City Council told graying of America has implications for municipalities
Consumer expert says it's vital to keep T.O. a desirable place to live
By Nancy Needham nancy@theacorn.com

Thousand Oaks should start replacing its swing sets with shuffleboard courts as the baby boomers who make up the city's main demographic age and the young people disappear.

This was part of the message brought to the City Council by Douglas Robinson, a market performance expert, who spoke about the economic effects of the aging baby boom generation demographic in Thousand Oaks.

Robinson was invited to the Jan. 8 meeting as the first of three speakers scheduled to update the council on economic forecasts so city leaders can make decisions about the community's future.

"We need to start figuring out where we're going to be in the next 20 years." Councilmember Andy Fox said.

Robinson expects about 5,000 fewer children in the community in the next several years unless there is an unexpected boom in births in Thousand Oaks or a boom in immigration of young families.

That will mean schools can be turned into community centers until the next generation brings children back and the centers can be turned back into schools, Robinson said.

The speaker used local demographics to look at the local economy. Although baby boomers are usually defined as those born from 1946 to 1964, Robinson includes those born from 1938 to 1964. Echo boomers, he said, are children born around another birth increase that peaked in 1990.

He used data from a U.S. Bureau of Labor Statistics consumer expenditure survey that's been gathering information from the early 1980s.

"They know pretty much everything there is to know about us. They know what we buy, when we buy it, where we buy it and specifically at what age we buy it," he said.

"What is really important to know is that we as people, as groups of people particularly, are very predictable on what we do as we age." Robinson said.

People enter college at 18, the work force at 22, leave home and get their first apartment at 25, start having children at 27 and buy their first home at around age 32, he said.

A problem in Thousand Oaks is that the children who leave home in their 20s don't come back to the area to buy their first home because of the price, he said.

The good news: Thousand Oaks is such an attractive community to raise families that those in their 40s who are ready to trade up and purchase their second family home return to the area, Robinson said.

"That's a unique dynamic in Thousand Oaks."

But then, on average, their spending peaks at around age 47.

"We turn from spenders into savers," he said.

Though midlife crisis might make some buy expensive motorcycles or cars, most people begin to save their money for retirement. At around age 53 they may spend on vacation homes, hotels and restaurants. At around 60 an expensive RV might also be purchased. Retirement usually comes at around 63. If they are going to buy retirement homes, they'll do it at around age 65, he said.

The money saved for retirement is spent on retirement. Their consumer days are over.

"Baby boomers stop being peak spenders in 2010," Robinson said.

Japan, for example, has been through recessions when their peak spenders aged.

The U.S. felt a recession in the early 1990s that coincided with a dip in peak spenders. About 46 years prior, WWII brought a 7 percent dropoff in births that affected the economy years later.

That was just a dry run for what people can expect from 2010 to 2022, according to Robinson. He said it will be a challenging economic time until the echo boomers pull their parents out of it.

This is the first time in modern history so many spenders are turning into savers, Robinson said.

Real estate prices still high

Also affecting Thousand Oaks' economy is the fact that real estate median prices increased 130 percent from 2000 to 2006 while median income in Thousand Oaks increased only 21 percent. Similar statistics were recorded in other California areas.

Housing prices are usually thought to follow inflation or incomes, but that wasn't the case, he said.

For the country, median real estate prices went up 55 percent and the median income increased 15 percent.

Thousand Oaks has twice the number of people with college degrees and twice the median income as the rest of the country. Fortunately, the area attracts those around age 40 looking to buy their second family home.

"A lot of 40-year-olds really want to be here," Robinson said.

So, even though no one has moved in to replace the 20- and 30-year-olds who left, the city may still look forward to their children coming back when they can afford to, Robinson said.

Keeping Thousand Oaks a desirable place to live seems to be the key, according to Robinson.

Sales tax makes up about 40 percent of the city's revenue. Car sales are losing momentum, he said.

As the city's population grows older and goes into the saving phase, large consumer items will no longer be purchased.

After people have had three garage sales, they don't need anymore stuff, he said.