Weekly News (October 7, 2020)
This week’s Interest Rate (41st Week)
(By Fairway Asset )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||3.500||3.125||1.462|
|A month ago||2.750||2.375||2.625||0.662|
(The rate based on 25% down payment with 740 above credit score)
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
FHFA will add an adverse Market fee as of 12/1/2020. There is potential interest rates rise.
As the 2nd economic stimulus plan is emerged, the interest rates might go up bit
(by Time Mortgage)
Englewood Cliffs Apartment complex project has been approved by town
(Korea Times/Daily 10/06)
- The town council has agreed with the developer for the apartment complex project at 800 Sylvan Ave after over 12 hour discussion: 3 favor, 2 oppose, 1 waiver. The final plan was reduced to 450 units from 600 units, with 90 units of low-income units.
- Republican council members are opposing the approval arguing that this approval will allow more apartment complex in town in the future. More apartment complexes will lower the property value of residents and the quality of life.
- Opposing residents will start preparing the legal action suing the town and beginning the fund raising for the suit.
The “Current on River” rental complex in Hackensack celebrates grand opening
- The Current on River features 254 one- and two-bedroom apartments, ranging from 579 sf to 1,244 sf. Each unit –outfitted with stainless-steel appliances, washer/dryer, and walk-in closets-has its own private balcony space.
- Rents start $1,950 for a junior one bedroom, and $2,600 for a two-bedroom apartment.
- The location is at 18 East Camden St, Hackensack. The developer is Hekemian & Co and the interior designer is Hartman Design Group.
- Contact: 201 347 0700 Currentonriver.com
Recreational Marijuana use might be legal in NJ, the biggest market in US
(Korea Daily 10/6)
- The voters will decide at the November 3rd election that NJ will legalize recreational marijuana (Cannabis).
- The State government is favoring it’s use for recreational purpose because the State is in financial trouble due to the COVID-19 set back. If recreational marijuana is legalized in NJ, it can be the biggest market in US and the tax collection will be $126M a year and also the State is looking forward tremendous job creation.
- In April, a survey revealed that 64% of NJ residence will be favoring recreational marijuana legalization in the state.
New Jersey starts receiving 2nd SLEG (Small Landlord Emergency Grant)
(Korea Times 10/7)
- Landlords owning 3 – 30 units can apply the 2nd SLEG for uncollected rent during April to July, while 1st SLEG accepted application from landlords with 3 – 10 units.
- SLEG eligibility is 1) at least 1 tenant is victimized by COVID-19 and 2) low-to-moderate rent : Maximum rent thresholds for renters with lower than 80% of median income.
- Info : nj.gov/dca/hmfa/rentals/sleg2/index.shtml
Korean investors become major players in commercial market in US
(Korea Daily 10/2)
- Korea National Pension Fund purchased 49.5% share of “SL Green”, 1.4M sf office building neighboring Madison Square Park at $494M, which was one of biggest deals in 2nd Qt in Manhattan. Previously, National Pension Fund invested $500M to One Vanderbilt, 1.6M sf office building, which was completed this September.
- National Pension Fund manages $600B assets and it is the 3rd place in terms of pension funds worldwide.
- Hana Finance Group Consortium is considered as preferred buyer for the office building which is worth of $700M. Seattle Lotte Hotel project, 44 story building, was carried on by joint investment of Hana Finance and Lotte Hotel.
- Korea is 3rd place among foreign investors in US, following after Canada, 1st place and Germany, 2nd Korean investment totals $3.6B for the first half of this year, which is 230% increase from the same period of the previous year.
Last week, new mortgage application is reduced surprisingly
(Korea Times 10/2)
- MBA reported on 9/30 that the mortgage application including Re-Fi was down 4.8%, from the last week. Re-Fi application alone was reduced 7%, compared to last week. But still it is 52% higher than the same period of last year. Mortgage application was reduced 2% from a week ago, but still it is 22% higher than last year.
- The reasons are 1) immune to the yearlong low interest rates 2) home price increase due to low inventory.
Huge Mortgage default is expected due to longer economy recession
(Korea Time 10/2)
- For last 10 years, home owners were enjoying increased home equity, which is about $10T in US. However many of them are “House rich, Cash poor” which means high risk of mortgage default.
- If the similar situation like 10 years ago financial crises, organization investors will have another big opportunity to increase their assets and they were preparing huge funds from the beginning of the COVID-19 crises. In fact, these investors stock prices are up side recently. “Invitation homes:” and “American Homes for rent” stocks are up 79% and 59 % respectively since March.
- American Homes for rent, operating 53,000 rental homes, has agreed to build rental apartment construction project, which is worth of $625M, with JP Morgan
- Invitation homes spends $200M every month to purchase rental homes to increase their renal business.
Foreclosure set to rise in commercial sectors
- Across the US, 278 properties backing securitized mortgages were in foreclosures as of last week, according to Trepp, and at least 80% of them had financial problems related COVID-19.
- CEO of NAI Global, Jay Olshonsky expects foreclosures in commercial real estate caused by pandemic to be far worse than what happened during and after the 2007-2009 recession.
- Still foreclosures remain an exception. Banks, which are getting plenty of leeway from regulators, have been more willing to grant long forbearance periods and extend them if necessary. Many nonbank lenders are more eager to foreclose, but often lack the staff handle all the troubled properties. Meantime, number of states including NY, have put moratoria on foreclosures.
Trump halts Stimulus Package talk until after election
- President Trump pulled the plug on ongoing bipartisan coronavirus relief talks, putting off efforts to send more federal aid to households and businesses at least until after Election Day, an abrupt move that jolted Wall Street and surprised lawmakers of both parties.
- The call to end talks came hours after Federal Reserve Chairman Jerome Powell warmed of dire economic consequences if Congress and White House don’t provide additional support households and businesses.
- Two sides had been edging closer, after the House passed a $2.2T, down from it’s earlier $3.5T.
- Instead, the president had instructed Senate Majority leader Mitch McConnell to focus on confirming Supreme Court nominee Amy Coney Barrett, whose Judiciary Committee hearings are scheduled to start Monday.
Others/Tech News : Apple is expected to unveil 5G iPhone next week
(WSJ 10/7) – Expectations are high for the next iPhone because 5G connectivity is expected to usher in big sales and fat profits, investors and analysts say.