Weekly News (May 5, 2021)
by Stephen Lee (Broker of Record/ President at C Land Realty)
This week’s Interest Rate (18th Week)
(By Fairway Home Loan/ Time Mortgage)
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||3.375||2.875||3.490||0.657|
|A month ago||3.000||2.375||2.750||1.665|
Prime Rate:3.0% / Ref IR: 0.00- 0.25% .
- Interest rate is stable this week. The FHA and VA loan interest rates are very good.
- 2021 Conventional loan limit: Conforming: $548,250/ Conforming high balance: $882,375
House Price in Palisades Park, NJ rose 41.1% for the last 10 Years
(Korea Times 5/5)
- According to Star Ledger and FHFA (HPI), the house price rose a double digits in heavily Korean populated towns in Northern NJ such as Palisades Park by 41.1%, Edgewater by 36.4%, Cliffside Park by 32.9%, Leonia by 31.5%, Fort Lee by 26.1%, Cresskill by 22.9%, Paramus by 22.1%, Tenafly by 19.9%, Closter by 19.8%, Alpine by 19.7%, and Englewood Cliffs by 15.1% for the last 10 years.
- Meanwhile, in Hudson County, house prices in Jersey City rose 98% and Hoboken’s prices rose 61%.
- The data indicates that towns closer to the Manhattan increased more, and the reason for highest increase in Palisades Park is they allow new construction duplex houses upon knocking down old houses.
N.Y. to Lift Curfew Restaurants, Bars
(WSJ 4/29 )
- The midnight curfew on bars and restaurants will expire on May 17 for outdoor-dining areas and May 31 for indoor-dining area, the governor said. Starting Monday, patrons also will be allowed to sit at bars in NYC, rather than just at tables, Mr. Cuomo said.
- The state also will allow more dancing at catered events – such as weddings – effective Monday, he said.
- On Monday, the governor said he would like to ease restrictions but people are still dying from Covid-19. But Wednesday in his announcement he said that the state had made enough progress to justify the change, “To be clear: we will only be able to maintain this progress if everyone gets the Covid vaccine, otherwise we risk going backward.”
A “Land Grab” in New York to Cash in on Marijuana
(NYT 5/5 )
- It has been only five weeks since New York State legalized the use of recreational Marijuana. The sale of legal pot in the state is still a year away. But already the rush is on to get a piece of what could be a part of $4.2B industry in the Empire State.
- Brokers are talking to landlords about leasing storefronts to dispensaries. Representatives of our-of-state cannabis businesses are flying in to scope out properties. And suppliers of medical marijuana are expanding in the hope that they will be able to branch into recreational sales. What is happening in NY has already occurred in in other states as well.
- But still some challenges: marijuana remains illegal on the federal level. The Drug Enforcement Administration still classifies marijuana as controlled substance. Banks are skittish about lending to cannabis businesses. Many landlords won’t lease to cannabis companies, either because of the risk in having a tenant that violates federal laws or unsavory reputation that still clings to weed.
- Zoning also puts the squeeze on real estate available to cannabis companies, often relegating them to industrial areas.
- “It’s a catch-22,” said Kristin Jordan, a cannabis lawyer in NYC. “You want to secure real estate, but you don’t want to jump the gun.”
Mixed Use building in NoMad, Manhattan sold at $8.85M ($986/sf)
(NYT 5/5 )
- Built in 1920, this 8,969 sf, five-story building in NoMad at 102 W 29th St. between Avenue of the America and 7th Ave. has four apartments and one retail unit, which is occupied by smoke shop.
520,000 New Stores were open since outbreak of COVID-19 last year
(Korea Times 5/3)
- According to CNBC/Yelp, total of 516,754 new stores are open from 4/1/2020 through 3/31/3021, which was 11% less than a year before. However, 28% of these new stores were open in the 1st Qt in 2021which is strong signal of economy recovery.
- Among new stores open, 69,000 stores are restaurants which was 14 % less than year before, but this indicates strong recovery of restaurants business which were hit most.
U.S, Individual Income increased 21% in March which is the biggest in history
(Korea Times 5/3)
- U.S. Department of Commerce announced that individual income is increased 21.1% in March from the last month because of the stimulus package of $1.9T by Biden Admin, which is the record high since it started collecting data in 1946.
- Meanwhile, individual savings were increased 27.6% in March which was huge increase from 13.9% in February.
- Accordingly, consumer spending (PCE) is increased 4.2% which was higher than the expert’s forecast of 4.1%.
New Biden’s Proposal Takes Aim at Real-Estate Tax Loophole
- President Biden’s new economic plan would eliminate a tax break for many real-estate owners that has enables them to defer paying capital gains on property sales. Closing that tax loophole, which has existed since 1921, is part of his $1.9T spending package for new social programs. The current law allows investors to defer paying tax on real-estate gains if they reinvest the proceeds on other properties within six months of the sale, which is called 1031 exchange.
- The Biden proposal would abolish 1031 exchanges on real-estate profits of more than $500,000.
- Many real-estate investors continue to buy and sell properties this way until they die, passing the capital gains on to their heirs’ tax free at death – “stepping up base”. Mr. Biden seeks to close the death loophole, too, by taxing capital gains on inherited assets.
- A congressional tax committee estimated that the 1031 tax break would save investors more than $41B between 2020 and 2014.
- Dozens of organizations have registered to lobby the federal government against repealing 1031 exchanges, according to Senate lobbying disclosures, including the American Farm Bureau Federation, the National Association of Realtors(NAR), the Asian American Hotel Owners Associations.
U.S. Economy Bounces Back Near its Peak: Economy Surged in 1st Qt
- Consumer lead burst of activity, bring nation within 1% of the level reached pre-pandemic. A burst of growth brought the U.S. economy to just a hair below its pre-pandemic size in the 1st Qt, extending what is shaping up to be a rapid, consumer-driven recovery this year.
- GDP, the nation’s broadest measure of goods and services, grew at a 6.4% seasonally adjusted annual rate in January through March, the Commerce Department said Thursday. Households, many of them vaccinated and armed with federal stimulus dollars, drove the 1st Qt surge in output by shelling out more for cars, bicycles, furniture and other big-ticket goods.
- Just a year ago, the economy was sharply contracting, but congress responded quickly, approving several packages totaling about $5T in aid for households and businesses. The Federal Reserve pushed its benchmark interest rate to near zero to lower borrowing costs. On top of that, since late last year, tens of millions of households have received at least one vaccine shot of the Covid-19 vaccine.
- Robust growth has risks, such as causing the economy to overheat and trigger a sharp rise in consumer prices. Fed officials noted the recent pickup in inflation in a rate-policy statement released Wednesday, but they said they expect the increase to be temporary. The Fed expects inflation to rise above the central bank’s goal of averaging 2% this year, and recede to that level by the end of next year.
Others/Tech News : Microsoft, Bill Gates filed a petition for divorce in King County, WA.
- Bill and Melinda Gates Foundation, the philanthropy has transformed the world’s fight against poverty, inequity, and disease over more than two decades.
- The foundation’s mission stays intact: Bill and Melinda will still work together after divorce.
- Their foundation’s $50B endowment is in trust that is irrevocable.