Weekly News (September 22, 2021)

This week’s Interest Rate (38th Week)

(By Fairway Home Loan)

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

• 3% Down payment for 1^st home buyer is available
• 5% Down payment 2-4 units FHA program available
• 15% Down payment 2 families -conventional program available
• Potential home buyer — Have a pre-approval first before the shop.  Now we have 48hour underwriting turn-around times for regular loans
• 2021 Conventional loan limit:

• Conforming SFR: $548,250/ Conforming high balance: $882,375
• Confirming 2 Family: $702,000/ Confirming High Balance: $1,053,000

Palisades Park, NJ will start Free Kinder from Sep 2022

(Record / Korea Times 9/17)

• Phil Murphy visited Palisades Park, NJ on 16^th and announced the state prepared the budget for free Kinder program in the town from Sep 2022 for the age group of 3 to 4 years old. The total of $17M budget is approved for 19 school districts in NJ including Palisades Park which is only town in Bergen County and is entitled to receive $823,860
• Murphy has announced the plan for free Kinder program for the entire state within a few years and this plan might be accelerated because of Biden’s “American Families Plan” with the budget of $1.8T

NYC Has Aimed for Safer Basements. Then 11 Died

(WSJ   9/15)

• Two years ago, as Mayor Bill de Blasio pushed expansive plans to create more affordable homes in New York City and his admin started an initiative to tackle one of the city’s thorniest housing problems: transforming illegal basement apartments to safe, livable spaces
• But after the city promised a program to transform the shadowy world of basement apartments, its initiative has largely foundered. Mr. de Blasio slashed the budget during the pandemic, and only eight homes are participating. The cost could be several billion dollars. Based on the findings from the programs, each conversion could cost at least $250,000 to $310,000, based on existing regulations
• In U.S, in a few places is the problem as pressing as in New York, where the number of illicit units probably far outstrips those in any other American city. There is no official count, but Mr. de Blasio estimated that there were at least 50,000 illegal units housing more than 100,000 people
• The fate of this basement program has now under increased scrutiny after the remnants of Hurricane Ida inundated the city, killing 11 people in basement homes. Nearly all those who died in the city, including a toddler and his parents, lost their lives in illegal homes in basement and cellars, often as floodwaters left them with no means to escape

44 Starbucks Stores in Manhattan have been closed since March 2020

(Korea Time 9/20)

• Among 250M sf office-space in Manhattan, the vacancy rate is 19% to $47M sf. Even though employees haven’t returned to the office while companies are paying rent
• According to NY times on 17^th, 44 Starbucks stores have been closed since March 2020

and a half of famous sandwich specialty store, Pret a Manger have been closed among

about 60 stores

• Stores in Midtown district are facing most severe difficulties due to the fact that Midtown got more offices than residentials

Google to Spend $2.1B on Manhattan Campus Acquisition

(Record / WSJ /NYT  9/22)

• Google is planning to buy New York City’s St. John’s terminal at 550 Washington St, for $2.1B, making it the anchor of its Hudson Square campus. The announcement Tuesday arrives with the city buffeted by the pandemic and most offices still largely unpopulated: one of most expensive sale of a single U.S office building since the start of the pandemic
• Google has been leasing the 12-story two-block parcel adjacent to the West Side Highway by West Street since 2018. The 1.3M sf St. John’s Terminal building will anchor its new Hudson Square campus includes 315 Hudson St and 345 Hudson St.
• The company anticipates that its investment will add another 14,000 employees in New York City and the remodeling project will be completed in the middle of 2023

SUMMIT One Vanderbilt in Manhattan, NY will open Oct 21, 2021

(Korea Time   9/16)

• 1 Vanderbilt Ave, New York: New York City’s thrilling observation deck will open Oct 21
  • start selling tickets at $39 for adults
• Summit One Vanderbilt is an immersive, four-story and 65,000 sf space near the top of the 1,401 foot-toll skyscraper featuring innovative new ways to view the city: “Air”, “Levitation”, “Ascent” and “Apres”
• https://summitov.com

Startup Companies Enter Home-Buying Fray

(WSJ 9/22)

• A buyer is worried about being rejected by cash offers in this competitive market and turn to Flyhomes Inc., which helps buyers make all-cash offers. The Seattle based start-up bought a 3 Br house in San Ramon, Cal, for $1.525M in May on the buyer’s behalf, then sold it to them at the same price a few weeks later when their mortgage closed
• A number of startups are offering programs to help level the playing field: Ribbon, Home Light inc., and Orchard, Knock,etc
• Opendoor technologies Inc, a house-flipping company that went to public on late 2020, launched a cash-offer program in March. Real-estate brokerage Redfin Corp. is piloting a cash offer program in some markets
• Cas-offer companies are paid through commissions, fees or both. In some cases, the company act as the buyer’s real estate agent or mortgage lender, and are paid through sales commissions or origination fees

U.S. needs to build over 5M new single-family houses

(Korea Daily 9/16)

• According to Realtor.com, the single house shortage is increasing through the pandemic: it was 38.4M in U.S in 2019 and it becomes 52.4M as of June 2021 which means it grew 1.4M for 2 years
• Total 12.3M households are created through marriage since 2012 while newly constructed homes provided were 7M during this time
• The reasons of new construction shortage are 1) labor force problems which has been an issue before the pandemic 2) supply chain disruption due to the pandemic, 3) raw material cost increase, 4) M gen’s conversion from rent to buying, etc

DOJ and FTC started investigation on the structure of Real Estate commission

(Korea Daily   9/22)

• One of main investigation against NAR is on the commission negotiation process. An issue is that seller can control/induce buyer agents to come up with higher price by providing higher commissions. Typical commission is about 5 – 6% paid by seller, but it is included in the selling price that buyer will be sharing the commission
• Last year total commission amount was about $85B in U.S.
• DOJ is review NAR’s regulations, policy, guide lines, etc. and also off market property transactions