Weekly News (December 7, 2022)
Mortgage Interest Rates Review
(Fairway Home Loan 12/7/2022)
|30 yr fx (%)||15 yr fx (%)||FHA (%)||10 yr Tr Y (%)||5 yr Arm (%)||
7 yr Arm (%)
A year ago
|A month ago||6.875||5.875||6.375||4.075||6.875||
Federal Fund Rate: 3.75 -4.00% Prime Rate: 6.75-7.00%
More Zombie Buildings in Manhattan: 맨하탄 좀비 빌딩 늘어
- 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
- 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
- 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
- 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
- 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.