KOJO NNAMDIYou're tuned in to The Kojo Nnamdi Show from WAMU 88.5 with yours truly broadcasting from home. Welcome. Later in the broadcast we'll talk with U.S. Senator Mark Warner of Virginia about that $2 trillion stimulus package passed by the U.S. Senate yesterday and what it has for this region. But first, the coronavirus continues to send shock waves through the global economy, and this time the Washington region is not as insulated.

KOJO NNAMDIWhat does this mean for consumer decisions and habits? Is now a good time to rearrange your 401K? With less cash on hand and decreasing confidence the Washington area housing market continues to be competitive as tidal companies and appraisals are considered essential fields? Meanwhile low income service industry workers and employees of small businesses stand to lose the most. And how will Congress's most recent stimulus package help the average person? Joining us by phone is Jeannette Chapman, Director of the Fuller Institute. Jeannette Chapman, thank you for joining us.

JEANNETTE CHAMPMANThank you for having me.

NNAMDIWhat are some of the broader impacts on the economy that we can expect to see in the Washington region due to coronavirus?

CHAMPMANSure. In the second quarter of this year, so March thru June, economic activity is going to stop for a large sector, a segment of our economy and it will cause a contraction that will probably extend through the end of the year.

NNAMDICan you explain why that will happen and why it will happen at that time?

CHAMPMANConsumer spending is a large share of economic activity and that has seen broad based cut backs across the board as people are not either willing or don't feel safe or can't leave to consume their normal level of activities at restaurants, at entertainment venues, even shoppers goods and other places are seeing that effect. And then the secondary piece of this is that, because so many workers are now working from home even if their jobs haven't been as affected, they are less productive at home. There are more technological glitches. It's not as efficient in general and so there's going to be productivity loss on that end as well.

NNAMDIJeannette Chapman, if people are changing their habits as you mentioned, people, who are going to restaurants, maybe haircuts, clothing, nails, all being deferred, do you see these habits changing long term?

CHAMPMANProbably not in the long term, people still like to go out to eat. People will definitely need to still get haircuts, I hope. And so what's happening is that there's going to be a pause in this activity and that it will slowly return when people are getting back to normal with their day to day lives.

NNAMDIJoining us now by phone is Nicholas Lagos. He is the President of the Northern Virginia Association of Realtors. Nicholas Lagos, thank you for joining us.

NICHOLAS LAGOSThank you, Kojo, for having me. I'm very honored to be on your show and also amongst some esteemed guests that you have.

NNAMDIWe are so honored that you can in fact join us. You're an active realtor and also a broker. What are the effects of the public health emergency on the region's housing market?

LAGOSWell, the housing market has pretty much gone into a little bit of a pause mode right now. The effects were slow to come. They are changing on a daily basis, but mostly people are in a wait and see attitude being that they are staying at home. The mobility to be able to get out, look at properties, list properties has diminished. Therefore, their spending habits will also diminished, because looking at a home, yes, you can do it online, but a lot of people like to kick the tires if you will and see the property in person.

NNAMDIYes, because real estate is a face to face business. So what changes have you had to make to keep working?

LAGOSWell, the changes have been not only drastic, but also been very very steady. First of all our member realtors in Northern Virginia, they're continuing to serve the needs of our clients. We've had to adapt. We've had to adapt by doing to online resources. We've had to adapt by utilizing more virtual tours. We've had to adapt by being more technology driven. Fortunately we have a lot a good technology at our disposals and that's really helped us quite a bit.

NNAMDILet's go to Emmanuel in Northeast Washington. Emmanuel, you're on the air. Go ahead, please.

EMMANUELHey, Kojo. How are you doing? Thank you for taking my call.

NNAMDIYou're welcome.

EMMANUELI'm also a realtor and I've had at least one transaction to be impacted by this. My client was, you know, uncertain, and wanted to hold off on settlement, which was supposed to happen yesterday. And it was understandable. You know, we wanted about two weeks from the buyer just to kind of get clarity. At this point everything is at a standstill regarding that case. However, there's other cases that seem to be moving along just fine right now.

EMMANUELKojo, I wanted to just suggest one other thing or at least throw it out there. I'm pretty sure maybe some of your members have heard it and even yourself. And that is -- this is almost obvious what I'm about to say. But it seems like this virus is really hitting hard in areas where the density is high. When you look at Italy, it's the size of Michigan, just a little bit larger than Michigan. You know, so the density is very high, older population. So that somewhat explains it there.

EMMANUELWith China, seems to be, you know, a billion people plus 300 million or more. Again, high density areas in their urban centers. And even when you look at New York, high density and small areas, and that's not the case throughout our whole country as we know there's some places that does not have high density as a thought. And so thank you for allowing me to share it. Have a good day.

NNAMDIThank you for sharing it with us. Care to comment on that, Nicholas?

LAGOSWell, he is correct. It is density driven. Fortunately in the Washington D.C. area we did take a lot of precautions. Many offices ended up making changes immediately. And our realtors, we adapted to the interest of public safety to ensure the compliance also with our governor's orders, so given that we're still transacting business. The clerk's office is still open. Settlement agents are still working. Real estate agencies are still working, because we are still considered essential personnel. So it's very very important that we keep some commerce going. Obviously it's not going to be as active, but the ongoing transactions as the caller just pointed out still continue.

NNAMDIHere is Nicole in Olney, Maryland. Nicole, you're on the air. Go ahead, please.

NICOLEHi. I started the home buying process in February, and put in an offer on a home and was accepted in early March. So I am going through the process now. But it is kind of nerve wrecking, because I'm sales and if people don't have money then they stop buying. And then that means I stop getting their money. And I needed that to buy the house. So it's a bit nerve wrecking. My closing is in April. And so hopefully I get there, but I don't know. It's a really weird time. I've been for the company with 21 years, but we've never seen anything like this and we are essential so I do still get to work, but if there's no money, we can't work.

NNAMDIWell, you say you're closing is due in April. Nicholas Lagos, it's my understanding that closings may be delayed.

LAGOSThat is correct. Closings may be delayed. And in Northern Virginia we actually adjusted for that. Just last week we created a new COVID-19 addendum and it was put into our standard forms and this basically was to protect the buyer's and seller's interests while they are trying to meet certain deadlines. The buyers still wanted to buy. The sellers still wanted to sell. But we realize that there're delays that may happen either through lending, through the title company, through the process and papers. We may have to do the closing remotely. So as a result we ended up putting in an addendum in its place, because the demand being there, we had to accommodate for that. So addendums and being adaptive to what the needs are have been very very important.

NNAMDINicole, have you considered delaying your closing at all?

NICOLENo. It seems we are all on track. The lender and the title company and I know that can all change, you know, with 28 days later going on, but I don't know.

NNAMDIOkay. Well, good luck to you and thank you very much for your call. On now to John in Washington D.C. John, you're on the air. Go ahead, please.

JOHNYes. Hi, Kojo. I have a home in Bethesda, my family home, and I've just completed remodeling the kitchen and bathrooms and was planning to list it at the beginning of April, and now I'm unsure with whether or not to proceed that or delay putting the house on the market.

NNAMDIAny advice you can offer, Nicholas Lagos, to John?

LAGOSWell, that is an excellent question first of all. I think that the caller certainly should listen to the advice of his realtor, because right now the realtor's impact and the realtor's importance is critical. A professional realtor can give him the right direction in which to go, but being that a lot of listings are also in a pause some have chosen to hold off just temporarily just so they can see and get through this market change. We don't see this situation -- the COVID-19 is not a forever situation and I think a lot of people realize that.

LAGOSHopefully it will not last long, but nobody really knows for sure. So some properties, for example, that are vacant are still being able to be marketed by using the virtual tours, by scheduling tours one on one where we don't have a lot of people going into the house, but we still take the necessary precaution whether you use masks or gloves or sanitizers or booties. So a lot of it is going to be by what his or her realtor will advise. But the value of the realtor right now cannot be understated, it is very very important to listen to that advice of that realtor.

NNAMDIHere is Allen in Washington D.C. Allen, you're on the air. Go ahead, please.

ALLENHi, Kojo. Thanks for taking my call. My question is very simple and it's regards to the property taxes that are coming due in a few days in Washington D.C. With a lot of people out of work, does D.C. have any plans to defer those taxes or not?

NNAMDIDo you have any idea, Nicholas Lagos?

LAGOSI am not licensed in D.C., but I know a lot of the Northern Virginia jurisdictions have put an extension on the timeline. And I've heard that I believe D.C. may be doing the same where they will give them a relief not to abate the taxes, but just to delay the end of payment.

NNAMDIAllen, thank you very much for your call. Nicholas, for the risky people is this a good time to buy for a particularly adventurous buyer?

LAGOSIf the buyer isn't determined -- buyer's income is not determined by an hourly basis, for example, where their job can be let go or if the buyer is an investor and their savvy and they know what they're doing, this is an excellent time to get ahold of a property. We don't feel that the buyer's demands are going to diminish in any way. Real estate is actually a very safe investment. It's one of the safest investments that you can have through the years. We have not had as much cyclical ups and downs as the stock market even. But it really depends on how much risk that they are willing to take, absolutely, there's always risk in doing anything in buying. But we feel that it's rather minimal as the economist said earlier it's not a long term thing.

NNAMDIGot to take a short break, when we come back we'll be talking with U.S. Senator Mark Warner from Virginia about the stimulus package passed by the Senate yesterday. I'm Kojo Nnamdi.

NNAMDIWelcome back. Later in the broadcast we'll continue our conversation about how the coronavirus is affecting consumers in this economy. But first, last night the U.S. Senate unanimously passed the largest relief package in the country's history. But where will the $2 trillion go? Who does it help and how quickly will people need -- will people get the help they so desperately need? Joining us by phone is Mark Warner. He is the Senior U.S. Senator from Virginia, sits on the Senate Finance and Banking Committees. Senator Warner, thank you for joining us.

MARK WARNERKojo, thank you so much for having me.

NNAMDIWhat exactly is in the bill that the Senate sent to the House last night and how will it help the people in this region and for that matter across the nation?

WARNERWell, let me first of all quickly address what happened before the break. We were working and one of the things that did not include in the bill is people think about buying or selling their home at this point was an ability to try to put a provision in there so you wouldn't have to have in person notaries. So people if they want to go to a real estate closing, unfortunately California precluded us from doing that, but I think that will be resolved in whatever the next step is at least in terms on the real estate side.

WARNERAnd then to kind of give your listeners a little bit of a update, this is actually not a $2 trillion package. It is closer to a $6 trillion package, because in terms of lending to particularly to businesses there is the ability to leverage about $400 billion of this at about almost a 10-1 ratio in terms of the Fed's policy on what's called 13-3. So this is far and away the largest package of assistance in American history. There will be mistakes made in it. This was put together in five days. There will be areas where we did too much and did too little. And I know many of us I'm already hearing, you know, as I meet with folks or listen to folks on conference calls, you know, where we made mistakes. And we're starting already on where can we some of these technical corrections. That being said let me kind of go through the four or five baskets here.

NNAMDISure.

WARNERThere will be direct assistance to every American, who makes basically less than $100,000 or less than $200,000 as a couple. These will be the checks that will be cut up to $1200 per individual and I believe $500 per child, $600 per child. I don't recall on the child number. How soon those checks will go out, the president is promising within a week or so. I don't frankly believe that's going to be able to happen, because just the administrative component, but that will be coming in for low to moderate income Americans.

WARNERThere will be over $100 billion plus package to beef up our hospitals and healthcare system. This is to try to make sure that we get the equipment that's needed. It's a disgrace that America is so far behind on the tests. And when this is all behind us we need to find out why America didn't join the rest of the world. And we could have potentially controlled this virus much better if we had much earlier testing. And I'd point to Germany as an example, but that will be for a later discussion.

WARNERBut the $100 billion plus will shore up our first responders, our docs, our nurses and also folks in long term care facilities, nursing home facilities and others, because, again, as we've seen from many hospitals the need for them to cut back on elective surgery. That's candidly where they make the money, and take on more patients. You know, you're not making a lot of money treating someone with COVID-19. This package was the largest single area in the bill.

WARNERA third area and this will be somewhat controversial was a dramatic beef up on unemployment insurance. And one thing that I don't think most Americans probably realized is that until recently unemployment insurance only covered about 30 percent of workers. So if you are a gig worker, an Uber driver, an 1099 Independent Contractor, you are not eligible for unemployment. This new provision bumps that up for the next four months, so that if you've lost work and you are an independent contractor you can receive unemployment. And then there was also kind of a $600 a week bump up on unemployment. And that's very generous.

WARNERThe challenge in certain places is, and it was raised late in the discussion, that you can end up having in certain communities folks making more money on unemployment than in the current workforce. And I think how do you not put wrong incentives in place, but also realizing this is only a four month bump up. But that will be something that will come back and be revisited. Very quickly as well there's $75 billion in this for aerospace airlines and of the $75, $17 billion for defense related industries particularly for our community in Greater Washington.

WARNERIf you are working on a DOD contract or an Intel contract and you've got a security clearance, you can't work remotely from home. So we hope we can have some of those funds to cover that workforce that we don't want to obviously lose from being employed in those national security areas. This area hasn't received a lot of attention. I was proud to kind of get it into the bill. But I'm going to work with the Secretary of Treasury to try to get it done them.

WARNERThere is a pretty generous program for companies under 500 employees to be able to get payroll and some overheard reimbursed. This is through the traditional small business administration program. The problem there is going to be again capacity to get that money out quickly. And then I put in place two additional provisions. One to make sure for businesses between 500 and 10,000 there was a low interest facility at about two percent. And then there was a tax credit that's been created to keep people on employment up to 50 percent of their payroll if an employer keeps somebody on even if they're furloughed.

WARNERWe also made sure that for both the lending facility and the small business that there was an ability for non-profits to participate. And then finally for the direct lending facilities and those in the top, we wanted to make sure we didn't leave people with a kind of bad taste in their mouth that happened after the last stimulus where you had companies that would spend money on share buybacks or excessive executive compensation, we put prohibitions on share buybacks, on dividends, on massive executive compensation increases. And we put a great deal of transparency in so that if there will be ability to see where these loans and where this support is going.

WARNERFinal final comment is just that -- and I do realize that, you know, unlike 2008 crisis where there was perhaps excess in the business community that caused the crisis. Nobody caused this. Neither party caused it. The president didn't cause it. You know, the business didn't cause it, but there needed to be this transparency and I think these protections and guardrails, because people are going through a lot of economic uncertainty at this point. And the last thing I think they would abide is if there was some bad actor, entity businesswise that would be using this support for the wrong reason.

NNAMDIWell, Senator, you know, of course that we broadcast from Washington D.C. And this bill gives every state at least $1.2 billion. But D.C. will receive less than $500 million, because it's lumped in with the territories even though residents in D.C. pay federal taxes and residents of the territories don't. Yet it has -- in this District of Columbia we have more confirmed coronavirus than 19 states. Won't that put our nation's capital and it's 700,000 residents at greater risk?

WARNERThat was not part of the bill that I was working on, but I think that was a mistake. And, you know, I don't know whether this can be corrected in so called technical corrections legislation. But I tell you, I got the first word on this at about 11 o'clock last night as we were going to the bill passage. And I think that was a mistake. I think D.C. should have been treated much more fairly. And frankly you've got my commitment and I know all the region's senators to see if we can correct that.

NNAMDIWe got an email question, "Will someone with a very low income or a fixed income like a retiree still receive the $1200 from the stimulus?"

WARNERYes. One of the things the first proposal had -- and this is why, again, the process here is the biggest piece of legislation ever that has been in done in five days. If I'm a little punchy I've been spending many many hours closeted with the Secretary of Treasury and frankly I have not been a great fan of this administration in many ways. But the Secretary of Treasury I thought was a fair negotiator.

WARNERBut the original part of the plan when this was just put together by my Republican colleagues and they were trying to exclude any real negotiation, they had set it up so that folks who didn't pay taxes, often times low income people, people on fixed incomes, would not have been able to receive this benefit. That's why you had to have a bipartisan negotiation. And the administration candidly I think came to the table fairly. We made those corrections. And, yes, now those people who don't pay taxes, were on fixed incomes will be eligible for that $1200.

NNAMDIHere's Iman in Chantilly, Virginia. Iman, you're on the air. Go ahead, please.

IMANThank you for taking my call, Kojo. Good afternoon, Senator. I just want to note two things. I think everything that you're saying sounds good. But we learned something about the previous 2008 problem. If we as an American people, we don't see that the mortgage company they need their payment every month. Why this bill didn't advice the bankers to give the people six months not to worry about your mortgage until we figure out where we go from this.

IMANAnd the second question, Senator, that I want to ask you, this money should go to each company and advise them not to lay off people and directly let them deal their employees -- the tough companies will receive this money. And we're not going to get nothing else back. As you know that if you give me $3,000 today, the rent in Virginia is $2400 two bedroom apartment. How far this thing can go, I don't know, Senator. And I hope you have a good answer for that. Thank you for taking my call.

NNAMDISenator Warner.

WARNERLet me try to answer both of those. And, actually, I do have answers for both of those questions. On the mortgage relief, for anyone who has a mortgage that is connected with the federal government in any way -- Fanny Mae, Freddy Mac, VHA, FHA, any other kind of federally supported mortgage -- there will be, and I apologize, I can't recall whether it's three months or six months of non-eviction...

NNAMDI(overlapping) We only have about a minute-and-a-half left but go ahead, please.

WARNER...non-foreclosure. So, that protection is in there. And there is, on all of this direct lending, and in the small business program and the midsize business program and for the airlines, there are requirements that you keep your workers. And then when we try to make this a little better, you know, for businesses who also got to still meet their rent payments, there's a bill, even if you have to furlough your worker, if you keep them on payroll the federal government will pick up up to half the cost of that worker up to $10,000.

WARNERAgain, there will be places where we made mistakes that will have to be corrected. We know this is an unprecedented crisis. We've seen the unemployment numbers today, spiking. We'll probably have to come back and do more. But the real challenge now, Kojo, is going to be whether it's fixing issues like D.C., or making sure that now that the bill's passed, the money gets out. And that's where I'm going to be turning my efforts now, both on corrections and on making sure the bill's appropriately implemented.

NNAMDICan you, in 10 seconds, answer this one? How will they determine what a family income is? Ours changes monthly with 1099 income.

WARNERWell, that's where, on the 1099 income, it will be -- you'll be able -- if somebody's 1099 and they're unemployed, they get unemployment benefits. They've never got those before. On a family income, it'll be based upon your family tax filing.

NNAMDIOkay. Senator Mark Warner is the senior U.S. Senator from Virginia. He sits on the Senate Finance and Banking Committees. Senator Warner, thank you for joining us.

WARNERKojo, thank you. And let me just say, in the last seconds, we will get through this. This is not going to be perfect, but we all got to hang in together. Thank you, sir.

NNAMDIAnd when we come back, we'll continue our conversation on what this means for consumers in this region. I'm Kojo Nnamdi.

NNAMDIWelcome back. Having heard from Senator Warner, we continue our conversation on the effect this coronavirus economy is having on consumer habits, especially in our region. We're talking with Jeannette Chapman, director of the Fuller Institute, and Nicholas Lagos, president of the Northern Virginia Association of Realtors. Jeannette Chapman, how much do you think this stimulus package coming from Congress -- after we've heard from Senator Warner -- will make a difference to people who are struggling?

JEANNETTE CHAPMANI think it'll make a lot of difference for households that have taken an income hit. It'll help provide a little bit of stability. And, on the recovery side, the loans and the money that are flowing to businesses will actually help the recovery happen faster, because people will be able to get back to work a little bit more quickly.

NNAMDIWhy is the situation we're in right now different than previous periods of economic downturn and instability?

CHAPMANWell, as Senator Warner alluded to, this isn't actually an economic recession. It's a health crisis. And so the underpinnings of this upcoming recession, or the recession that we're in right now, can't necessarily be resolved through normal economic means. And the only way to really get to the bottom of it and to find some closure here will be to control the coronavirus pandemic. And before that happens, business as usual won't be able to happen. And so that limits the ability of the economy to recover.

NNAMDIHow bad can we expect this to be, and who will be the hardest hit?

CHAPMANService workers will be the hardest hit, and for them, it is already very, very bad. You can see that in the initial unemployment claims that were released this morning nationally. It's an unprecedented spike, and it's happening very, very quickly. That's also unusual, because most recessions happen a little bit more gradually. And they will have lost income for the entirety of the period that they won't be able to go into work. So, restaurant workers, retail workers, personal care service workers are going to have the hardest hit at the beginning. And, right now, some of the professional workers that are able to work from home are still getting paid. And their day-to-day has certainly been disrupted, but they have been less affected.

NNAMDIElected officials across the region have approved, or are working on eight packages for small businesses and more funding for unemployment benefits. Jeannette Chapman, are these steps enough? What kind of policy actions can make a difference right now?

CHAPMANThere is so much uncertainty about what the pandemic will end up looking like, that there really isn't enough information to know what will be enough. And so it's more a matter of what can get done as fast as possible to try to create some stability rather than thinking about necessarily -- you know, this is very much a case of the perfect is the enemy good enough, because speed is more important than perfection for a lot of the public intervention that needs to happen right now.

NNAMDIJoining us now is Malcom Ethridge, a certified financial planner representing CIC Wealth Management. Malcom Ethridge, thank you for joining us.

MALCOM ETHRIDGEAbsolutely. Good afternoon, Kojo. Thanks for having me.

NNAMDIYou should note that this conversation we're having with Malcom is for informational purposes only, and should not be construed as personal financial or investment advice for you. We encourage you to speak to a licensed financial advisor about your own individual needs. But, Malcom Ethridge, as a financial planner, you must be inundated with calls from worried clients. Exactly what are you telling them? Is now a good time to get into the market or make changes to retirement funds?

ETHRIDGEWell, I'm sure you can imagine I have gotten that call, that email, that text more often than I can count each day. And, frankly, the answer depends a little bit more on what stage or what station that person is in in life. So if you're a person who's maybe a Gen-Xer or a millennial who's, you know, 20, 30 plus years out from retirement, then what's happening in the market as far as your retirement is concerned really doesn't have a whole lot to do with it. Because, you know, the market cycle has plenty of time to recover, frankly, crash again, recover again, crash again, recover again, and you'll still likely be okay.

ETHRIDGEBut for folks who are pre-retirees right now, or even already in retirement, this matters a little bit more, and it's probably a little bit more frightening. But I think the thing to keep in mind for a lot of folks in both of those spaces is that it usually is about four to six months where we see a crash happen, and then it's eventual recovery follow right after. So, if you think about 2008, the economic crisis we had then, it was the last quarter of '08, and then the first quarter of '09 where really we saw that V-shaped crash and then ultimate recovery.

ETHRIDGESo, thinking about it in the context of like maybe a year's worth of income is the best way to look at it. Not so much, oh, my God, my portfolio's been obliterated, and I'm in trouble. It's really, how much do I need to get me through the next 12 months. Have that amount set aside in cash. The rest you can still have invested and not be so concerned about, you know, what it's going to do, day-to-day. And that should be enough to help at least calm some of those fears. It's not going to get rid of them all completely, I get it, but it'll at least help to calm some of those fears.

NNAMDIWhat should people be doing with their 401Ks or 403Bs right now? Should they be paying attention to the downturn? I guess it depends on what stage of life you're in.

ETHRIDGEYeah, so, like I said, if you're a person who's already in retirement and you have funds in a 401K or an IRA, what have you, having the ability to have some sense of what's going to be -- and when I say cash, I really mean like the money market fund or the stable value fund or something like that. Those names are used interchangeably. But having enough in one of those to cover whatever the gap is between your monthly social security payments and your pension income, if you have any, that difference between that income and whatever your monthly expenses are, are really all you need to be concerned about having, you know, available today.

ETHRIDGEBut then there is sort of a different, separate group out there of folks who are retirement savers right now who are already going to be maxing out their 401K and IRA contributions, so 19,500 you can throw into your 401K this year, 6,000 you can throw into your IRA. There's a good bit of people -- especially in the D.C. region, where incomes are a little higher -- who you already slated to have that amount go into those accounts by the end of this year.

ETHRIDGEI'm actually having conversation with some clients now where I'm telling them that as long as they have enough, you know, cash sitting to the side as far as their emergency reserves are concerned, it's not necessarily a bad time to be increasing their contribution percentages, so that they're getting more of that monthly income into their 401K and IRA accounts now to take advantage of this downturn in the market that I just got done telling you. Normally, we see it last about six months, and then things kind of level off and leave us alone.

NNAMDISo, in other words...

ETHRIDGESo, you're essentially buying at a discount right now.

NNAMDIIn other words, if someone is in the financial position to contribute more money to retirement accounts right now, they should be doing that?

ETHRIDGEAbsolutely. It's worth a conversation. So, as long as, like you said, they're in a financial position, that their job isn't a concern for them, their job prospects are not a concern for them, and also having the ability to, you know, make their housing payments and everything else that happens, it's definitely worth considering increasing their contributions into those accounts right now to take advantage of the dip that we're seeing. Because, as two people, at least, have said previously, we're in a weird situation where the selloff in the market isn't really anybody's fault, financially. You can't really attribute it to any company or any sector having bad actors in it, and that's the reason that, you know, this is happening.

ETHRIDGESo, the entire market sold off wholesale, as a monolith, but there's still plenty of good companies in the S&P 500 index, for example, that, once this whole thing is said and done, are going to be right back to where they were. Apple's still going to make iPhones, and Amazon's still going to deliver packages in a day or two. So, you know, those companies have been impacted, because everybody has. But, frankly, right now, their shares are trading at a discount.

NNAMDIGoing back to one of the conditions you mentioned earlier, Malcom Ethridge, should one make sure that one has a three- to six-month emergency fund before making more contributions to retirement funds?

ETHRIDGEA hundred percent. So, this is actually -- as a financial planner, this is the time where we get the opportunity to kind of show the value of the advice that we've been giving out all this time. So, folks wondering why should I even bother to have an emergency reserve fund, why does it matter if it's three to six months of cash sitting to the side. Well, this is why, right? Because these shocks to your monthly income, we have no way to know if and when they're going to come, but they do ultimately come. And so this is the perfect depiction of the reason why you want to have those funds sitting to the side.

ETHRIDGESo, for example, Marriott is one of the largest employers in the region. I saw an announcement that Marriott, even at their corporate headquarters, is going to have pretty massive layoffs coming up. And so for folks in their corporate office, you would pretty much consider that your job is rock solid and you didn't really have anything to worry about. But having those emergency reserves, that three- to six-month cash cushion that we're talking about, allows folks even in that position where things come as a shock, to have a little bit of time to gather yourself, get your feet under you and figure out what the next move is going to be without having to liquidate any of your other assets in a down market.

NNAMDIHere's Donna in Alexandria, Virginia. Donna, you're on the air. Go ahead, please. Donna. Oh, that was my fault. Donna, you're on the air. Go ahead, please.

DONNAThat's all right. Thank you. I appreciate you taking my call. I'll try to be brief. My question is about the basis for the payments under the stimulus package. As I understand it, the plan is to use the 2018 tax return as the basis for whether or not one qualifies for the full 1,200 per person, or a lesser amount. If the 2018 tax returns have not yet been filed by a couple, due to various reasoning, what will the basis be to determine that value?

NNAMDIJeannette Chapman, you have no idea -- outside of the penalties you'll probably have to pay for not filing (laugh) -- but, Jeannette Chapman, do you have any idea? Will they use the 2017?

CHAPMANI don't actually know. So, I don't want to give out bad information. So, that would be something that needs to get, sort of, looked up through the package language itself.

NNAMDIOkay. And good luck to you, Donna. Thank you very much for your call. We move on now to David in Silver Spring, Maryland. David, you're on the air. Go ahead, please.

DAVIDYes. Hi, Kojo. So, I just pulled over to say this, because you were talking about the housing market. And my wife has a rental property that she had before we got married. And the tenant left us sort of high and dry. So, we're actually trying to sell the house. And we were supposed to go to settlement on the 10th of March, and they had secured a loan and everything, but the loan company was, like, holding onto this and that.

DAVIDAnd then as the epidemic got more and more, they kind of were, like, you know, the secondary loan market was drying up. So, they said that they cancelled their loan, not because they couldn't afford it, but because the secondary market went out, and they didn't want to have to deal with that. So, we had to start the whole process again, looking for buyers for our house.

NNAMDINicholas Lagos, care to comment on that?

LAGOSWell, it sounds like they might've been doing two loans, and there might've been financial conditions still to be met. I wouldn't be too discouraged. There's still a demand for properties. If the property is vacant, even, it can be a little easier to show it. And just the buyer's slightly in a holding pattern, so I would be very aggressive in terms of marketing, get some creative means in which to get some virtual tours, some wonderful pictures on there. Consult with your realtor and, you know, I would not give up on that. The buyer's still there. Thank you.

NNAMDIThank you very much for your call. Were you planning on buying a house before this public health crisis? Have your plans changed? You still have time, give us a call, 800-433-8850. Malcom Ethridge, the stimulus bill relaxes some of the penalties for drawing on a retirement account early for emergencies. Is that generally not a good idea? That is, drawing on a retirement account early?

ETHRIDGESo, it is a good thing that they're getting creative, as far as figuring out ways to allow people access to cash, to kind of buffer against this disruption, if you will. But one of the biggest concerns for me as a financial planner is, A., the fact that leaving out the detail that you still have to pay ordinary income taxes on any distributions you make from it. So, the only thing that's been wiped away is the 10 percent excise tax penalty that normally hits you if you're younger than 59-and-a-half and you make a withdrawal from a 401K.

ETHRIDGESo, you're still going to end up paying taxes. It's a little bit misleading. You just pay less taxes. But to answer your question a little more directly, yes, it's always a concern anytime someone's talking about pulling funds out of a retirement account, especially, again, someone who's in their 30s, 40s, maybe even 50s, who you have plenty of time to allow that money to continue compounding on top of itself. And, frankly, that's the whole reason that a 401K is as valuable as it is.

ETHRIDGEAnd so I would say even with the lax rules and lax penalties for pulling out early funds from retirement assets, I would say consider it, you know, your path of last resort, if you will. It definitely ends up doing more harm than good, in a lot of cases, down the road.

NNAMDIThank you very much for your call. Here's James in Landover, Maryland. James, you're on the air. Go ahead, please.

JAMESYeah, just want to follow onto one of the previous callers, kind of a similar question. If you're currently delinquent on your taxes, will you still get that $1,200 or $2,400 payment?

NNAMDII have no idea. Do you, Jeannette Chapman?

CHAPMANUnfortunately, no. Sorry. (laugh)

NNAMDIYeah, I'm not sure, either. Nicholas Lagos, the Washington real estate market was not affected as badly as other regions of the country during the 2008 crash. Will it be as insulated this time around?

LAGOSIt remains to be seen about how long this COVID-19 scare or virus will last. However, this is different than 2007 and 8, because the underlying factors were very solid. We had strong buyer demand, and we had low inventory. The interest rates were low, and basically, people are just in their homes right now just waiting to be released. I don't think it'll have as much of an impact as 2007-8. I don't think we'll be totally insulated, completely, but I think we're going to be rebounding just fine, but it's going to take a little time to ease into it.

NNAMDIHere now is Jeremy in Salisbury, Maryland. Jeremy, you're on the air. Go ahead, please.

JEREMYHi. My question was, my wife and I are both restaurant workers, and we were both recently laid off. And we just talked to a broker, and he said that, unfortunately, now that we're on unemployment and have no income, we are unable to buy a house within the four months we were looking at. So, we wanted to know, with the stimulus bill and everything, what our next steps would be.

NNAMDIAny idea, Nicholas Lagos?

LAGOSYes. You do have to have steady income for at least three to four months, so the lenders can consider your package. So, just be patient. When you get back to work, collect a few more -- a few paychecks, get your history back in order, and then you can get back into the game.

NNAMDIThank you very much for your call, Jeremy. Jeannette Chapman, the federal government is one of the largest employers in this region. How will that affect the economic impact of this crisis for this area?

CHAPMANIt will help us return, on the recovery side, a little bit faster than other areas, because the federal government functions and the underlying revenue streams will be unaffected, and the same for contractors, in general. However, on the recession side, the contraction here will still be similar to other areas, even with the federal government, because we have a large number of service workers, as we just heard, that will be affected. And the federal government can't help insulate that activity like they did last time.

NNAMDIHere now is Janice, in Alexandria, Virginia. Janice, your turn.

JANICEYes, I am retired. I have an IRA split between a traditional and a Roth. Would this be a good time to move some of that money from the traditional to the Roth, knowing that I will have to pay a penalty on moving the money out? I should've done this 10 years ago, I know.

NNAMDIMalcom Ethridge?

ETHRIDGEI would say only if the funds sitting in the traditional were already in cash before this crash happened, because, you know, the market is down 25-plus percent right now. And you alluded to the additional tax penalty, so you'd be looking at, call it 50 percent immediately wiped out to get that money into the Roth, which kind of defeats the purpose ultimately.

NNAMDIWell, Janice, thank you for your call but we'd like to remind you that our discussion with Malcom is for informational purposes only. We'll still advise you to speak with a licensed financial advisor about your own individual needs, because, obviously, Malcom is not your advisor, at this point. So, good luck doing that. We're almost out of time but here quickly is Chelsea in Frederick, Maryland. Chelsea, you're on the air. Go ahead, please.

CHELSEAThank you, Kojo. I love the show. I would like to ask a question about real estate. I am a realtor here in Frederick, and the market is -- was booming before corona. I wanted to know, what can I tell my sellers, going forward, as far as showing homes? A lot of people are trying to unload some debt right now, so I wanted to see what kind of advisement we can give them for this market, going forward.

NNAMDINicholas Lagos, you have less than a minute.

LAGOSWe're in pause mode. Get your home ready to show. Make it show really, really well. Take all the necessary contamination risks to allow people to go in and see your property. And try to present it as much as possible. Use means as we talked about: virtual tours, pictures. And talk to one realtor from another directly and encourage them to see the property.

NNAMDIAnd good luck to you. Kathryn in northwest D.C. couldn't stay on the line, but says: I live in an apartment building and there was a rental unit the owner had been planning to sell. They held an open house this past week. The building should inform residents before they do something like that. I suspect most renters in the city and most people in the city would probably agree with that.

NNAMDII'm afraid that's about all the time we have. Jeannette Chapman, Nicholas Lagos, Malcom Ethridge, and earlier on, we spoke with Senator Mark Warner. And we thank you all for joining us. Today's show on the economic impact of the coronavirus was produced by Victoria Chamberlin and Kurt Gardinier.

NNAMDIComing up tomorrow on The Politics Hour, D.C. Council Chairman Phil Mendelson responds to the latest coronavirus stimulus package and talks about the pandemic's impact on the D.C. budget. Plus, Maryland Senate President Bill Ferguson discusses the state's response to COVID-19 and the end of the abbreviated legislative session. That all starts tomorrow, at noon, on The Politics Hour. Until then, thank you for listening. I'm Kojo Nnamdi.