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Weekly News (July 22, 2020)

This week’s Interest Rate (30th  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      2.899       2.370     2.625          0.750
Last week      2.875       2.375     2.625          0.614
This week      2.875       2.375     2.625          0.605

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

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

FHA and VA loan rates are getting better.  Many lenders still have COVID-19 overlays. Cash Out refinance available now for primary house.  High Balance Investment is still not favorable.  Portfolio loans such as bank statement programs and foreign national loans still have problems closing.

 

NCY corporates will reduce manpower and office space

(The Korea Daily  7/22)

  • Partnership for New York City, whose members are CEOs of major companies in NYC including financial sector, announced that 25% of companies will reduce 20% of current manpower in NYC and let them move out of NYC or do working from home.

 

NYC unveils landlord-tenant mediation program to avoid evictions

(TRD/ Jason Shim  7/21)

  • Nonprofit Community Dispute Resolution Centers will assist tenant and small landlords to find solutions to “rental issues” brought on by COVID-19, announced the city on 7/21.
  • A pause on most eviction filings expired earlier this month, and now landlord attorneys can file evictions with fewer restrictions. While landlords can file most evictions, a judge has said that his previous memo, which paused proceeding until further notice, still stands.

 

In June, Residential New Construction Start increased 17.3%     

(The Korea Times  7/21)

  • According to US Commerce Dept report, new construction start is increased to 1.186M in June, which is 17.4% increase from May. After the shock of COVID-19, this is two month consecutive growth.
  • This might indicate new demand is growing that buyers are moving to rural area and build new houses with different needs.

 

The pent-up demand for homes should be a blessing for market

(REALTOR   July/August)

  • Lawrence Yun reported that pending sales contracts hit their all time lowest level during the most restrictive phase of the stay-at-home orders, but home prices have been rising at more than a 5% annualized.
  • In the 1st Qt, while GDP contracted by 4.8%,the residential investment component comprising economic activities from home sales, home construction and remodeling activity grew by 21%.
  • Another noteworthy point is the strong growth in the savings rate, which will be unleash back to the economy.
  • Consumer prices could accelerated as a result of massive “printing” of money in 5 year or so: Higher prices for food, tuition, health care, rents, real estate.
  • Home sales nationally are forecasted to be down only 11% in 2020, while process should rise by 4%.
  • In 2021, everything lights up as sales are expected to jump 15% while price growth stays in the 4% to 6% range. The demand will be there: the real question is whether the house will be there → need more listings and new construction.

 

Warehouse/Storage demand increased sharply due to buying pattern change

  (The Korea Times 7/22)

  • The buying pattern is changing from off line to online sharply, even more than before the pandemic.  Accordingly industrial property demand is soaring.
  • According to JLL’s forecast, the market will need 1B sf of industrial spaces by 2025.
  • e-Marketer reported that e commerce takes 14.5% among total retail market and the transaction amount reaches to $709B. Also JLL reported that lease for e-commerce took 35% of industrial spaces, but now it takes more than 50%.
  • Those investors for hotels and office buildings are now focusing their interests to industrial properties.

(NYT  7/22)

  • Self-storage industry, in contrast, is experiencing slowdown due to the lockdown businesses nationwide.  Some stores are trying to provide more innovative way to survive such as pick up delivery features.

 

Dry Cleaners, Taylor stores are in deeper trouble

(The Korea Daily   7/21)

  • Dry cleaners are experiencing about 80% revenue drop due the lock down and stay home policy.  Many events that require new dresses and formal suits are cancelled : Wedding ceremony, business trip, graduation parties, funeral events, religious ceremony, prom parties, etc.
  • Some dry cleaners are open as appointment basis.  Many stores say it is worse than subprime crisis era.
  • According to IBISWorld, US dry cleaning sales is about $9.2B with about 32,380 stores.
  • There was no lock down for dry cleaners for the pandemic period in 32 states because they need to take care of unfirms for essential workers.

 

Private Tutoring market increased due to school shut down in US 

(The Korea Daily   7/22)

  • WP reported on 7/17 that parents are interested in hiring private tutors because they are worried about being behind of academic skills and exposed to the virus spreading.
  • In NJ, it becomes parents’ choice to send them to school or take online classes form September.
  • In some area in NYC, online tutoring with 3-4 students or one-to-one private tutoring become popular.  NBC reported that the cost for private tutoring varies between $25/hr and $80/hr depending on area and teachers.
  • This phenomena might induce more education gap between the rich and the poor.

 

Personal Care business becomes more private due to COVID-19

(NYT  7/22)

  • The coronavirus is turning everyday pleasures into extravagances available only to rich people. MySpa2Go in NY provides at-home nail services, waxing, facials. Make up, eyelash extensions, haircut and massages for a premium prices.( A deluxe manicure and pedicure runs $125.
  • Moviehouse and Eatery in TX rent an entire auditorium for $350.
  • Personal training company, Gymguyz in Plainview, NY offers one-and-one workout session for in customers’ home or back year for $75-$100.
  • Private backyard pool can be booked for $45-$60 an hour through Swimply, in NY.

 

Others/Tech News :

 LinkedIn laid off nearly 1000 employees which is about 6%
 (US unemployment rate is above 11.1% / 4.8M jobs added in June) )

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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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