Weekly News (December 7, 2022)

Mortgage Interest Rates Review

(Fairway Home Loan 12/7/2022)

Federal Fund Rate: 3.75 -4.00%        Prime Rate: 6.75-7.00%

More Zombie Buildings in Manhattan: 맨하탄 좀비 빌딩 늘어

(WSJ  12/6/22)

• According to Castle systems, recently NYC Commercial’s occupancy rate dropped to below 50%. Columbia and NYU research forecasted that commercial building prices will drop 25% till 2029.
• Meta Platform(Facebook) announced 250,000 sf reduction of office space in Hudson Yard after Meta CEO announced 11,000 worker layoff.
• KPMG announced 40% reduction of their office space while they are moving into Hudson Yard.
• Total value of commercial office building in NYC reduce $28.6B which is the first time since 2000.

Replacing Dead Malls can be a Struggle: 죽은 쇼핑 몰들을 살리기가 쉽지 않아

(WSJ  12/7/22)

• The long-decaying White Plains Mall is dead and buried, with developers, RXR, set to break ground this week on the 1st phase of a $650M project to build 860 apartment units in its place.
• There is no-shortage dying malls in the U.S., where aging shopping centers, in particular, have declined due to changing shopping habits,  e-commerce and competition form new malls.
• But converting enclosed shopping centers remains a difficult feat.
• The White Plains Mall took 2 years to obtain zoning approvals.

Rendering of White Plains Mall in White Plains

More Buy-down option in the market: 모기지 ‘바이 다운‘ 프로그램 늘어난다

(Korea Times  12/7/2022)

• In the Mortgage market, “Buy-Down” program is getting momentum fast, which seller agrees to pay the cost of lowering interests rates for first few years amid high interest rates are hindering sales.
• Most popular type of buy-down program is 2-1 buy-down : 2% lower for the first year and 1% lower for the second year.
• In San Francisco bay area, about 50% of agents said they have done transaction with buy-down programs and 46.3% in California overall.

Fed Weigh Rates Higher than 5%: 연방준비위, 기준금리를 5% 이상 까지 예상

(WSJ  12/6/22)

• The Fed have signaled plans to raise their benchmark interest rate by 0.5% point at their meeting next week, Dec 13-14, but elevated wage pressures could lead them to continue lifting it to higher levels that investors expect.
• Brisk wage growth or higher inflation in labor-intensive service sectors of the economy could lead more of them to support raising their benchmark rate next year 5% currently anticipated by investors.
• Fed officials are likely debate next week how much to raise rates in February, with views shaped by how they see underlying price pressure.

Powell favors a soft-landing: 연착륙 의지 드러낸 파월

(Korea Times  12/4/22)

• Powell said, in the Brookings Institution seminar in DC on 30th, he believes the economy can still make a soft landing, which is very reasonable.
• It is hard to declare that Inflation is ended, but it will show decline in a few months in commodity and housing market, both sale and rent.
• It could be possible that inflation can be controlled without increasing unemployment dramatically.

Investors Yank Money From Property Funds:상업용 부동산 투자자들, 환매 증가

(WSJ  12/7/2022)

• Big and small investors are lining up to pull money out of real-estate funds, the latest sign that the surge in interest rates threatens to upend the commercial-property sector.
• Blackstone Inc. last week said it would limit the amount of money investor could withdraw from its $69B flagship real-estate fund following a surge in redemption requests.
• Starwood Capital Group shortly after notified investors that it was also restricting withdrawals in a 14.6B fund.
• Typically, these funds allow investors to withdraw money each month or quarter but only up to a set limit.

Apple’s New Plan to Move beyond China: 애플사, 중국을 벗어나 다른 지역으로

(WSJ  12/3/22)

• In recent weeks, Apple Inc. has accelerated plans to shift some of its production outside China, long the dominant country in the supply chain that built the world’s most valuable company.
• It is telling suppliers to plan more actively for assembling Apple products elsewhere in Asia, particularly India and Vietnam, and looking into reduce dependence on Taiwanese assemblers led by Foxconn Technology Group.
• Coming after a year of events that weakened China’s status as a stable manufacturing center, the upheaval means Apple no longer feels comfortable having so much of its business tied up in one place.