THE CE SHOP KCM QUESTIONS SURROUNDING COVID19 THE

THE CE SHOP & KCM: QUESTIONS SURROUNDING COVID-19 & THE HOUSING MARKET

ABOUT Michael Mc. Allister is the Founder and Chief Strategy Officer at The CE Shop. At one time the youngest licensed broker in Colorado, Michael's career has been focused on utilizing the best technology to educate real estate professionals across the country, no matter where they're at in their career. ABOUT David Childers is the Vice President of Content and Marketing at Keeping Current Matters (KCM). He has spent more than 20 years working within the real estate industry, focusing his career on helping real estate professionals become trusted advisors through education.

“Normally, when an economy goes into a recession it develops slowly over time…That’s not happening this time around. . It’s pretty clear that the economy is grinding to a halt pretty suddenly. ” Danielle Hale chief economist at realtor. com®

‘V’ Recovery Projected 35% 25% 15% Goldman Sachs Wells Fargo Securities Morgan Stanley* JP Morgan 5% -15% 2020 GDP -25% -35% As of 3/30/2020 Quarter 1 *Morgan Stanley Q 4 not yet available Quarter 2 Quarter 3 Quarter 4

“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our Information Management team showed the current slowdown is playing out similarly thus far. ” John Burns Consulting

Pricewaterhouse. Coopers survey of fifty leaders from a cross-section of industries… If COVID-19 were to end today, how long would you estimate it would take for your company to get back to business as usual? 66% 90% Less than a month 1 to 3 months

How Has the Housing Market Been Impacted by Previous Stock Market Crashes?

Stock Market Reaction to Previous Viruses S&P 500 % Change Virus Date Range Trading Days SARS Jan. 2003 -March 2003 38 Avian Influenza Jan. 2004 -Aug. 2004 141 -6. 9% MERS Sept. 2012 – Nov. 2012 43 -7. 3% Ebola Dec. 2013 – Feb. 2014 23 Zika Nov. 2015 – Feb. 2016 66 -12. 8% -5. 8% -12. 9% CNBC

Housing & Mortgage Crash 2007 S&P 500 Correction 10/2007 to 3/2009 -51, 0% -4, 6% 2008 -10, 0% 2009 -4, 1% Annual Home Price DEPRECIATION Black Knight & S&P 500

Dot. com & 9/11 Crash S&P 500 8, 6% 6, 6% 8, 5% 2000 2001 2002 Annual Home Price APPRECIATION Correction 9/2000 to 10/2002 -45, 0% Black Knight & S&P 500

Recession DOES NOT Equal Housing Crisis

6, 1% 6, 6% 3, 5% 1991 1980 1981 [VALUE] 2008 2001 HOME PRICE CHANGE During Last 5 Recessions [VALUE] Core. Logic National Home Price Index

Will we see a new wave of foreclosures?

Annual Home Price Appreciation 12, 5% 11, 4% 8, 6% 8, 5% 8, 7% 6, 5% 4, 4% The 6 years leading up to the housing crash 2000 2001 2002 2003 2004 2005 5, 2% 5, 5% 6, 4% 4, 8% 4, 7% The last 6 years 2014 2015 2016 2017 2018 2019 Black Knight

900 800 Housing Bubble Historic Data for the MORTGAGE CREDIT AVAILABILITY INDEX 700 600 500 400 (a report from the Mortgage Bankers Association) 300 Today 200 100 0 June 2004 June 2005 June 2006 June 2007 June 2008 June 2009 June 2010 June 2011 June 2012 June 2013 June 2014 June 2015 June 2016 June 2017 June 2018 June 2019 Today MBA

Months Inventory of Homes for Sale 8. 2 3. 1 2007 Today NAR

Percent of the median income needed to purchase the median-priced home 25, 4% [VALU E] 2006 TODAY Zillow & NAR

Total Home Equity Cashed Out by Refinance in Billions Then… Now… Year Dollars 2005 $263 B 2017 $71 B 2006 $321 B 2018 $87 B 2007 $240 B 2019 $74 B* Total $824 B Total $232 B *Using the first 3 quarter estimates from Freddie Mac and estimating $20 B for the 4 th quarter Freddie Mac

“My results do suggest that, in the absence of the panic, the declines in employment, consumption and output in the early stages of the Great Recession would have been significantly less severe. ” Ben Bernanke

Keeping. Current. Matters. com/Corona virus

“How can you differentiate yourself during a pandemic? By creating educational content that keeps your clients and prospects informed during these dark times. ” Housing Wire

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