What will be the economic impact of the COVID-19 crisis?
May 1, 2020
On April 28th, McKinsey & Company’s Global Managing Partner, Kevin Sneader appeared on CNBC to discuss how his firm is advising multiple governors on when and how to reopen their states. In his words, the decision hinges on one question: how do you reconcile the saving of lives with the safeguarding of livelihood?
There’s no easy answer. And with 70% of the US workforce unable to do their jobs from home, states need to consider how to make sure there is enough PPE, testing and contact-tracing in place to be confident that once they reopen, they won’t have to shut down again.
How This Could Unfold
A recent survey of over 2,000 global executives showed that many expect the recovery to look like one of the scenarios shaded in blue below (A1–A4) which lead to a V- or U-shaped recovery. In each of these, the COVID-19 spread is eventually controlled, and catastrophic structural economic damage is avoided.
Almost one third of these leaders anticipate a muted world recovery where US GDP could drop 35-40% in Q2 of 2020 and won’t return to pre-crisis levels until Q1 of 2023 (A1). A slightly more optimistic outlook was the second most anticipated scenario, reflecting virus containment by mid-Q2 of 2020 with an economic rebound following Q2 2020 (A3). [Source: McKinsey]
New Consumer Search Behavior
Buyer searches for properties dropped 36% during the peak of COVID-19—from March 10th to 24th. However, our data is showing the number of buyer searches is steadily increasing, and we are now only 15% lower than where we were before the drop.
In the 135 cities where we operate, last week Compass saw a ~20% week-over-week growth in new listings after the market spent 2 weeks at bottom.We wanted to share a few highlights that you might find particularly interesting about how Shelter-in-Place has changed what people are looking for in a home:
