Weekly News (September 25, 2019)
This week’s Interest Rate
30 Y Rate: 3.750%/ 15 Year Rate:3.375%/ 10 Y Treasury: 1.652%/ Prime Rate:5.00%
Ref IR: 1.75- 2.00%
FOMC meeting decided to lower FRR by 0.25% to 1.75%-2.00% on 18th
(The Korea Times 9/19)
- Powel, Chairperson at FOMC mentioned the lowering FRR this time was to buy a kind of insurance for the economy which is exposed to some degree of danger. FOMC believes US economy is still strong and raised economy growth forecast by 0.1% to 2.2% from 2.1%. 7 out of 17 FOMC members foresee additional FRR lowering in this year.
- Also CNN forecasted on one or more additional FRR lowering this year.
- Lower FRR is good for consumers with short term loan such as car loan, small business loan, and credit card loan as well as education loan.
Edgewater Multiplex Theater is being demolished.
(The Korea Times 9/19)
- Multiplex Theater at 339 River Rd, Edgewater which has been closed November in 2018. Land owner was not sure about the future, but a rumor was spread that they will build a condo.
- Huge mixed-use complex at 575 River Rd, Edgewater has been planned for 384 residential units.
- These potential two development projects will make substantial changes on residential environment and commercial district in the neighborhood.
ALAND, Korean fashion brand, will open its flagship location at ADM mall, NJ
(RE Weekly 9/18)
- ALAND founded by the sisters Kinam Jung and Jungeun Jung in 2005 is multi-concept store that offers affordable fashion basic and curated products by emerging and independent Korean designers such as men’s and women’s clothing, shoes, accessories, home décor, beauty and wellness products.
- At 10,000 sf in ADM mall will serve as a flagship location for the brand, which was the 2nd in US. The 1st store opened in Brooklyn last summer.
- They operate more than 20 stores in Korea, with additional locations in Hong Kong and Thailand.
- ADM is set to open on 10/25/2019 and total size is about 3M sf including 450 shops, services and amenities.
South Koreans, Mirae Asset Management Company, purchased Anbang portfolio
- Mirae Asset struck the deal to buy Anbang Insurance Group’s portfolio of 15 US hotels for $5.8B, which was the biggest cross border real estate investment by a South Korean company. The portfolio owned by Blackstone was purchased by Anbang group in 2016 and it comprised of approximately 720,000 sf meeting spaces and 6,912 rooms.
- Bank of America Merrill Lynch is acting as sole financial advisor to Anbang on the sale of the portfolio.
Landlord cannot threaten tenant because of immigration status
(The Korea Daily 9/24)
- As the first lawsuit case in NYC, landlord got total fine of $17,000 due to threatening tenant because of immigration status: $5,000 fine and $12,000 damage payment plus 50 civil services. Tenant was behind rent and landlord threatened tenant by text message mentioning that he will call ICE for insufficient immigration document.
- The court record shows tenant rent due was $14,440 as of Oct 2018 when he moved out.
Number of new construction in August was increased by 12.3% in US
(The Korea Times 9/20)
- US Commerce Department announced starting new construction has reached to 1.364M in August which is up by 12.3% from last month. This is the record high since June 2007 for 12 years. It surpassed the forecast which was 1.25M. Number of new permit also is increased to 866,000 which is up by 4.5% from last month.
- The reason of the increase is that low interest rates and strong labor market.
- New construction was not doing well from 2017 and getting recovered from downside.
World economy growth rate is forecasted to 2.9% this year and 3.0% next year
(The Korean Times 9/20)
- According to OECD Interim Economic Outlook, the forecasted has been adjusted downward by 0.3% in 2019 and 0.4% in 2020 from May forecast to 2.9% and 3.0% respectively. If this OECD forecast will be correct, then it will be the first time that will be below than 3% after financial crises.
- World economy growth rate was 5.3% in 2010 and stayed above 3% so far.
- OECD also adjusted G20 growth rate forecast downward by 0.3% in 2019 and 0.4% in 2020 to 3.1% and 3.2% respectively.
- Among G2, US was lowered forecast from 2.8% to 2.4% and China was lowered from 6.2% to 6.1%.
House flipping profits are lowest for 8 years in US
(The Korea Times 9/25)
- According to ATTOM Data Solutions, this year number of house flipping was reduced by 5% from last year. Between 2004 – 2006, flipping has been one of major income sources for middle class. In 2nd Qt in 2019, number of flipping is 59,876, which is up by 12.4% from 1st Qt, but it was down by 5% from last year.
- Average flipping profit is $62,700 which is 39.9% of the cost of buying house. It was 44.4% last year.
- Median price of buying is $157,300 and median price of selling is $220,000. Average DOM is 184 which is 4 days longer than a year ago.
- Camden, NJ is 4th highest flipping area and houses flipped takes 28.6% of total transactions.
76% of home buyers found their houses through cell phones
(The Korea Daily 9/21)
- According to NAR report, 76% of home buyers find their houses via cell phones. Under 38 years old age group, 80% used cell phones to locate houses initially. 78% of age group between 39- 53 (X Gen) use cell phones. 68% for age group between 54-63.
- 17% of home buyers found an agent via cell phone.
- Buyers met an agent and saw 10 houses during 10 weeks in average.
- The most difficult issues, home buyers answered, are 1) to find right house for them (56% of home buyers) , 2) to take care of documentation (20%), 3) to understand buying procedure(16%), 4) down payment issue (13%), 5) mortgage approval (8%).
- 53% answered they use Open House and 47% do not use Open House.