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Weekly News (April 28, 2021)

This week’s Interest Rate (16th Week)

(By Fairway Home Loan/ Time Mortgage)  

   30 yr fx(%)  15 yr fx(%) FHA(%) 10 yr Tr Y (%)
A year ago      3.375       2.990     3.490          0.549
A month ago      3.250       2.375     2.875          1.652
Last week      2.899       2.255     2.750          1.580
This week      2.875       2.250     2.625          1.618

 

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

2021 Conventional loan limit: Conforming: $548,250/ Conforming high balance: $882,375

 

 

Manhattan Office Vacancy is 16.3% → Highest record since 1994

(Korea Times   4/27)

  • According to CNN Business/Cushman & Wakefield, office vacancy rate in Manhattan is 16.3% in 1Qt, 2021 while it was 11.3% a year ago.
  • Also office rent has been dropped for consecutive two quarters which shows lowest rent in 3 years.

 

Residential prices moving Up further : Is it safe? 

(Korea Times   4/27)

  • Search activities in Google for “When the house prices will go down?” is soaring : 2,450% is increased from the last month.  Also search for “Is it good time to sell or buy?”  has been increased sharply as well.
  • According to NAR, the median price in March was $329,100 which is up 17.2% from a year ago, which is highest jump since 1999 as a March record.
  • Jonathan Miller, NY appraiser, said that prices were going up in suburban area and going down in urban area in the beginning of the Pandemic, but now both areas are going up and Manhattan joined the party and he said we do not know yet it will be good for us or not.

 

NYC Rent decreased sharply

(Korea Daily  4/26 )

  • According to Street Easy’s 1Qt report, NYC rent decreased continually and became the lowest rent in the last 10 years : Median rent in Queens was $1,999 which is the 1st time it went down below $2,000 in 8 years and 10.5% decreased from a year ago.
  • The median rent in Manhattan was $2,700, which is lowest since Street Easy started collecting data in 2010.  The median rent was $3,417 in 1Qt in 2020, right before the Pandemic. This means median rent is down by 21% from a year ago.
  • The median rent in Brooklyn was $2,390 which is down by 10% from a year ago.
  • Nancy Woo at Street Easy said that as economy recovers in Summer, rental market will respond faster than sale market.

 

Sales over $1M residential house increased sharply

   (Korea Time   4/26)

  • Low interest rates and increased savings boost up buying capability for bigger houses and increase the demand for over $1M houses as well.
  • According to NAR, sales for over $1M houses in Feb increased 81% to 17,216 while it was 9,635 a year ago.
  • In Mid-West, sales over $1M houses is doubled and North-East increased 98% and South increased 94%.
  • NAR chief economist, Lawrence Yun said that luxury houses take the upper 5% in the residential market.
  • Meantime, sales under $250,000 houses decreased: sales of houses between $100,000 $250,000 decreased 11% and sales of houses under $100,000 decreased 26%.

 

SamSung develops a Solar Energy Power Plant in Texas, U.S.   

(Korea Times  4/27  )

  • The 700 MW power plant will be developed in Milam County in TX about in 2 hour driving distance from Austin where SamSung has semi-conductor foundry.
  • Also SamSung will add a plant worth of $17B at the Austin foundry.
  • Currently the company secured the lots in Milam County and is going through entitlement process.

 

All Lumber, Stocks, Bitcoin, and House prices are going Up

(Korea Times   4/27)

  • WSJ said it is rare situation that value of different types of assets are going up at the same time.  Lumber prices are going up more than double : U.S. residential house sales went over 2006 level right before the financial crisis: S & P 500 and Dow Jones 30 broke the record 23 times, 21 times in this year respectively: Bitcoin hit over $60,000 right before it came down bit.
  • This kind of phenomena is about the same as 1920s, 100 years ago and the over-valued for technology stocks is very similar to dot.com bubble period 20 years ago.
  • Jeremy Grantham, famous investor who forecasted the dot.com bubble crisis, mentioned the current situation is different than the previous bubble: at that time all economic environments were sound. But this bubble is happening under the situation that economy is distressed.

 

Bitcoin : Tesla makes more with Bitcoin than selling cars.

(WSJ   4/28 )

  • Takeaway from the car company’s 1st Qt result out on Monday – Revenue of $10.4B and adjusted earning of 93 cents a share both topped Wall Street expectations.  Net income reached $438M a quarterly record for the company.
  • Tesla didn’t exactly earn its record profit from selling cars, however.  The company sold some of the $1.5B of bitcoin that it purchased in February, contributing $101M to the bottom line. This is a fourth of its total profit. Moreover, sales of regulatory credits to other auto makers to help them meet emission mandates, which carry 100% profit margin, reached $518M.  That accounts for nearly 100% of Tesla’s $533M in pretax income. These two helping hands helped avert red ink.
  • Tesla’s share of electric car market has eroded in established market such as Western Europe and U.S. as larger car companies like Volkswagen, Ford, and GM have gotten serious about EV market.
  • Regulators in China and in the U.S. have recently scrutinized the company over issues like the safety of its driver-assistant software, which Tesla calls Full Self-Driving Capability.
  • At today’s valuation, the risks of owning Tesla’s share extend far beyond whether Elon Musk can remain a deft cryptocurrency day trader.

 

Others/Tech News : SamSung Cell Phone market share → #1 in the world

  •  Winning over Apple, 1Qt 2021 market share #1 because of strong sales of S21 series.
  •  77M phones sold in 1Qtà32% increase from a year ago(58M)
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Amy Lee

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