Weekly News (August 21, 2019)
This week’s Interest Rate
30 Y Rate: 3.625%/ 15 Year Rate:3.250%/ 10 Y Treasury: 1.552%/ Prime Rate:5.25%
Ref IR: 2.00- 2.25%
Palisades Park residents are questioning on major school renovation project
(The Korean Daily 8/20)
- Palisades Park residents are anticipating announcement of additional $60M budget for school renovation and it’s itemized detail and tax increase, but it is not announced yet which was supposed to announce in August for the general election in November. But as of the middle of August, Education committee website does not have even meeting schedule.
- Kwon, HyukMan, Chairperson of Korean Voters Association, mentioned that the residents need to know the planned budget details of school renovation and how much residents will have to pay through property tax increase.
Average education budget per student is low in Palisades Park and Fort Lee, NJ
(The Korea Daily 8/21)
- According the State Department of Education, Average education budget per student in NJ is $21,866 which is increased by 4.9% from last year. In Palisades Park, where 1000 students are Korean among total 1800, the average education budget per student is $18,047. Fort Lee’s education budget is $20,178.
- Leonia, Englewood, Englewood Cliffs student budgets are $23,114, $26,158, and $30,224 respectively. Highest education budget is $38,884 per student in Alpine where there are 150 students.
- In Palisades Park, school is very dense due to 2 family duplex development, but the property tax is bounded to 2% increase, which is causing low education budget per student.
Landlords who illegally modified apartments were charged with more than $100K
(The Korera Times 8/20)
- According to NYC Building Department, Xue Ping Ni and Jin Ya Lin at 165 Henry Street got fine for illegal modification on 8/16. Xue Ping Ni altered 634 sf apartments (5th floor and 6th floor) to 9 rooms with 4.5-6 ft ceiling: no window and no fire extinguisher/alarm.
- The city fined $144,750 and $1000 per day penalty if they don’t restore in 45 days.
- Jin Ya Lin also got fine of $139,750 for modifying 7th floor apartment to 9 rooms and collecting $600 per room.
A restaurant in Manhattan Hell’s Kitchen signed up a lease at $120/sf for 15 years
(The NYT 8/21)
- Coda Bar Kitchen & Stage opening in early 2020, signed 15 year lease for a 2500 sf space in Hell’s Kitchen area, with 5 year option($300,000 approximate annual rent). This 4 story building was built in 1900 and have 6 residential unit which are all occupied.
- Tenant broker was Christine Traina at Douglas Elliman Real Estate.
Mortgage loan amount is historically high to $9.4T in US
(The Korea Times 8/20)
- According to Fed Reserve, 2nd Qt 2019 loan balance in US is increased by $162B from 1st Qt to $9.406T which is higher than 3rd St 2008 ($9.294T), right before financial crises. In US, mortgage loan is biggest debt in average household. Mortgage loan hit the peak in 2008, and it was decreased by 15% till 2nd Qt in 2013. After that period it as increased continually.
- Along with mortgage debt, total household debt is increased continually since middle of 2013. 2nd Qt 2019 household debt is increased by 1.4% from last Qt to $13.86T which means continual increase for 20 Qts.
- Low interest rates is one of contributing factors.
House Remodeling will be weakened next year, forecasted “Market Watch”
(The Korean Daily 8/17)
- Market Watch by joint efforts with Harvard Joint Center for housing studies (JCHS) forecasted downturn for house remodeling market next year : 6.3% growth in 3rd Qt 2019 to less than 1% in 1Qt 2020. Remodeling industry already sensed downturn beginning in smaller contractors.
- JCHS mentioned the reason of downturn is 1. Decrease number of sales 2. Low construction activities due to permit delay. 3. Slowdown of house price increase.
FHA Loan Cash Out limit will be reduced due to worry of foreclosure
(The Korea Daily 8/17)
- FHA will lower 85% of cash-out limit in re-financing to 80% of appraisal value beginning in September 2019. FHA announced, according to WSJ, re-financing cash-out reached to $1.3T which might be an unhealthy level. Number of Cash-out re-financing between October 2017 and September 2018 was 151,000 which was about 4 times, compared to same period previous year.
- Too high cash-out might lead to under-water house and, therefore to more possible to foreclosure.
GTX line between Seoul and SongDo in Korea has been determined finally
- The GTX(Busan Express Line) –B line project from InCheon SongDo to Namyangju Maseok was confirmed. It will take 27 minutes from SongDo to Seoul. Originally there 9 stops from SongDo to Cheongyangni and later 4 stops to Namyangju Maseok.
- The construction will begin at the end of 2020 and open in 2027and total construction budget is about $5B.
- Real Estate market near along the GTX is boosted already with this announcement and some listings were withdrawn.