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Weekly News (November 18, 2020)

This week’s Interest Rate (48th Week)

(By Fairway Asset )

   30 yr fx(%)  15 yr fx(%) FHA(%) 10 yr Tr Y (%)
A year ago      3.750       3.25          1.917
A month ago      2.875       2.490     2.625          0.664
Last week      2.875       2.375     2.625          0.886
This week      2.750       2.375     2.625          0.878

(The rate based on 25% down payment with 740 above credit score)

Prime Rate:3.0% / Ref IR: 0.00- 0.25% .

 

New Jersey towns and counties will be allowed to close nonessential biz early

(Record 11/13)

  • Towns and counties will have the discretion to close bars, restaurants and other businesses by 8:00pm in an effort to stem any local outbreaks of COVID-19 under an executive order for Gov. Phil Murphy to sign Thursday.
  • This is a localized approach because this order will allow local officials to close any business not considered essential two hour earlier that a statewide order issued this week that stops bars and restaurants from operating indoor after 10 pm.
  • While the state limit on indoor gatherings remains at 25 people or 25% of a room’s capacity, Murphy said he might consider reducing that to 10, a limit already imposed by some other states such as New York.

 

About 300,000 New Yorkers have left due to COVID-19 → More rent concessions

(Korea Daily  11/18)

  • From April to October, total of 295,103 people have requested the address change to USPS, which is double of the last year’s number. Especially Manhattan shows this phenomenon distinctively.  In Oct, vacancy rate in Manhattan is 6.14% which means 16,145 units are vacant. It is the highest vacancy rate in 14 years.
  • The median rent has dropped 15.9% compared to last year same period.
  • Landlords provide even 4 month free rent and free Internet, etc in LIC, neighborhood of Columbia University and Hudson Yard area. Good promotional deals are possible.
  • However, rent is increased in single family house around family-oriented neighborhood and suburban area.

 

SL Green landed a $1.25B construction loan for its office redevelopment project 

(TRD/ Jason Shim  11/16)

  • The REIT which is developing the buildings in partnership with the National Pension Service of Korea and Hines, announced the loan Monday.  The loan was provided by a consortium of banks including Wells Fargo, TD Bank, Goldman Sachs, Bank of America, Deutsche Bank and Axos Bank.
  • “Despite the headwinds presented by current and temporary challenges, we remain focused on boosting the New York City economy by creating thousands of construction jobs and bringing a new, best-in-class office tower to the highly sought-after Flatiron/Midtown South submarket for the first time in a decade,” said Marc Holliday, chairman and CEO of SL Green in a statement.
  • The redevelopment project is One Madison Avenue which was one of the city’s largest office buildings, spanning the full block between Park and Madison Avenues and East 23rd and East 24th Streets.
  • In May, SL Green sold 49.5 percent of its interest in One Madison Avenue to Hines and the National Pension Service of Korea in a joint venture partnership.  Those two firms have committed at least $492.2 million in equity to the project.

 

Korean money moves to US Real Estate market.   

(Korea Daily  11/18)

  • $1.56B Korean Investment money was spent to purchase US commercial properties this year, reported WSJ on 11/17, which was increased 25.8% from a year ago.
  • Korea money takes the 3rd position in foreign investment for commercial properties only behind Germany and Canada. China has dropped significantly in commercial property investment in US.
  • The reasons are  1) Commercial property price drop due to COVID-19 and  2) super low interest rates in US.

 

NAR reported that single house price rose in all 181 Metro area in US

(Korea Daily  11/17)

  • It is first time that all 181 metro area home median price rose in 40 years.  NAR reported that existing single house median price rose in all 181 metro area at 3rd Qt compared to the same period a year ago.  117 (65%) of 181 metro area’s median home price rose double digits. At the previous Qt, it was only 15 areas.
  • Nationwide single house’s median price is $313,500 which is 12 % up compared to a year ago. (Same period, nationwide median income is $81,477 which indicates home price increasing rate is 4 times of income increasing rate)
  • NAR indicated the reasons for this price boom are  1) historically low interest rates   2) buyer competition due to low inventory  3) demand for bigger home due to COVID-19.
  • Lawrence Yun mentioned that merits of low interest rates keep attracting home buyers in to the market.

 

Moderna Vaccine achieved 94.5% effectiveness, announced on 11/16

   (Korea Times/ Stat News   11/17 )

  • The Moderna vaccine reduced the risk of COVID-19 infection by 94.5%.  The news comes after a week results came from Pfizer and BioNtech, which announced broadly similar results of 90% efficacy.
  • Both companies use the same mRNA method, but Moderna can be stored simply in a refrigerator which will be much simpler to distribute.
  • Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, admitted the preliminary data for the Moderna and the Pfizer vaccines – the only two so far to have early estimates of vaccine efficacy – are better than he has anticipated.
  • Pfizer will test vaccine in four states first, Rhode Island, Texas, New Mexico, Tennessee.

 

Microsoft puts Cloud in Space, working with Space X

(WSJ  10/21)

  • Microsoft Corp. is teaming up with Elon Musk’s Space X and others as the software giant opens a new front in its cloud-computing battle with Amazon.com Inc, targeting space customers.  Competition in the cloud between Amazon, the market leader, and No.2 Microsoft has been heating up in recent years.
  • Space X launched Falcon 9 rocket with four astronauts’ members on 11/15 for its first operational flight.
  • Space X, which is in the process of deploying its Starlink project consisting of thousands of high-speed internet satellite intended to provide connectivity around the globe, makes a natural partner for Microsoft.
  • Microsoft last year beat out Amazon for a potential $10B cloud-computing contract for the Pentagon.

 

Amazon takes on Pharmacies by selling medications online

(WSJ/ Record  11/18 )

  • com is adding a pharmacy counter to its virtual store, a long-anticipated push deeper into health care that sent shares of traditional drugstores falling.
  • The e-commerce giant’s advance into the pharmacy business will test its ability to crack a market where national chains and big insurance companies often control how drugs dispensed.
  • An analyst at mutual-fund giant Neuberger Berman said that success is far from guaranteed, given the factors at play between pharmacies, insurers and pharmacy-benefit managers.  CVS, for instance, is able to steer Aetna members to its pharmacies, and the big drugstore chains has deep relationships with big insurers.

 

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Stephen Lee

He has been in Real Estate industry in about 20 years and has been Broker of Record for 9 years. His experience includes residential, commercial, and property management. Prior to involving with Real Estate business, he has been involved in the digital communication equipment industry utilizing his engineering background and education, including running own company. He has established C Land Realty in 2011 which has grown to staffing over 100 Real Estate agents and the annual transaction amount of over $110,000,000 today.

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