Weekly News (June 5, 2019)
This week’s Interest Rate
30 Y Rate: 3.875%/ 15 Year Rate:3.375%/ 10 Y Treasury: 2.128%/ Prime Rate:5.5%
Two Bergen County Real Estate Brokers admitted their roles in short sale scheme
(Dailyvoice.com 5/31, The Korea Times 6.1)
- Steve Young Kang (64, Ridgefield) and Young Jin Son (49, Norwood) told a federal judge in Newark on 5/30/2019 that they recruited others to participate in the bank and wire fraud conspiracies in total of $4.6M “short-sale” scheme which are done mostly between June 2013 through Jan 2017. Both brokers are involved with the same co-schemer, Mehdi Kassai.
- Both Kang and Son will be sentenced on 10/1/2019. Kassai also pleaded guilty to his role in the scheme and is waiting for sentencing. If all charged confirmed, possible sentencing could be 30 years in prison, reported the prosecutor.
- US attorney Craig Carpenito credited Bergen County prosecutor’s office, special agents of the Federal Housing Finance Agency Office, special agents of the US Department of Homeland Security Investigations with making the case.
Palisades Park town might stop issuing 2 Family Duplex variances
(The Korea Daily 5/31)
- Town residents continually request changes on allowing duplex variances and Borough Administrator David Lorenzo starts responding. Planning board rejected 2 recent applications for variances which were not complying standard codes: Size needs 50 x100 ft, height needs 2.5 floor, 28 feet, side set back needs 6 feet, Rear set back needs 25 feet.
- There are no applications after these 2 applications for duplex variances have been rejected.
- Kwon, president of Palisades Park Voter’s Association commented this change in town administration is the result of continual efforts of Korean voters by being present at the city council meetings and planning board meetings.
Noah Bank CEO, Mr. Shin arrested for bribing, embezzlement, fraud w/SBA loans
(The Korea Daily 5/30)
- Between 2009 – 2012, Mr. Shin asked and received illegal commission sharing with a RE broker(Broker “A”) for SBA loan. For some case, Mr. Shin set up a dummy broker (Broker “A”) and received illegal commission through Broker “A”. To conceal this commission, Mr. Shin used 2 different RE broker offices that Broker “A” is operating. Mr. Shin arranged a loan to a company which he and Broker “A” co-owned, and that company defaulted a loan which resulted in loss of $611,491 to SBA.
- After Mr. Shin’s arrest, the bank appointed CFO Mr. Ahn, HyunJoon as an acting CEO and announced that all bank business will operate as usual and all deposits are safe under the FDIC protection and guideline.
New Condo will be developed in Manhattan Downtown.
(The Korea Times 6/1)
- The condo is located at 77 Greenwich St which was former Syms site. This 42 story building will have 90 units. Elementary school will use 1st floor through 8th floor and condo units will be from 9th floor to 42nd floor. Pre-sale will start from June 2019. Elementary school will open in 2022 and will enroll 450 students with PK – 5th grade.
- 1Br through 4Br are available, but mostly 2Br, 3Br, and the price starts from $1.7M.
Amazon CEO Bezos will buy 3 condo units in Manhattan, NY
(The Korea Daily 6/5)
- WSJ reported Bezos will sign the contract soon for 3 units on 5th Ave near Madison Square Park: Penthouse and 2 units underneath. Total price is about $80M. He will combine 3 floors which becomes 12 bed rooms and total of 16,900 sf. This sale will be the most expensive deal happened below 42nd.
- Recently Amazon is planning to lease the office space in Westside Manhattan after they cancelled the plan to move into LIC.
US PCE price index went up by 0.3% from last month
(The Korea Times 6/4)
- In April, PCE(Personal Consumption Expenditures) price index wet up by 0.3% which is biggest increase since Jan 2018 while Fed Reserves is watching this index very sensitively. Fed Reserves’ inflation goal is 2%. At least, the pressure of lowering the Ref Interest Rate is downward because general cure for low inflation is lowering interest rates.
Expectation for lowering Interest rates becomes bigger
(The Korea Times 6/5)
- As Fed Reserves chairman, Jerome Powell indicated worry about Trade War and possibility of lowering interest rates, lowering interest rates in September becomes high expectations in the market and possibly in December as well.
- With this indication and expectation of lowering interest rates, stock market responded positively- all stock market indexes rose respectively: Dow to 25,332(512 Up), S&P to 2,803(58 Up), Nasdaq to 7,527 (194 Up).
US House inventory is increased noticeably
(The Korea Daily 6/5)
- According to Core-Logic, house inventory in major 20 cities in US was increased by 6.8%, compared to March last year. In March last year inventory was 3.4 month and this year shows 4.1 month inventory. In Miami it shows 11 month inventory which is highest in US. Chicago, Honolulu, Las Vegas, and Seattle show 50-70% increase, compared to last year.
- Percentage of inventory over 180 days is 21.9% in March. A year ago it was 20.7%, and it was 40.2% in August, 2011.
RE Transaction is carried on via on-line: Redfin started from March, 2019
(The Korea Daily 6/1)
- Redfin has launched on-line sale transaction by “Redfin Direct” from March 2019 and completed 5 sale transactions in 2 month period in Boston area. This endeavor is considered as a high-tech company’s attack towards low-tech RE industries. Not only on-line companies such as Refin, Zillow, Open door, Offer Pad, but Coldwell bankers is preparing Instant Purchasing program.
- “Redfin Direct” program connects a buyer to home owner and home owner pays 2% commission. Buyer will have to go through 55 item guideline through on-line. In fact, Redfin started this program in 2006 and nobody paid attention to this program at that time. Redfin started with Web based system through on-line map function.
- Total commission size is $110B in US.