Q1 2020 Earnings Call

[music].

Good morning, and welcome to be really T. Holdings Corp, first quarter 2820 earnings conference call via webcast.

Today's call is being recorded in a written transcript will be made available in the investor information section of the company's website later today.

A webcast replay will also be made available on the company's website.

At this time I would like to turn the conference over to really <unk> Senior Vice President a weaker Swift. Please go ahead Alicia.

Thank you.

Good morning, and welcome to religious first quarter 2020 earnings conference call on the call with me today or religion, CEO and President Randy Snyder and Chief Financial Officer Charlotte's Imminently.

As shown on slide three of the presentation. The company will be making statements about its feature result, and other forward looking statements during this call.

Statements are based on the current expectations and the current economic environment.

Forward looking statements and projections are inherently subject to significant economic competitive and other uncertainties and contingencies many of which are.

Beyond the control of management, including any statements, we make related to the expectations with respect to the ongoing cobot 19 crisis.

Actual results may differ materially from those expressed or implied in the forward looking statements.

For those who listen to the rebroadcast.

Faster. This presentation, we remind you that the remarks made herein are as of today may seven and have not been updated subsequent to the initial earnings call.

Important assumptions and other important factors that could cause actual results to differ materially from there wasn't a forward looking statements are specified in our earnings release issued today as well as our annual and quarterly FCC filings.

Also certain non-GAAP financial measures will be discussed on this call and per FTC rule important information regarding these non-GAAP financial measures is included in our earnings release earnings press release.

Finally, the relocation business three names in discontinued operations for the first quarter and.

Q1, we consolidate into really tea leaves group into the religion franchise group.

Based upon developments in our litigation related to the relocation business sale the company make reassess segment classification in future periods.

Now I will turn the call over to our CEO and President Brian Schneider.

Thank you for Jordan.

We also had better agent retention as the competitive environment remain more rational.

Operating a bit off from continuing operations was 37 million an increase of 35 million year over year.

Operating Ebbets margin expanded 300 basis points in the corridor, marking the second quarter in a row of year over year improvements.

Dropped to the bottom line this quarter, Despite higher commission split.

Realized cost savings in the corridor were driven predominantly by the actions we took late last year.

We remain laser focused on driving simplification across our business.

We took quick action on additional savings in March in response to coded, which Ryan we'll discuss in greater detail later in the call.

We've benefited from the low rate environment, which fuels substantial growth in our title business and mortgage J.V. and a quarter.

The G.R.A. mortgage J.V. continue to contribute meaningfully to our business results generating 9 million and operating either die This corridor.

We actually did a quarter with 628 million and cash in cash equivalents inclusive of regulatory cash and the 400 million, we proactively true down on our revolve or in March amid cove it.

Our total net leverage ratio was 5.2 times and the senior secured leverage ratio was 3.06 times as of March 31st 2020.

I am incredibly proud of our start to the year and or coupon results.

We have delivered solid execution and operating improvements across the business.

Given the uncertainty of coded going forward, let me now turn the call back to Ryan to talk about what we're seeing in the market and what we are doing to respond like.

<unk>.

<unk>.

You know our company to confront the dreadful code.

Biotechnology transformation keeps financially over employees smoothly transition to remote working <unk> agency branch I.V.'s in a virtual environments.

Since we moved to a virtual environment <unk> approximately 150000 transactions for mid March through the under the table were leveraging the technology investments, we've been making over the last few years.

<unk> more tucked enabled virtual transaction execution.

We've delivered new technology, and marketing product releases support more virtual home shield transactions for agent came franchisees.

We have substantially wrapped up utilization of our digital Motorization and flash closing credits.

Or title and mortgage closures.

In parallel to the multiple agent and market basing action, we made a number of rapid decisions to help <unk> obligated to cope with crisis or the corporate level and emerged strong on the other side first we moved very aggressively to implement crisis level cost savings through multiple people costs Webber's.

Marketing reductions selecting deshmukh gets pearls in real estate out.

The cost savings actions, we took in the last two weeks of March and April are expected to lower our operating costs by $80 million to $100 million each fall quarter. They are in it that.

Second we drew down 400 million in cash on a revolving credit line to ensure strong cash in hand liquidity and ended two one was 628 million in cash in cash equivalent.

Third we benefit from just business decisions, we made before the crisis began in particular, we talked with you about how we were only focused on profitable growth even at the expense of market shows that choice should benefit us during this crisis, especially compared to those who have been making unprofitable choices those trying unprofitable.

Business models or those trying to disrupt the industry with new capital intensive, but I'm profitable ideas.

And we had already adjusted or capital allocation decisions well in advance of the downturn, including focus on debt reduction stopping share repurchase is 15 months ago and not paying dividends since August or 2019.

We implemented are costing liquidity decisions early to ensure we were being aggressive in our response the length in depth of this crisis will determine how long we will need to maintain many of those actions.

Other even more options are necessary.

Now, let me pivots, what we're actually seeing in the residential real estate market based on our preliminary April data.

Starting with clothes transaction volume comparing 2020 to 2019 first we're seeing overall close transaction volume down about 20 to 25 per cent in April.

Specifically are April close transaction volume is down approximately 20 per cent in franchise in approximately 25 per cent in brokerage with the delta driven by the different geographic mix between those two businesses.

This is actually better than I thought it would be when the crisis began.

Second as you'd expect their significant geographic variation using the data from our brokerage business New York City April close volume is down about 30% in California, which went into locked down earlier than New York City close volume is also down around 30%.

Closed volumes down around 20 per cent and there are a few states that are only down kind of low single digits in April close volume, such as Texas, Minnesota in Georgia.

And while the specific franchise volume numbers not exactly the same the relative geographic performances in the same ZIP code is the brokerage data.

The worst three performing franchise geography is our New York, California, and New Jersey.

More importantly, let's talk about what we're screwing with new contracts to buy and solar home, which we refer to is open transactions in April comparing 2020 to 2019.

We were seeing April new open transaction volume down approximately 40 per cent enfranchise, approximately 50 per cent in brokerage with the delta between the two businesses again, mostly German by the geographic mix differs.

Second the.

The decline in new open transaction volume appears to have reached its peak decline in mid April.

The weekly data for mid March and April shows the decline and open transaction volume growing every week and the second half of March in early April but since the mid April peak this decline and open transaction volume, while still significant has lessened over the second half of April.

Finally, there are substantially fewer million dollar plus homes coming onto the market and going under contract in April.

This mix changes driving lower overall average price for April open transactions, we did not see this high in price affecting the April close transactions.

So fundamentally you know the data we've seen in late March and April is probably better than I personally would've guessed heading into the crisis, especially the mid April, peaking we've observed in new open transaction volume declines.

Well, we're excited to see the improvement since mid April we're not running away with our excitement because it's only a few weeks of trend that could obviously change and as I already told you the decline and new open transaction volume in the second half of April is still significant.

So let me now shift to what we're seeing on the consumer side.

Tumors are clearly still engaged in housing and demand still seems to be out there even if some of its pent up for awhile given the correct.

Crisis, well bold new listening to new contracts are down in April consumer searches are actually up substantially on our web sites and had been recorded up on other public facing housing web sites.

Searches and viewings have shifted to more to single family homes and you've all seen multiple articles about the increased interest in suburban living well, we are not sociologist a shift to a more dispersed living could be an enduring change from <unk> that would trigger us and contribute a substantial number of housing transactions.

Refinance volume is definitely up substantially and in the past week 15 mortgage applications for home purchase just start to trend up.

And we have a huge number of stories of consumers interacting with agents and transacting, a new creative ways to get deals dot.

Frankly, we're seeing anyone in the market now is serious about getting transaction done despite the crisis.

So overall kind of based on what we're seeing we believe there's gonna be pent up inventorying consumer demand close cobin.

Since housing is not a perishable good we believe the list you know transaction volumes will improve in geography as as they reopened we're seeing a bit of green shoots already in our weekly data from select geography is and there have been some public articles to that effect also.

All of this will be subject with what <unk> subject to what happens with the macro but those are the consumer trends that we're seeing in this crisis.

On the agent side.

I've been excited by the agility agents in reality have demonstrated to continue to get deals done in a social distancing world agents are using technology, both Realogy technology, and third party technology more and in new ways tell customers buying so homes, we're seeing an adoption acceleration of our technology products.

We're excited by rapid technology product enhancements, we've deployed including virtual home tours, expanding virtual staging new online marketing capabilities and increasing digital payment options.

We also like the creativity were seeing from agents and employees to complete the last mile of real estate transactions using our remote <unk> product for title or flash close product for mortgage and operational changes like our title company doing drive through title in mortgage closures.

When people are getting creative to take care of our most vulnerable customers. We've had people witness a transaction standing outside of a closed window for and immunocompromised customer I'm proud of what our agents and employees are doing to help customers safely.

So pulling way up you know we're in one of the most uncertain economic environments in recent history.

Watching the data closely we're making aggressive corporate decisions early and we're using substantial creativity in the housing market to support agents and customers.

We're doing all this to set up <unk> navigate this uncertain economic environment.

If the housing market comes back quicker.

As a few market watchers, like nor and Fannie Mae are predicting or if the recovery takes longer.

We remain laser focused on moving quickly on the things in our control to ensure we whether this storm in emerged strong.

And at a higher level you know one of the things I've learned from past crises is the is that there's often bull a flight to scale businesses answer quality brands like ours crises also often expose on profitable business models or in profitable attempts or disruption, creating new opportunities for establish players.

So we're working hard to be a beneficiary both of those phenomenon, especially given our demonstrated Q1 momentum.

We look forward and navigating this crisis <unk> and you're taking advantage of opportunities it will occur in our industry.

With that we will take your questions.

Right.

To ASCII.

Do you really need to press star wine on your telephone keypad.

<unk>.

Request to press the pound key please let me two questions to one question in one follow up.

<unk> well we <unk>.

The first question is on the line and Steven can with Capricorn I, It's fine.

Yeah, and things like guys a lot of Super interesting information you gave there and tons of questions, which I'm sure a lot of my peers are going to ask but first I hope you all are doing well and it was good to hear that Hmm you started to see some improvement in the overall.

Good.

My first question relates to the strong March in performance in the corner you address the cost savings that you took in response to coated in March.

And you quantify that I believe is $80 million to $100 million on a quarterly basis, while in effect to my question is can you be a little more specific about the permanent of these it's any portion about 80 to 100 permanent and does it include the some portion of the 70 to nine.

Million previous costs save sky or are they completely independent.

Sure I think yeah. So they are completely independent.

And as far as what per cent will remain yeah. They this there's a piece of that that will definitely remain but the broader bats are around salary changes furloughs marketing changes, which would definitely very much volume. So there's a piece of that that would remain I would also like to point into the fact that that's what we've already.

And clearly it's still relatively early in the year. So we're always working for additional cost apps actions that we may have more information to share with you at a later date. So a big piece of that 80 to 100, you know the Larry button volume does not include that previous seven for nine D., which is separate from that.

Which is what you're mostly saying in the queue. One results and obviously, we're always working on more cost action. So that's how I would that frame that and Stevinus. Ryan <unk> you were the last person we got to see from this group. So hope you were doing well.

One of the things that we're also doing those is prospective as many companies are is how do you use. This this time a crisis frankly to re imagine work right. We're we're finding a bunch of stuff, we're able to do either with more productive or lower costs or even higher you know employee satisfaction universal and.

Firemen, and and kind of forced adoption is helping to six already some of that stuff and so you know Charlotte I think did it well right, which is we have the cost stuff earlier that a separate we've got this additional a lot of which will depend how the crisis involved but then there's gonna be whatever happens on our reimagination work and I'm excited about that.

And you know, we don't have any numbers to share with you on that yet, but knowing that we're one of many companies taking on that challenge and can see some different things already I find exciting and wanted to share with you.

Yeah that's.

Yeah, that's very encouraging [noise] just across from a little bit more on the costs saves that was very helpful. But can you give us a sense for up to 79 D. program 70 to 90 million Conte program. You previously outlined how much of that the fell roughly in one q. what was the allocation between brokerage and franchise.

Size and then lastly, just a housekeeping can you remind me what the big buckets of your costs are the way you look at them I'm thinking specifically to things that might be addressed by that virtual environment changing things that you just mentioned sure sure absolutely. So it's relatively straight lines that 72.

<unk>. So it was slightly higher in the first quarter, so slightly more than a quarter square isn't that bad it's relatively straight line as far as the Benson brokerage person franchise. It was predominantly on the brokerage side, but you would also see some enfranchise and incorporate so I I would think it.

Be you know heavier on brokerage, but then bits enfranchise incorporate as well and <unk> well, there's the last piece of that.

Cost about.

Yeah.

Yeah, Yeah. So it's predominantly on two things switches workforce optimization and <unk> <unk> optimization. So those it's basically people costs and the costs associated with our facilities. So that was last shares program.

Thanks very much.

Your next question, what's on the line of credit skimming, Tony with Compass point.

That's good morning thing sticking my cool.

<unk> Oh right right.

I wanted to you at any update on do given that <unk>. The the additional costs announced that you had in the survey issue. If you had thoughts on your leverage ratio throughout the year based on what you're seeing on transaction volume. You know is there any concern are you confident that you're you're fine from the senior cigarettes on.

Yeah, So first and foremost obviously, we are in confined set the senior citizens leverage ratio. Yeah. Clearly we have models many different scenarios and so we did move quickly to take our cost action.

Mostly as possible, but they're they're additional costs factions, we would take up the volume must have done in different directions. So we have many many scenarios. We've played out and those kind of volume side, but also on the cost reduction side and yeah. We are in compliance today.

Alright, that's great.

<unk> on the on virtual touring you know you mentioned your application.

Are most of your burbridge enfranchise agent using something they you're offering are they using third party offering so I'm trying to understand you know if this is accelerating them more into your ecosystem.

Helping you know kind of broad base virtualization.

Yeah. So great question, Chris <unk>, a two part answer so.

I sat in the script.

<unk>.

The the adoption of our tech product fire agent made has absolutely accelerated and we're real excited about that and there's a lot of different pieces, obviously to that but.

You know I would actually say I, but I I don't think they're just using I I know for sure they're not just using our products out there and I'm fine with that because I'm, an open architecture Guy I wasn't able to use whatever.

You know for virtual tours I mean people are using you know matter port and stream and you know people will just you know.

You know have agents doing stuff with face time and stuff I mean is and so I'm I'm good with all that but we are getting more <unk> more or adoption, which we think will help us in the longer term and then we want to be or support them with other good products. If that's what they want to use and make it easy to integrate those in our ecosystem with A.P.I. So.

So we are seeing more adoption of our stuff boat, but you know I loved the creativity. Our agents are using of whatever is working for them and their customer.

And yeah, and and we're going to you know continue to try to support an open architecture more than you know require our technology, but but we liked the increase adoption of our technology. During this time, which we absolutely have seen.

That's great and just one quick housekeeping on the 80 to 100 million is that inclusive.

A reduction in the marketing fund you know the pass through expense.

Yes. It is that's a small piece of it can be on it yeah.

Thank you.

Are you so much.

Sure.

There next question it's on the line as Matthew He was born carries.

[noise] Hey, the morning hope everyone's doing well thanks for all the detail today I wanted to ask knock on the cost savings side sort of beyond the the near term.

I guess austerity measures is there any opportunity to accelerate any of the you know original cost savings plans that or you know that are obviously meant to be a little more permanent you know accelerating footprint rationalization things like that.

Absolutely. So I think Brian tried to mention it on the first question that we got from C.. Then that we are certainly taking advantage as well call a bit of a cultural shift to people doing much more willing to work and virtually style. I think you know there's a lot of side benefits to that costs are certainly one of them and play.

Satisfaction and <unk> mentioned is it certainly another one so I think there's a lot of really interesting things that were evaluating with regard to you know just how we work and <unk>, we actually need so absolutely. That's definitely it's not included in the 80 to 100 that we mentioned.

And there certainly is an opportunity to advance path.

Okay understood and then on the competitive environment sort of amidst all the all of this I mean I guess you know you you guys showed continued shows strong progress there so I guess.

Over the past six weeks or so would it be seen with sort of your on recruitment and retention ability to proceed through all this and then have you seen the competition acting through this as well like.

Yeah. So let me start with Q1, you know Q1 was definitely a more rational competitive environment, just like four was especially compared to you know cute too and Q3 last year and you know showed up in our number Charlotte mentioned you know we had strong agent growth again into one are retention and Q1 was better.

So you know, we really like our two one and we like the competitive environment there.

You know the last six weeks, it's been a little bit harder bluntly to read because.

Both because we don't actually have the april's data yet for what happened through the the whole month of April on the record inside when we look across ecosystem on our side, there's been some some slow down because we've transition you know people frankly, just some crisis management during that time, when getting the health and safety our employees and agents was.

More important than getting the incremental recruit kind of thing, but we continue to do it and we continue to focus our our managers on it and I just don't have enough data to give you like a different competitive environment yet for April, but but were you know we're so focused on it but as we've all had.

There's been this kind of destruct big destruction during the time that the you know I've taken away a little bit from that which is why my script I taught it truthful I I love Dark you one momentum. If you think about you know we made more money in 2020 into one that we didn't do that was 19, even if all the disruption and pressure between now and then love them.

Medicine, but you know code kind of as you know kind of eclipse that I think we can get it back obviously I believe that but you know.

I think tell you knew more about Cove. It is the important thing right now we have kept going on to other things also the urban growth like all the franchise side. You know we did all you know we've now got multiple kind of corkran companies out there that are.

<unk>.

Building that franchise ran all of that happening Q1. So we're still focused on that kind of stuff too early to say about April.

And obviously, a a big a a big curve ball, we all got but but we liked the Q1 momentum and hope we can continue it in the additive recruitment retention you know question that you ask.

Got it thanks for all the details.

Your next question based on the line up Rhianna Mckeveny with.

Sheets.

I think you so much and then.

Right.

Intending to do well and and thanks, so much for all the detail I think the commentary on April to closings and particularly the new contracts was very helpful. In the next day lines are really closely with one of the survey.

Work, we've done lately. So you know all things considered mystery definitely good to see the the less negative trends phone in your business as well. So question on kind of franchisee an agent side of things. So a month ago. You know you put out some of the efforts are doing to help franchisees.

From cash flow and financial perspective, I guess first question is just how is the receptionist and and generally speaking how're you feeling about the franchise space you know kind of fighting tree would make me through this period and then on the agent side of things I think the number you cited in there in the release was from.

Per cent growth brokerage, which is very solid.

You know what are you seeing even past.

You can say in tape cool is the dynamic round, even count changing you know how are those agents kind of staying staying involved in this you know from from home environment.

Movements even since.

Yeah. So let me start with your second question you know like my earlier answer I don't have all the data on <unk>.

Grow from kind of any sort of an industry standpoint, you know again for US we saw a little less momentum in April in part because of you know how focus we were on both you know could be universal environment to health and safety stuff.

Oh, and you know just supporting agents doing transactions more virtually so you know maybe a little less time for recruiting but I think we're kind of getting back to that as we get to this semi new normal that maybe we're in right now, but we it's a huge focus for us and it's going to remain focused for US you know on the franchise east side.

Side, you know, we're we're <unk>, we think we're entering the crisis with a bit of a healthier franchise system and in the last prices frankly, and we've been really pleased with what we've seen from our franchisees in the last month, it's important topic, we got to watch it closely and work with them, but you know we were proactive in front of provide some or leave I think that was well received.

You know the the franchise consolidation we've been telling you about for the last few years, where a bunch of our stronger franchisees of an absorbing the weaker ones I think helps with the help of the ecosystem. There and then you know we have great franchisees and and you know I think all of them learned the lesson from the 2008 downturn.

And they have been very proactive in the last six weeks around their cost base I've seen it you know firsthand talking to them and I. That's a good thing and then finally and you shouldn't underestimate. This you know the unprecedented levels of fiscal and government assistance available here is a real thing and it's available for both franchise, even agents right and.

Don't think you can overestimate how helpful that is a time and you know we've been excited.

But our franchise even gave it to take advantage of the program as part of our value proposition. We've actually been running you know webinars for both for franchisees around.

Taking advantage of the cares Act P.P.P. program in E.I.D.L. and we're really excited by you know we have literally thousands of franchisees join those kinda webinars to listen to what I've seen some of our experts from outside our company.

You had to say on those and then we've all been trying to do the same on ages, we went out and and partnered with a small business focus land or who was willing to do kind of a dedicated processing landing page for real estate agents as independent contractors to help them apply for some of those governed.

Assistance, if appropriate which is you know a pretty specialized category with a lot of complexity, but they were great kind of helping.

You just where through that stuff. So you know look it's a it's a crazy time for I think all companies, but I think our franchisees system is healthier than it was going into the last prices for the reasons I just said I liked the proactive actions are doing and you know, we're we're going to continue to do a weekend obviously to.

Help and support them through this crisis.

That's very helpful. Thank you run and <unk> when one other question. So some of the strategic initiatives that you put out or over the last year or two whether it's a social engine with Facebook for real Idolize real should return key can you just give it an update on kind of where each of these these programs said as far as kind of being act diverse maybe being Paul.

You know and then especially on the on line suicide, whether through through the Facebook partnership for Turkey et cetera.

You know are you seeing mystery to stay at home.

Through into you know more engagement from agents for those programs mortgage interest for consumer towards his programs you know any update there would be helpful. Thank you sure. Yeah. Let me just kind of give you a a laundry lists your credit and try to hit a bunch of them. So we've actually on some of the things you talked about been pushing faster so socially at engine with based but for example, we did it.

Earlier release, then we'd planned because of Kobe to introduce a new capabilities to help agents, even more with some of their online marketing. We're real excited about that you know we went ahead and actually did do a soft launch of the A.R.P. program.

We didn't spend a bit some of the big marketing dollars. We were planning because of code that we went ahead into the soft launch we've actually already closed some transactions from that you know less than about six weeks. Later, so we're really excited about that and real G. Military awards continues to put forward a with a lot of trash it about doing really well you know.

A couple things that have changed one is you mentioned real sure, which is kind of and I buying partnership we had with a slightly different motto, we use home partners or America for the capital and the source of that we have pauses that you know Ah Ah because it just didn't seem like the right thing for either of us when we kind of went into covert here.

And then you know the Turkey program the value proposition into turnkey program, which we you know, we piloted with Amazon and 15 studies.

The value proposition to that is all built around in homes services in in home installation and so you know we together kind of made the joint decision that we were going to suspend that because we.

You know, we think helping people smart home product for their own services.

Choir people being in someone's home just doesn't work in a covert kind of social distancing world. So we really liked the turnkey pilot program, but we ran into this thing that really just cut the core proposition kind of off at the past and you know we an Amazon we had a decision point on the next phase and what we're going to do that.

In April.

And in a code world bluntly it didn't make much sense to continue that pilot. So we're going to keep being creative on lead generation opportunities like A.R.P. et cetera, but you know you know you're not going to hear that much for us about turn key given code because of the way, it's kind of eviscerated the value proposition. The thing was built on.

Thank you.

Your next question, it's on the line of Tommy tooling with K.B.W.

Oh, the money guys I just wanted to ask about the outlook for <unk>, just giving a volumes are gonna be coming down I'm pretty female spent a year via chip theoretically push on.

<unk> kind of give us a way to think about back or anything.

Yeah, you know, it's really too early to say what I can tell you isn't the first couple of weeks living in code that would actually the opposite because what's happening is a higher percentage of the transactions are coming from the agents that actually are higher up on the table. So it really comes down to two things, which.

Agents are actually closing their transactions and in which geography is because there's a mix piece to do it to split fat lay as well so because it's hard to say, which geography, they're going to come back sooner and and how quickly and how fast and how strong and which agents are going to be the ones doing the transactions it'd just be adding it would be.

Mature for us to go to any bit of an outlet on that.

Okay.

And you also mentioned think that million dollar listens or a million dollars plus listings are are down sharper than them. Okay. It was that it <unk> <unk> I'm, not it's kind of normalize well or is that still the date.

Yeah. Good question Tommy So that's what we saw in April so and it's only with kind of neo new listings and new contracts. You know if you think about the market dynamics I tried to give you.

I try to give you guys a lot more detail about what we're actually seeing in a given month, which we usually wouldn't do oh, because our April data still preliminary a little bit but also because we just don't do that much on the monthly, but but we're in this crazy crisis and I think it's helpful. For you to know you know you know the million dollar houses that were under contract in March.

He went ahead enclosed in April that happened.

There was no change there, but when you look at the new inventory that came onto the market in late March and April and the houses are close there were just fewer a million dollar plus ones I mean, there were zero, but there were just less.

And so you know an by the way inventories pretty logo on it in this crisis you would be amazed at how quickly houses are selling right now even in the midst of this crisis.

Because you do have serious fired into resellers and you just have you know less inventory, obviously with with Kobe, but the <unk>. It is out there definitely has less million dollar plus and so you know when we see average home prices fall in April.

It's a mix change as far as we can tell from this million dollar effect. It's not that you know every home is being sold for X. percent less is is a mix of home is sold in April just don't have as much at the high end as you know they do in most much and you know you know.

We could all get them for why there's fewer million dollar homes being put on his listings but.

But.

But we're we're we're we saw that dynamic in April and that's the that's what's what's happening.

Yeah, that's true that's that's or clarifying that yeah.

You're fine.

The line.

No final question is on the line of Jack missing.

<unk>.

<unk>.

Good morning, everybody thinks starts at me and what are the comeback in splits questioning again, maybe different way but.

<unk> increase it looks like you know <unk>. That's good split number was higher than we thought empire the trend line.

Certainly better agents, you know more deals in tough times and.

Meetings for reasons other.

How much I guess, what we saw this quarter in the uptick about trends is is competition versus versus that agent, that's what you're saying.

That's not really driven that competition <unk>, it's truly driven by the agent <unk> for single biggest driver, there's always a piece of geography, and there there's a little bit lots of U.S.A.A. So there's some small little net phat, though that are in the numbers that will play gets for the next couple of quarters is bound the the biggest single dry.

I remember was actually about agent Max.

Okay.

I'm not I'm really really great April data Frank it's about.

Right and we'll talk about website traffic, but I don't know if we put in specific numbers around that you know I think the debate in the market is obviously what.

How much of the demand is now differ versus destroyed. If you will can you give us some numbers on what are you.

Yeah.

The web traffic basically up enough offset the the decline in actual activity a super kind of waiting around keeping an eye on what's available so that when the world opens up again, they're back in it or you know can you talk maybe about you know what the increasingly being virtual touring it's been in in April one early.

It's kind of frame out the rest of that that sort of you that maybe things aren't as bad as you know as as everybody had feared a lot of these buyers were out there. They just a late not not lost.

Yeah look you know I you know unlike a lot of stuff housing I don't think is a perishable goods. So you know you know obviously you know there's a real potential that there's a lot of pent up demand you know we have all kinds of different websites. The one at the top of my list here is the one number that actually Ah Ah remember well enough, but I'm willing to share with you.

You know what you know one of our you know you know kind of you know premium brands kind of websites you know the topics up like 35% right and you know does that balance out.

The the 20% to 25% down in April or you know, 40% down and transaction open ones. I mean, you guys can can judge that you know things like virtual tours and stuff they've taken off dramatically, but that's more because in many geography, that's kind of the best way to see a houseboat from a safety standpoint and in some cases.

Some kind of a local restriction standpoint like you remember real estate is actually classified almost everywhere as in the central service kind of on par with banking, we were excited to see that at the federal level at most of the state level, but you know we're we're <unk>. We don't have our we're we're still being incredibly focused on the safety of a customers and agents and franchisees.

And so all the virtual stuff is taking off dramatically so percentage changes and that really isn't that helpful. Here you know even the website thing I don't think is that helpful. But since you asked I figured I'd just share with you, but you know anybody who's putting their house on the market or is out looking for a house right now is a very serious.

Or is probably the first thing you should know and that our agents that are franchisees are telling us I mean, nobody's messing around nobody to just doing this for bond or because they're interested in it if your boss if you're putting a house on the market or if you're out there actually wanting to buy a house you're very serious we're seeing those transactions gets done at the volumes I told you about which.

Again, we're probably better than I might have thought going into this thing and then you know we look at the website traffic and we look at some of the green shoots in geography that have handled a crisis pretty well from a public health standpoint, you know when you see the public articles to about it and we could all judge of how much that's going to come back quickly versus long term, but look we're modeling.

<unk> you know you know a a kind of v. shape, outback or housing, which is what than ours and you know Fannie Mae's Reforecast <unk> Chief economist just came out and said the same kind of thing, but we're also modeling you no longer scenarios and you know being proactive on our actions both to support transactions with agents.

Stop but also we need to do to steer the company from a cost leverage et cetera standpoint, you know to try to navigate this thing.

It just super more in the follow up on that you know there's been a lot made about listing cadence enlisting coming off the market you know compare.

Early may versus early March where are you on listings and.

No I guess, what are you hearing from the field around sort of the the rebound numbers listings being poorly temporary.

Okay as we look at the inventory sort of in the summer.

Yeah, let's see and listings are pretty pretty close to the same ZIP code of the open transaction volume I gave you in terms of you know what's been happening listings that said you know again as I reference when you look at sub geography, as you are starting to see listings growth come back stronger and some of the geography through handle decoded price is better.

There's been some public articles about you know green shoots in the Seattle's in San Francisco's or the world et cetera, and you know and then there's a bunch of optimism obviously.

For people, who do believe that it is that there's kind of demand and you know a lot of houses when they do come on the market in the time are moving incredibly quick some of that was the low inventory coming in you know obviously now even a lot less inventory and there's a lot of you know a lot of that <unk>, but you know there's there's.

<unk> them on that but you know if you're in the real estate business. You know you want to be enthusiastic about real estate, which is why we always just try to look at the data of what we actually no. One can can prove in in this case on this call decided to share a lot more specifics you know what we're seeing here.

It's been a request.

Right.

Right. Thank you everybody stay healthy.

We'll close the call now.

These these days conference call. Thank you for your participation you may now disconnect.

[music].

Mmm.

[music].

[music].

[music].