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Weekly News (August 5, 2020)

This week’s Interest Rate (32 th  Week)

(By Fairway Asset )

   30 yr fx(%)  15 yr fx(%) FHA(%) 10 yr Tr Y (%)
A year ago      3.875       3.375    
A month ago      2.875       2.375     2.625          0.674
Last week      2.875       2.375     2.625          0.595
This week      2.750       2.375     2.625          0.517

(The rate based on 25% down payment with 740 above credit score)

Prime Rate:3.0% / Ref IR: 0.00- 0.25%
Covid-19 Overlays
Potential home buyer — Do not apply deferred payment or forbearance program.  If applied , they need to complete the program as soon as possible.
Self employed borrower – Need to prepare 2 month business bank statements and the YTD income of 2020 can’t declined more than 20% compared to last year.
Credit: No late payment allowed for mortgage — last 12 month period

COVID-19 CHG:Korean owned banks in NY, NJ are facing severe profit loss

( The Korea Daily 8/1)

  • Among 11 Korean owned banks, 7 banks have had big loss for the first half of the year, according to FDIC.
  • Bank of Hope reported 39.3% profit loss, Woori America Bank reported 74.2% loss, and New Millennium Bank reported 46.4% loss. Assets, deposits, and loans are increased mostly, but preparation of reserve fund for default accounts after pandemic was the primary reason for the loss.
  • However, New bank, Noah bank and KEB Hana bank reported profit gain of 48.7%, 88.5%, 15.9% respectively.
  • Most banks still are worried for the second half of the year in New York metropolitan area because economy recovery show very slow pace due to unemployment rate and re occurrence of COVID-19 spreading.

 

Manhattan 32nd Street Koreatown is designated as Open Street

(The Korea Times  8/4)

  • Weekend car traffic will be prohibited: 2 pm-11 pm on Fri, 12 pm – 11 pm on Sat and Sun.
  • NYC has added 15 Open Street area after COVID-19.
  • Total 62 Open Street area includes 5th Ave between 45th St – 47th St in Brooklyn, Spring St between Thompson St and West Broadway in Manhattan, E 18th St between Park Ave and Irving Pl in Manhattan.
  • Outdoor dining policy will continue till next year even though COVID-19 is disappeared.
  • Currently about 9000 restaurants are operating under outdoor dining program and 80,000 workers could come back to work.

 

End of eviction ban to unleash 14,000 warrants in NY

(TRD/Jason Shim 8/4)

  • With one of New York’s eviction moratoriums set to expire tomorrow, some 14,000 active eviction warrants are poised to move forward, legal services providers warn.
  • The cases were brought prior to the state’s suspending evictions early in the pandemic. Gov.
  • Andrew Cuomo has since extended but narrowed the moratorium.  The latest 30-day extension of the eviction and foreclosure ban will lapse Wednesday night, August 5.
  • A law enacted at the end of July allows tenants to forestall evictions if they have suffered Covid-related financial distress, but these 14,000 cases predate the pandemic, according to the Legal Aid Society.
  • The legal services provider estimates an additional 200,000 rentals in New York City are not eligible for the law’s protection.

 

COVID-19 CHG: Discounted Sale for Hotel become available in the commercial market

 (The  Korea Times  8/4)

  • Hotel occupancy rate hit the bottom.  The distressed hotels are on sale at about 30% discounted price or using high interest rates loan temporarily.
  • Between 7/12 – 7/18, hotel revenue of available hotel rooms was dropped 56% from a year ago, according to STR.
  • CBRE reported average revenue for hotel rooms was dropped 52% from a year ago and the occupancy rate has been dropped to 41% from 66% a year ago. However hotels have fixed expenses such as tax, insurance, security, basic utilities, etc.

 

COVID-19 CHG: Drive-in Movie Theater is changing real estate demand

(Miju News  8/1)

  • Drive-in Movie theater business was going down. According to United Drive-in Theatres Association, 305 Theaters survived, but mostly pop-up operation and they cannot trace the locations.
  • Due to COVID-91 closures, regular movie theaters are closing down, but drive-in theater business is coming back again.  Shopping malls, Sports complex with big parking spaces can be used as drive-in theaters.
  • The Star (Football team Dallas Cowboys HQ) signed up the lease to Kilburn Media, event company for drive-in movie theater.  Other shopping malls are opening theaters such as Park meadow in Denver, East Town in Dallas, Willowbrook in Houston, Woodbridge Center in NJ, etc.
  • In the beginning they were thinking temporary business for about 3 months, but now situation is changing and started thinking longer term. This drive-in theater business is now being combined with new updated entertainment technology and stimulating other retail demands in the surrounding area.

 

“Zoom Room” boom on the real estate listings

(SF Gate / Jamie Lee  8/3)

  • In a real estate trend that could happen only in 2020, agents and sellers are adding “Zoom room” in listings, alongside more traditional home features.
  • Listings express “A decorative wall in the home office provides a nice backdrop for Zoom calls” or “impressive Zoom Room!”

 

2nd Qt GDP growth is – 32.9%, announced US Commerce Department

(The  Korea Daily  7/31)

  • 1st Qt growth was – 5% which was the first negative growth after positive growth for 6 years. 2nd Qt deepened the negative growth and it is the worst record since 1947 when the department started collecting GDP data.
  • Retail sales in March dropped 8.3% and 16.4% in April due to the fear of COVID-19.
  • New York Federal Reserve Bank forecasted 13.3% GDP growth in 3rd,
  • The Chair of Federal Reserve Bank, Jerome Powell mentioned economy recovery speed slowed down.

 

New Jersey COVID-19 Transmission Rate reached to 1.49 on 8/2/2020

(The Korea Daily   8/3)

  • Transmission rate was 1.35 on last week Thursday (7/29).  1.49 Transmission Rate is the highest since April’s peak.
  • Especially, TR for younger generation aged between 18-29 is increasing: 12% in April, 22% in June, 33% in July. Overall in NJ, the positives are 331, and death toll is 6 on 8/2 while NY positives are 531 and death toll is 3.

 

COVID-19 CHG: Home Owner rate is increased to 68% through COVID-19 in 2nd Qt 2020

(The Korea Times  8/3)

  • According to US Commerce Department, 67.9% rate home owner rate is the highest in 12 years. Home owner rate is being increased for four consecutive quarters. Especially 1st Qt owing rate was 65.3% which is big jump in a quarter.
  • Home owners under 35 year old is increased to 40.6% which is highest increase. The Millennium generation speed up their decision to buy due to COVID-19 and low mortgage interest rates.
  • Renter rate has been decreased 7.2% and the main cause is that people who lost jobs rented with friends or returned to home town and live together with family.
  • Home owner rate was the peak in 2004 at 69% and went down to 62.9% till 2016, now it is being increased.

 

COVID-19 CHG: US Dollar value dropped 9%

  (The  Korea Times  8/5)

  • According to US Dollar Index DXY, the current US dollar index is 93.45 while it was 102.82 in March before the Pandemic era. The reason of decrease is US politician’s loss of control for the Pandemic.
  • “Dollar Smile” theory might be gone since it showed it’s lowest value for the last 2 years.

 

COVID-19 CHG: Robot takes cleaning job to shine, or even disinfect

  ( NYT  8/5)

  • A Pandemic heightens in cost-effective ways to complete chores like cleaning buildings.
  • Softbank, the Japanese multinational conglomerate, introduced the Whiz autonomous carpet cleaners in November and deployed more than 10,000 compact Whiz globally.  The Whiz leases at $500 a month including maintenance and data collection that provides “the confirmed clean”.
  • Somatech, a start up in NY, is working on a robot that can clean bathrooms using spray technology. They can program to ask cleaning chemical to spray, including disinfectants.  “Neo”s sells for $50,000, plus $500 a month for software that tracks cleaning performance.

 

Others/Tech News : “Lord and Taylor” filed bankruptcy Chapter 11

   (The Korea Daily 8/4)
Samuel Lord and George Washington Taylor found the company in 1826, 194 years ago.
The annual revenue was $253M last year.  The total debt was $137.9M.

 


 

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Stephen Lee

He has been in Real Estate industry in about 20 years and has been Broker of Record for 9 years. His experience includes residential, commercial, and property management. Prior to involving with Real Estate business, he has been involved in the digital communication equipment industry utilizing his engineering background and education, including running own company. He has established C Land Realty in 2011 which has grown to staffing over 100 Real Estate agents and the annual transaction amount of over $110,000,000 today.

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