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Weekly News (June 26, 2019)

This week’s Interest Rate

     30 Y Rate: 3.750%/  15 Year Rate:3.250%/ 10 Y Treasury: 1.988%/  Prime Rate:5.5%

 

ADM(American Dream Meadowland) will bring Coke as a partner

(The Record  6/26)

  • American Dream and Coke announced partnership: ten year deal includes an 800-person dinning center, social media storefront, green rooms, and more events to the Meadowlands.  The 3 million sf center will include more than 450 retail, food and specialty shops, and expected to balance of 45% retail and 55% entertainment.
  • Coca Cola Eats will join a growing roster of dinning destinations at the ADM.  The center will also have the Dinning Terrace; The Munchie’s Food Hall, Freds at Barneys New York; a kosher food court and more.
  • ADM pushed back its opening several times, after promising spring and summer openings also.  But it seems to be on track to open later this year.
  • Entertainment options include an indoor water park and theme park, a 16-story indoor ski slope and snow park, a performing arts theatre, a 300-foot-tall observation wheel, an aquarium, and NHL-size ice rink.

 

South Williamsburg is booming because younger professionals move in

(The Korea Times  6/24)

  • South Williamsburg was industrial zone in early 2000’s and unpopular area.  Once riverside re-development initiated, old factories were converted to condominiums which attracted more young people.  Almost every block has a Montessori kindergarten and children hair salon.
  • According to Trulia, the median price between May 2018 – May 2019 was $999,999 in South Williamsburg, which is 16% Up from a year ago.  Median rent is $2,587.
  • Price of condos in South Williamsburg is lower than ones in North Williamsburg and tax is low as well.
  • School systems include P.S 84 (Pk – 8th grades), J.H.S 050 (6-8th Grade), El Puente Academy for Peace and Justice (9 -12th grade).  Average SAT scorers in the high school are 398(Reading, Writing) and 383(Math) while NY State average is 534.
  • Subways J, M, Z lines are available and riding ferry, operating 6:57am – 10:11pm, will take 23 minutes to Manhattan downtown.

 

Toll fee between NJ and NY will be increased again by $1.25 to $13.75 (EasyPass)

(The Korea Times  6/26)

  • Port Authority increased the budget to $37B from $32.2B. Accordingly they have to increase the toll fee between NJ and NY.  Currently driver with EasyPass pays $12.50 and it will be $13.75 during 6am-10am and 4pm-8pm from next year.  Cash payers will pay $16.00 while they pay currently $15.00.
  • Car Pool driver(over 3 passengers) with EasyPass used to pay $6.50, but this discount will be no more available.

 

Damaged home buyers are returning to the market, called “Boomerang Buyers” 

(The Korea Daily 6/22)

  • 7 years have passed from 2012 when the recession due to financial crises has ended.  During this time, those owners had lost their homes through short sale, foreclosure, personal bankruptcy, etc.  They, called Boomerang buyers, are returning to the market which will become next major buying power for next few years.
  • According to Moody’s Analytics, next housing market recovery will be led by the age group of 35 – 64.
  • Up until now, M gen has been biggest buyer group as first home buyer.  NAR reported that FHB was 33% of total buyers in March while it was 30% a year ago.
  • In 4th Qt 2018, house owning rate of age between 35 – 44 was 61.1% while it was 58.9% a year ago: 2% Up.  At the same period, house owning rate of age between 45 – 55 was 70.1% while it was 69.5% a year ago: 0.6% Up
  • It was noticed that age group between 35 – 44 was age group between 27 – 36 during financial crises and they are Boomerang buyer group.
  • According to Core-Logic, 7.3M houses were foreclosed and 1.9M houses were short-sales during 2006 – 2014.
  • According to Experian, 2.8M people’s foreclosure, short sale, bankruptcy records were deleted between Jan 2016 – Nov 2018. 5% of them obtained the mortgage loan successfully and 53% did not applied the mortgage, buy they are Prime or Super Prime in terms of credit scores, Experian says.

 

NAR survey says one out two responded “it is a good time to sell”

(The Korea Daily  6/22)

  • According to NAR survey, 46% of samples say that it is a good time to sell while it was 37% in 1st Chief economist Lawrence Yun said that owners think that it is time to sell because the increase slop of house price is getting mild and they cannot make much more return even they keep the house one more year.
  • Buyers thinking that it is good time to buy are also increased: 38% of survey samples responded that it is a good time to buy while 28% responded it may be just ok to buy.
  • 43% of samples responded that there will no change on house price in next 6 months in their neighbor while 49% of samples responded that house price will be increased in next 6 months.
  • 27% of renters responded that they will be very difficult to get a mortgage while 30% of renters responded that they will be somewhat difficult.
  • Lawrence Yun concluded that lower interest rates will be kept for a while which will create positive impact to the market.

 

Home prices growth slows for 13th straight month

       (The Record  6/26)

  • S home price gains slowed for the 13th straight month in April, which is an evidence that weaker demand is keeping prices in check even as mortgage rates fall.  The S&P CoreLogic Case-Shiller reported that 20-city home price index rose 2.5% in April from a year ago, down slightly from an annual gain of 2.6% in March, which is the smallest increase in nearly seven years.
  • Price increase in also cooled in several cities where are formerly hot markets, including Seattle where prices were unchanged from a year ago.

 

More than a half of US households have joined Amazon as prime members

(The Korea Times  6/25)

  • According to RBC Capital Market report, 75M families joined Amazon as prime members which is 59% as of June while it was 25% in 2013. Worldwide members are more than 100M. RBC said Amazon membership is one of three most popular deals in USA: Amazon, McDonald Happy Meal, Netflix.  50% of prime members have spent more than $800.00 while only 14% have spent over $800.00.
  • The reasons that members are passionate about Amazon are 1) 94% for fast delivery, 2) 51% for Prime video service (Streaming video service), 3) 36% for special promotions.
  • The report says Americans do not mind to pay $119.00 annual fee ( $12.99 monthly)
  • This year “Prime Day” sale will be for 48 hours from 7/15/2019, not 36 hours which produced the biggest sale revenue historically.

 

 “Forever 21” has started re-structuring by hiring consulting company

     (The Korea Times  6/22)

  • According to WSJ, Forever 21 initiated a serious re-structuring through more funding, partial stores reduction, etc, but they will not file the Chapter 11 at this moment.  They hired a firm Lathem & Watkins for lease re-negotiation, and global management consulting company Alvarez and Marsal for company diagnosis and re-structuring.
  • News about Forever 21’s difficulty has been spread from 1 – 2 years ago in garment industries.  Once the company had about 800 stores worldwide and they were having tough competition against Zara and H & M, etc. and experienced revenue reduction due to on-line business such as Amazon.
  • They sold their HQ building, purchased in 2010, at 166M to Blackstone Feb this year.
  • Company is under negotiation with shopping mall landlord to reduce it’s super store.  In April the company retreated it’s China operation. They already have reduced their manpower by 12%.
  • Forever 21 has established in 1984 and last year’s revenue was $4B.
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Stephen Lee

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