RESIDENTIONAL ECONOMIC ISSUES AND TRENDS FORUM May 13, 2020 | 12 - PowerPoint PPT Presentation

RESIDENTIONAL ECONOMIC ISSUES AND TRENDS FORUM May 13, 2020 | 12 PM– 1 PM Eastern Time

GDP Collapse in 2020 after a decade of growth 4 3 2 1 ??? 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 -1 -2 -3

GDP Details in 2020 Q1 2020 Q1 % change annualized rate GDP -4.8% Consumer Spending -8% Business Spending -9% Residential Investment +21% (Home building, home sales, remodeling) Commercial Structure Completion -7% Federal and State Government Modestly Positive Spending on Investment Personal Income +2% Personal Savings +152%

Spending Growth at Grocery Shops versus Restaurants % change from one year ago 40 30 20 10 0 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2020 - 2020 - 2020 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar -10 -20 -30

Consumer Retail Spending in March % change from one year ago to March Building Material and +10.4% Gardening Clothing Stores -52.5% Sporting and Hobby Stores -23.8% Department Stores -24.5% Non-Store Purchase +15.5%

Total Cases: Unemployment Insurance Filers (26 million estimated due to data lag) 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Jan 4 Jan 11 Jan 18 Jan 25 Feb 1 Feb 8 Feb 15 Feb 22 Feb 29 Mar 7 Mar 14 Mar 21 Mar 28 Apr 4 Apr 11 Apr 18 Apr 25 May 2 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2920

New Cases: Unemployment Insurance Filers: (33 million cumulative since Lockdown) 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Jan 4 Jan 11 Jan 18 Jan 25 Feb 1 Feb 8 Feb 15 Feb 22 Feb 29 Mar 7 Mar 14 Mar 21 Mar 28 Apr 4 Apr 11 Apr 18 Apr 25 May 2 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020

Maryland: New Cases Increased because of New Website for Independent Contractors 140000 120000 100000 80000 60000 40000 20000 0 Jan 4 Jan 11 Jan 18 Jan 25 Feb 1 Feb 8 Feb 15 Feb 22 Feb 29 Mar 7 Mar Mar Mar Apr 4 Apr 11 Apr 18 Apr 25 May 2 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 14 21 28 2020 2020 2020 2020 2020 2020 2020 2020

Pre-Pandemic: Unemployment Insurance Filers: In 2019 … 218,000 new filers each week … 11.3 million new first-time unemployment filers In 2019 … Yet, over 2 million net new job creations

20.5 M jobs lost in April 2020; one in three jobs lost were in leisure/ ho spitality Nonfarm Payroll Jobs Lost in April 2020 (‘000) Leisure and Hospitality -7653 Education and Health -2544 Professional and Business Services -2128 Retail Trade -2106.9 Manufacturing -1330 Other Services -1267 Government -980 Construction -975 Transportation and Warehousing -584.1 Wholesale Trade -362.8 Financial Activities -262 Information -254 Mining and Logging Employment -50 ce: BLS Utilities -3.3

Unemployment insurance benefits don’t fully replace wages in some states

Unemployment Rates Local Disaster Events: Katrina and 9-11 10 12 14 16 18 0 2 4 6 8 2000 - Jan 2001 - Jan 2002 - Jan 2003 - Jan 2004 - Jan New Orleans 2005 - Jan 2006 - Jan 2007 - Jan 2008 - Jan 2009 - Jan 2010 - Jan 2011 - Jan 2012 - Jan 2013 - Jan 2014 - Jan 2015 - Jan 2016 - Jan 2017 - Jan 2018 - Jan 2019 - Jan 2020 - Jan 10 12 0 2 4 6 8 2000 - Jan 2001 - Jan 2002 - Jan 2003 - Jan 2004 - Jan 2005 - Jan 2006 - Jan 2007 - Jan NYC Metro 2008 - Jan 2009 - Jan 2010 - Jan 2011 - Jan 2012 - Jan 2013 - Jan 2014 - Jan 2015 - Jan 2016 - Jan 2017 - Jan 2018 - Jan 2019 - Jan 2020 - Jan

Quantitative Easing including buying Corporate Debts Federal Reserve All-In 0 1 2 3 4 5 6 7 2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul Fed Funds Rate 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 2014 - Jan 2014 - Jul 2015 - Jan 2015 - Jul 2016 - Jan 2016 - Jul 2017 - Jan 2017 - Jul 2018 - Jan 2018 - Jul 2019 - Jan 2019 - Jun 2019 - Dec 2020 - Jun

No Inflation … No Worries for Now -3 -2 -1 0 1 2 3 4 5 6 2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul CPI Inflation 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 2014 - Jan 2014 - Jul 2015 - Jan 2015 - Jul 2016 - Jan 2016 - Jul 2017 - Jan 2017 - Jul 2018 - Jan 2018 - Jul 2019 - Jan 2019 - Jul 2020 - Jan

Oil Price Collapse … Global Economic Collapse … Russia and Saudi Oil War 100 120 140 160 20 40 60 80 0 2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul West Texas 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 2014 - Jan 2014 - Jul 2015 - Jan 2015 - Jul 2016 - Jan 2016 - Jul 2017 - Jan 2017 - Jul 2018 - Jan 2018 - Jul 2019 - Jan 2019 - Jul 2020 - Jan

Beef Price Rising … Cattle Price Falling Index 1.1 1 0.9 0.8 0.7 0.6 0.5 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2020 - 2020 - 2020 - 2020 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

NAR Median Home Price … 8% higher from a year ago Home Price $100,000 $150,000 $200,000 $250,000 $300,000 $50,000 $0 2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 2014 - Jan 2014 - Jul 2015 - Jan 2015 - Jul 2016 - Jan 2016 - Jul 2017 - Jan 2017 - Jul 2018 - Jan 2018 - Jul 2019 - Jan 2019 - Jul 2020 - Jan

Low Pre-Pandemic … Lower During Pandemic Inventory 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 500,000 0 2000 - Jan 2000 - Jul 2001 - Jan 2001 - Jul 2002 - Jan 2002 - Jul 2003 - Jan 2003 - Jul 2004 - Jan 2004 - Jul 2005 - Jan 2005 - Jul 2006 - Jan 2006 - Jul 2007 - Jan 2007 - Jul 2008 - Jan 2008 - Jul 2009 - Jan 2009 - Jul 2010 - Jan 2010 - Jul 2011 - Jan 2011 - Jul 2012 - Jan 2012 - Jul 2013 - Jan 2013 - Jul 2014 - Jan 2014 - Jul 2015 - Jan 2015 - Jul 2016 - Jan 2016 - Jul 2017 - Jan 2017 - Jul 2018 - Jan 2018 - Jul 2019 - Jan 2019 - Jul 2020 - Jan

Home Sales Strong Pre-Pandemic 9000 8500 8000 7500 7000 6500 6000 5500 5000 4500 4000 2000 - 2001 - 2002 - 2003 - 2004 - 2005 - 2006 - 2007 - 2008 - 2009 - 2010 - 2011 - 2012 - 2013 - 2014 - 2015 - 2016 - 2017 - 2018 - 2019 - 2020 - Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan

60% of Buyers and 90% of Sellers believe Stable Price

Pending Contracts … March Pandemic Impact shaves 20% and Likely in April and in May 120 100 80 60 40 20 0 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2020 - 2020 - 2020 - 2020 - 2020 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

Key Indicator will be Days on Market If Swift then Need More Listings to Satisfy Demand If Lingering then Trouble with Demand 60 50 40 30 20 10 0 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2019 - 2020 - 2020 - 2020 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Mortgage Application to Buy a Home … Worst is Over? 30 20 10 0 Jan 3 Jan 10 Jan 17 Jan 24 Jan 31 Feb 7 Feb 14 Feb 21 Feb 28 Mar 6 Mar 13 Mar 20 Mar 27 Apr 3 Apr 10 Apr 17 Apr 24 -10 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 -20 -30 -40

April Housing Market Indicators % change from a year ago Pending Down 25% to 30% in Midwest and South Down 45% to 55% in Northeast and West Inventory Down 40% to 45% Days on Market 25 to 30 days Time to Close 33 days to 40 days States faring better GA, TX, UT States faring worse CA, NY, MI, PA

1930s Great Depression versus 2020 Pandemic 1930s 2020 Unemployment Rate 25% 20% (?) Job Losses Steady downward for Abrupt downward 5 years for 5 months (?) Government Spending Contracted Expands To Balance Budget To Provide Income Monetary Policy Contracted Loosened to Max