Weekly News (May 8, 2019)
This week’s Interest Rate
30 Y Rate: 4.000%/ 15 Year Rate:3.625%/ 10 Y Treasury: 2.462%/ Prime Rate:5.5%
Structure built to contain Naphthalene fumes from Edgewater Superfund site
(Grid Bits 5/4)
- Workers erect a large, temporary tent-like structure on hopes of containing naphthalene fumes when work resumes at the Quanta Superfund site in Edgewater, NJ. The first four-story structure is being built in response to widespread complaints by residents over the noxious fumes that inundated nearby communities for months.
- Stockpiles of contaminated soil and the process of solidify it onsite will now be managed under the structure being installed to control vapors, instead of out in open, according to US EPA, which is overseeing the $78M cleanup plan.
- Air filtration units will be installed next to the tents to move 95 % of the contaminants before venting to the outside.
- The site has been used for manufacturing of coal tar since the 19th century (1940’)
The Gateway Project tunneling between NY and NJ might be resumed
(The Korea Daily 5/4)
- In the beginning of the year, Trump deleted the budget for the Gateway project. This project was proposed Obama era in 2011, and the projected cost was $2T. On 5/2/2019, House Representative Transportation Committee chair Peter de Fazio has sent a letter that the committee might support this project. Peter de Fazio has shown interests on this project and recently looked around Hudson tunnel by himself.
- NJ Portal bridge project is ready to be initiated including environmental study once the budget is approved, but tunnel project under Hudson river is not ready.
New Luxury Condo development in Dumbo, Brooklyn, NY: 165 units
(The Korea Times 5/4)
- The new condo will be built at 98 Front Street, Brooklyn. It is expected be very hot because it will be marketed at lower price than other Dumbo area. The price starts from $595,000 for studio and $795,000 for 1 bedroom. And 2 bedroom will start from $1.38M and 3-4 bedrooms will be from $1.85 to $4M.
- The amenities include pool & spa, fitness center, courtyard garden, roof-top terrace. It will be completed in 2020.
- RE price for Dumbo area which is a part of Brooklyn Tech Triangle (Brooklyn downtown, Dumbo, Brooklyn Navy yard) went up tremendously for last 20 years.
- Among recent 51 listings, there is only one listing was under $1M.
Mortgage Interest rates are going down in US
(The Korean Daily 5/4)
- Mortgage interest rates are up in April, but it went down as we enter in May. Freddie Mac announced 30 year fixed national average is 4.14% compared to last week’s 4.2% while it was 4.55% a year ago. 15 year fixed rates become 3.60% and it was 3.64% last week while it was 4.03% a year ago.
- This low rates would trigger more buyers to move as more seasonal activities are
New changes in Real Estate market: More offices move into shopping malls
(The Korea Daily 5/6)
- Offices in a shopping mall is new trend such as in LA. Traditional retail stores in shopping malls close down due to super-sized internet commerce business. Shopping mall owners would deem that office is less risky and it might create further foot traffic to other stores. It can take advantage of infra-structure near shopping mall, high-ceiling, and generous space which can attract offices.
- West Pavilion shopping center with 584,000 sf becomes One West office complex with Google local office as an anchor tenant. The remodeling project will cost $410M and completed in 2022.
- “New England Development” who has a shopping mall in Cambridge, MA started remodeling project to convert 3 story, 140,000 sf retail spaces to office spaces.
Moderately priced houses will attract more buyers in US
- According to Lawrence Yun at NAR, the market is bifurcated. Moderately priced homes are in high demand while upper-end homes are moving slowly. If builders can ramp up production of lower priced homes, plenty of business awaits them.
- With the economy set to grow this year, we expect to set a record with more than 120 consecutive months of GDP expansion. Consumer index reached to 124 in March compared to the 50-year average figure of 93.
- 37 percent of consumers strongly believe now is a good time to buy, according to NAR’s 1st quarter figures. It was up from 34 percent in the prior quarter.
- Even with the slowdown late last year, the median price soared to new high at $259,300. The expected price gain of 3 percent would bring the median price to around $265,000 and would lead to commensurate gain in equity that could total $900B.
- Just as encouraging, people’s wage growth will outpace home price appreciation for the first time since 2010.
US April unemployment rate reached to 3.6%, which becomes lowest in 50 years
(The Korea Daily 5/4)
- In April, non-agriculture jobs are increased by 263,000 while 189,000 was added last month. Non-agriculture jobs are increased in consecutive 103 months. In April unemployment rate hit 3.6% while it was 3.5% in Dec, 1969.
- In reality, physical labor force was reduced by 490,000 and economy participation rate was reduced from 63% to 62.8%.
- WSJ said 1) April non-agriculture job was increased and 2) unemployment rate was decreased indicate US economy is sound.
US-China Trade War becomes worse, and US stock market tumbled
(The Record 5/8)
- The Dow Jones Index was down by 470 on Tuesday amid a broad sell-off on Wall Street as the US and China closer to an escalation of their already costly trade war. Washington has accused Beijing of reneging on its commitments and is preparing to raise import tax on $200B of Chinese goods to 25% from 10%, and to impose tariffs on additional $325B in imports.
- This week investors in the technology and industrials sectors dumped shares of companies that bring in significant revenues from China.
- Warren Buffett expressed worries for the trade war, but he recognized this would be Trump’s tactic for quick results, not playing negotiation games which usually take a long time.
Tech/Other News : A “proptech” boom makes buildings more efficient and offers an edge in buying and selling
(The NYT 5/8)
A strat-up company, New York based, who wants to develop an operating system: Nantum which capture and controls real-time data on a metrics like building occupancy, water usage, office temperature, etc. Globally $12B invested in the proptech start-ups.