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Weekly News (November 4, 2020)

This week’s Interest Rate (45th Week)

(By Fairway Asset )

   30 yr fx(%)  15 yr fx(%) FHA(%) 10 yr Tr Y (%)
A year ago      3.750       3.25          1.727
A month ago      2.875       2.490     2.625          0.664
Last week      2.875       2.490     2.625          0.775
This week      2.875       2.375     2.625          0.886

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

 

Prime Rate:3.0% / Ref IR: 0.00- 0.25%    (By Time Mortgage)
Due to failure to agree on the 2nd stimulus package, interest rates might be still low, even go down.

 

NYC Commercial Property Tax default increased 50% from a year ago

(Korea Daily  11/04)

  • According to NYC comptroller, commercial building owners including offices, retails, factories, storages who defaulted their property tax has reached to 4% which means one out of 25 owners could not pay their property tax.  This indicates defaulted owners are increased 50% from the last year.
  • Some say this default situation can be increased sharply as pandemic effect will be continued further.
  • NYC will face difficulty to collect tax and the city will charge high interests to those defaulted property owners and prepare tax sales for those defaulted properties.

 

Home transactions are reduced 2.2% in September, according to NAR

(Korea Daily 10/31)

  • 2% reduction of pending sales in September might indicate buyers hit the limit of high home prices.  This decrease of pending sales is the first time for the last 4 months.  However, total sales rose 20.5%, compare to the last year.
  • Sales increased 2% in Northeast area in September, and increased 27.7% from the same period a year ago. In Midwest area, sales decreased 3.2% and decreased 18.5% from a year ago same period.
  • Lawrence Yun mentioned that low interest rates and recovering job market will induce more home buying, and also those who did not consider in early pandemic period are now looking into buying homes.
  • Chief economist of Realtor.com said the benefit of low interest rates is minimized due to high home prices. Inventory situation is getting bit better, but real positive impact to inventory situation will be shown in the spring of 2021.

 

The biggest Real Estate deal with pandemic: “TransAmerica Pyramid” at 650M

(Korea Daily  11/3)

  • San Francisco’s landmark, TransAmerica Pyramid building was sold at 650M to Deutsche Finance America and developer Michael Shvo, which was the biggest real estate deal since the start of the coronavirus pandemic.
  • This iconic 48 story building was owned by Aegon, a Dutch insurance company since 1999.

 

23M people are planning to move due to spreading tele-commuting

(Korea Times  11/3)

  • According to the survey report by UpWork, 6.9 – 11.5% favor to moving if they have opportunity for tele-commuting among 20,000 survey participants.  If interpolation applied to total US population, 14M – 23M people are planning to move if tele-commuting is feasible to them.
  • In big cities, 20,6% want to move, and 12.2% in suburban area of big cities and 12.2% in mid-sixed cities, and 8.6% in small cities.
  • 5% says they will move to about 10% cheaper houses.

 

US Coronavirus positives are over 9M

(Korea Daily  10/31)

  • Johns Hopkins University reported on10/30/2020 that Coronavirus positives in US is 9,007,298 and death toll is 229,293.
  • The first positive is found on 1/20 in US and it took 98 days to reach to 1M positives.
  • After that, it took 43 days to reach to 2M on 6/10, and it took 28 days to reach to 3M.
  • After 15 days, another 1M positives are added on 7/23. 6M on 8/31,  7M on 9/25, and 8M on 10/16.  After 14 days later 1M are added.  Overall it took 284 days since the first positive on 1/20.

 

Next year Mortgage market will be booming

(Korea Times  11/2)

  • According to MBA, next year new mortgage loan will increase 8.5%, compared to 2020, to $1.54T, which will more than $1.51T in 2005.
  • Chief economist of MBA forecasted that the existing home sales will increase 10% and new construction will increase 12%, compared to 2020.
  • 30 year Interest rates will increase to 3.3% from 3%, average rates in 2020, and FRB will back up the zero reference interest rates.
  • Also he mentioned that home sales and mortgage demand will increase strongly if inventory improves while pandemic situation is subdued, and transaction time to close will be shortened as well.

 

Pandemic hammering commercial builders

  (Record 11/4)

  • Even as the housing market booms, the outlook for the construction of shops, office buildings, hotels and other commercial structures has grown bleaker.  About 70% of commercial contractors say their projects have been postponed or canceled during the pandemic, according to a survey of more than 1000 firms by Associated General Contractors, the industry’s leading trade group.
  • Some sectors are doing well. Warehouse construction spending is up 16.5% this year, according to census data, as consumers buy more items online that are shipped to their homes from distribution centers.
  • Nationally, nonresidential construction employment fell 7.1% from February to September, according to Labor Dept and AGC. 30% of contractors surveyed by AGC furloughed or laid off workers from Mar. 1 to Oct. 1 as a result of the pandemic.

 

More unmarried couple buying homes

(WSJ  11/4)

  • As US homes sales rise to a 14-year high and families search for larger spaces in quarantine, more unmarried couple may be considering buying a house together.
  • Number of unmarried couple living together nearly tripled in the past two decades to 17M, with a notable increase among those aged 65 or older, according to US census.
  • Only one borrower is possible, who is better for FICO score and income. For both borrowers, they can combine income, but lowest FICO score has to be used.
  • Ownership arrangement can be optional : “tenancy in common” is most common.
  • Tax return can be separate: One can be itemized deduction and the other can be standard deduction.
  • For possible breakout, there need a written partnership agreement for the house only.

 


 

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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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