Weekly News (June 9, 2021)

This week’s Interest Rate (21st Week)

(By Fairway Home Loan )

 Prime Rate:3.0% / Ref IR: 0.00- 0.25% 

• Potential home buyer – Have a pre-approval first before the shop.  Now we have 48hour underwriting turn-around times for regular loans.
• 2021 Conventional loan limit: Conforming: $548,250/ Conforming high balance: $882,375

In New Jersey, criminal records cannot be used for rejecting tenants

(Korea Daily  6/8)

• Fair Chance in Housing.A1919 will be effective soon by Governor’s sign. With this bill, landlord cannot ask tenant’s previous criminal records except 1) registered sex offender record and 2) narcotic manufacturing crime.
• Even with previous criminal records, tenants can submit  1) recommendation letters  2) diploma of a degree and/or certificates  3) community service certificates along with rent application. Still tenants judge that he/she is discriminated or mistreated, the tenant can file the complaint to the State prosecutor.
• Rationale of this law is to prevent the tenant who has previous criminal records to become homeless or commit a crime again because they could not get the lease.

Bergen County, NJ also begins rent support program: ERAP

(Korea Daily   6/8)

• Renters who got damaged economically during the pandemic can apply ERAP through online: www.BergenCountyCARES.org from 6/14 and it will continue till 7/23 or when the funds dry out. They will receive supporting fund for un-paid rent, utilities, etc occurred between 3/13/2020 and Dec 2020.
• The eligibility of rent support program is  1) Bergen county residents who owes rent  2) household income is below 80% of median income which is $78,000 for 4 family household  3) hardship experienced during the pandemic  4) al least 1 month un-paid rent.
• Landlord registration begins 6/7.

A Real Estate broker sentenced 18 month prison in NJ

(Korea Time  6/6 )

• Korean Real Estate broker Mr. S Kang who lives in Ridgefield, NJ and used to be a Broker of Hope Realty, Palisades Park, NJ is sentenced for 18 months in prison with confiscation of about $830,000. Further damage payment will be determined later.
• The charge are short sale related frauds and illegal wire-transfer between 2013 – 2017.
• There are other related agents and they are waiting for sentencing.

Manhattan Office Lease is still slow: Vacancy Rate is 17.1%

(Korea Daily    6/4)

• According to Colliers Int’l report, office vacancy rate in Manhattan is 17.1% in May while it was 16.5% in April and 10.3% a year ago.  Unleased office space in Manhattan is 92M sf while the leased space in May is only 1.53M sf.
• Average rent in May is $79.69 and some people say that it will go down to $60.
• Meantime, The partnership for New York City who has about 300 CEOs in Manhattan said that 62% of office workers will be back to offices by end of September.  Currently only 12% of office workers have come back in May which means more than a half of workers will be back to office in next 4 months.

Homeowners Stay Put in Hot Market

(WSJ   6/5)

• The housing market is so hot that some homeowners have become afraid to sell.  In more normal times, first-time home buyers move into starter homes.  As their families grow, they upgrade to bigger houses. Eventually empty-nesters and retirees sell their larger homes to downsize or relocate.
• Now, record-high prices are disrupting the usual churn.  Plenty of households could sell their homes for a big profit, but then they would have to find a new place to live.  Many are unwilling to compete in this frenzied market, where they could be subjected to the fierce and costly bidding wars.
• Even worse, if they have to sell their house and then close the new house, most offer with this selling own home contingent would be rejected by seller.
• The Boise metro area in Idaho posted the fastest home-price growth in the country in the 1st Qt, up 28.2%$ from a year earlier, according to FHFA ranking of the country’s 100 biggest metro areas.

Residential Appraisal Fee increased sharply

(Korea Times  6/9)

• Mortgage loan is based on appraisal price appraised by a licensed appraiser.  Appraisal fee is determined depending on the size of the house and location and no set price.
• Appraisal fee for SFR is about $300-$450, Multi Family House, about $600-$1500.  In New York City, the fee is about $450-$700 and it varies depending on the mortgage bank. It is reported that the fee is higher in suburban area, increased about 10%-20% due to higher demand in the area.
• Appraisal fee is usually not negotiable and often than not, it becomes unknown surprise.  And it is not refundable even when the deal is cancelled.

Federal Reserve moves forward for CBDC

(Korea Times  6/9)

• Federal Reserve wants to add digital value to U.S. dollar as one of major key currency which takes more than 60% of worldwide foreign currency reserve. CBDC(Central Bank Digital Currency) is central bank backed currency and provides transaction payment tool for individual, company, and government.  It is different from cryptocurrency such as bitcoin: bitcoin is using blockchain technology and it is decentralized, but CBDC is centralized.
• Federal Reserve has joined with MIT to research a technology to be used for CBDC for a few years and they will announce their first result in July possibly and a part of its open source code can be released.

US job openings surge to record 9.4M in April

(Record  6/9 )

• S. employers posted a record 9.3M job openings in April with the U.S. economy reopening at breakneck speed.  The number of job openings soared 12% from the 8.3M counted in March.
• But employers hired only 6.1M, up from March, according to a Labor Department report Tuesday, suggesting that positions are opening faster than companies can fill them.