Weekly News (July 10, 2019)
This week’s Interest Rate
30 Y Rate: 3.750%/ 15 Year Rate:3.250%/ 10 Y Treasury: 2.061%/ Prime Rate:5.5%
Town hall meeting with mayor in Palisades Park held on 7/9 for Korean commerce
(The Korea Times 7/10)
- At 10:00am, about 20 Korean had participated and debated openly and fervently. The town is well known as K-Town, but some say recently it is facing downwards due to parking issues, heavy competition, and high rent, etc. Especially parking issue was hot topic because there are many complaints about getting tickets due to meter malfunctioning that customers are afraid of coming to the town. (They may go to neighboring town like Fort Lee)
- Mayor responded the town is considering overall renovation of parking system and also discussing to purchase a vacant lot and convert it to parking space.
- Some say it is the first time Korean business owners have a meeting with Mayor and it is necessary to open up the appropriate channel with the town officials.
- Mayor responded they will re-open the town web site around the end of July.
Englewood Cliffs will have a presentation on the planned apartment complex
(The Korea Daily 7/6)
- A presentation, organized by city council, will be held at 143 Charlotte Pl, Englewood Cliffs (Gym at the Upper School) on 10th. The plan is to build 600 unit apartment complex including about 100 affordable housing units at former Unilever site (800 Sylvan Ave). Democrat party in the city council, who is a majority, expressed their opinion that 10-20% will be allocated to lower income households and the town can collect tax which will help the town.
- Many Korean residents in the town are opposing the proposed development and their organized activities is getting momentum.
- For those who could not attend the presentation, the recorded video will be uploaded to the city website, englwoodcliffsnj.org.
American Dream Meadowland will open in October 25th this year
(The Korean Daily 7/6)
- Triple Five announced that ADM will be open on 10/25 if there is no special event. ADM will represent NY Metropolitan area for major shopping mall and entertainment which will provide about $1.2B economic effect a year. Currently about 2000 workers are working daily. ADM is the biggest shopping and entertainment complex with total 3M sf.
- Retail stores will close on Sunday according to the Blue Law, but entertainment facilities and restaurants will open 7 days including Sunday.
New Jersey is being changed to “Storage State” from Garden State?
(The Korea Daily 7/10)
- Traditionally New Jersey has been called “Garden State”. Recently it is changing that many storage warehouses are increased and more workers are hired for logistics sector. According to State Labor Department, workers in warehouse sector have increased by 25,000 for last 4 years. New Jersey had forecasted 49,300 workers in this area for next 10 years, but it can be much larger if you look at the statistics of last 4 years.
- The biggest reason is geological one. (New Jersey population is 8.9M and NY/NJ metropolitan area has 50M population). 300 companies among Fortune 500 are located in NJ.
- Another big factor is Amazon who built 12 warehouses and hired 17,000 workers till 2012. During this process, Amazon invested $6B and created over 10,000 construction jobs.
- New Jersey is also very popular state for Korean direct on-line purchasing business and logistics: Many corporations have operated their local offices with ware house operation. It is known that around 1000 Korean business and corporation are located in NJ.
Green Roof Tax Abatement benefit increased to $15/sf from $5.25/sf
(The Korea Times 7/9)
- On 7/3, Governor Cuomo signed off the bill which increases the abatement benefit. Scott Stringer, NYC comptroller mentioned it is necessary to have more green space in NYC and Green Roof idea gives more green space and less rainfall to the street.
- Currently only 1 building out 1000 buildings has green roof in NYC 5 boroughs.
- Also Stringer added that green roof provides better appearance of the building and helps purifying air quality. And also it creates insulation function which it increases energy efficiency as well.
RI rates might be lowered by “baby” step, rather than “giant” step
(The Korea Daily 7/9)
- Hope for lowering RI rates becomes thin due to recent increase of job positions. Last month, many were expecting a giant step (0.5%) rates down at the next FOMC during 7/30-7/31 because the chair Jerome Powel indicated so. Commerce department reported on 7/5 that 224,000 job increase of non-agriculture section.
- Still many are expecting a baby step (0.25%) down because US economy is not doing well enough because of impact from trade war even though US and China agree to re-negotiation. Lowering rates might be a policy as buying insurance policy for preparing worse economy.
With multiple reasons, still housing inventory is still low
- REALTOR magazine reported 5 major reasons for housing shortage in the market:
- New home construction fails to keep pace: Housing starts have been constrained postrecession due to shortage of lands, labor, and materials. (1.3M new homes in 2019 while 50 year annual average is 1.6M)
- The aging housing stock: As home ages, they will either need to be remolded to remain in the pipeline or torn down and replaced. If not, inventories will lesson over time. (37: Median age of US homes. Over 50% of homes were built before 1980)
- Demographic shift: Millennials have overtaken baby boomers as the largest U.S. adult population, and they are starting to buy homes. (73M Millennials in 2019 and 72M baby boomers in 2019)
- Homeowner tenure grows: Home owners are staying put longer. (Average tenure is 8.3 year – record high)
- Home turned into rentals: During housing crises, investors snatched up single-family homes in foreclosure and converted them to rentals. (31% growth in a single-family rentals from 2007 to 2016.