150 HOURS OF TV PER MONTH PEOPLE WILL INCREASE THE VARIETY OFVIDEO DEVICES #C360 Source: The Demand Institute, Nielsen Cross Platform Report:  How We Watch from Screen to Screen (May 2012)

  20. CONSUMERS SEEK FLEXIBLE HOME ENTERTAINMENT PORTABLE DEVICES INTEGRATED DEVICES #C360 Source: The Demand Institute

  21. THE SHAPE OF THE HOUSING RECOVERY WILL CHANGE THE NATURE OF DEMAND VALUE ORIENTED PORTABLE COMPACT RENTAL SMALLER HOUSING DEMAND LOCAL MULTIFUNCTIONAL ACCESSIBLE EXPERIENTIAL FREQUENT SHOPPING #C360 Source: The Demand Institute

  22. WHAT DID YOU THINK? RATE THIS SESSION USE THE MOBILE AGENDA: SELECT SURVEY FIND THE LINK FOR YOUR SESSION USE YOUR PC OR IPAD: NIELSEN.COM/C360 ACCESS THE ATTENDEE ONLY LINKS

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