Weekly News (June 24, 2020)
This week’s Interest Rate (26th Week)
(Fairway Asset )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||3.875||3.39|
|A month ago||3.25||2.77|
(The rate based on 25% down payment with 740 above credit score)
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
Conventional interest rate is lowest in history. FHA and VA loan rates are getting better. Many lenders still have COVID-19 overlays. Cash Out refinance available now for primary house.
COVID-19 hit Rent market in Manhattan hard
(The Korea Daily 6/20)
- According to StreetEasy, triple down situation affected to Manhattan rent market: 1) number of lease contract, 2) vacancy factor, 3) rent price. The number of lease contract was decreased 62% compared to a year ago.
- New foreign students from overseas start leasing apartments about this time, but not this year.
- The vacancy rate is 2.88% in May which is the lowest in 14 years. Average rent is $4,108 in May which was lowered 3% from April.
Slow return in NYC becomes worries to building owners
(The TRD 6/23)
- The 2nd phase of NYC re-opening started Monday (6/22), with office workers, brokers allowed to resume in-person showings, and a limited reopening of retail and outdoor dining. But the city is still a far cry from its pre-lockdown self.
- Rudin Management Co reported occupancy across its 14 building commercial portfolio was just 5.2% of the normal level: A lot to do with tenants not feeling comfortable with public transportation. Real Estate brokerages are also seeing limited enthusiasm for a quick return to the office.
- The slow return of office workers will have serious implications for the broader economy and small business that depends on their patronage.
- Although 3,192 restaurants have received approval to set up tables for outdoor dining, this represents barely 10% of the restaurants that were open before the pandemic.
Eviction Process for no rent payment might take a year in NYC
(The Korea Daily 6/24)
- NYC Housing Court has announced they will delay the application process for 2 week, and they cannot execute eviction process by 8/3/2020 according the executive order.
- New York City Small Housing Association said whole eviction process might take a year, if the cases are due to the pandemic, because NYC and the court do not want to mass eviction crisis
Supply Chain has collapsed and ware house demand soars
(The Korea Daily 6/20)
- Due to the pandemic, the demand for warehouse is increased sharply, according to GlobeSt.com. Therefore, transportation and storage issues will affect commercial real estate market. Especially Chicago and South Florida where there are many storages and distribution centers will have positive effect.
- Less spending in restaurants, more spending on buying fresh grocery: this change on spending habits will induce to smart warehouse for inventory control by AI and Big Data including temperature and environmental control.
- Hospitality and restaurant sector might have very slow recovery.
US Existing home sales dropped 9.7% in May
(The Korea Daliy 6/23)
- NAR announced that May home sales dropped to 3.91M as of 6/22 which is 9.7 drop from last month while Bloomberg forecast was 4.09M. Compared to last year it is 26.6% decrease. It is lowest level since Oct. 2010.
- In April, 17.8% has been dropped compared to the last month.
- Typically in US, existing home sale is 90% and new home construction sale is 10%.
US New Home sales rose 16.6% in May
(The Record 6/24)
- Sales of new homes rose a surprisingly strong 16.6% in May with reopening of major parts of the country potently fueling activity in the housing market.
- The Commerce Department reported Tuesday that sales of single family homes rose to a seasonably adjusted annual rate of 676,000 in May, a far better than expected.
- Nancy Vanden Houten, economist with Oxford Economics said she expects a decline overall this year even though modest recovery after big decline in the first Qt.
Lawrence Yun spoke at GBAR Midyear 2020 on the changes due to pandemic
(GBAR Midyear Meeting 6/17)
- 1. Virtual office meeting 2. More remote working 3. Less traffic near City Centers 4. Move further out 5. Large house.
- Q: lack if available land/lots →(Multiplex houses)
- Commercial properties → 10% down.
- Inflation in 2-3 years / Low mortgage interest rates till 2021 → House mortgage payment remain the same for 30 years.
Others/Tech News : Starbucks will add plant-based meat to menu
(The Record 6/24) – Breakfast sandwich with egg, cheese, and the imitation sausage on ciabatta bread