Weekly News (January 19, 2022)
Interest Rate (3rd Week)
(By Fairway Home Loan )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||2.625||2.290||2.490||1.092|
|A month ago||3.125||2.375||2.750||1.487|
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
- 3% Down payment for 1st 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.
- Self employed borrower – Need to prepare 3 month business bank statements and the YTD Profit and Loss Statement. YTD income can’t decline more than 30% compared to last year.
- 2022 Conventional loan limit: Conforming SFR : $647,200.00/ Conforming high balance: $970,800.00 / Confirming 2 Family: $828,700/ Conforming High Balance: $1,243,050
Towns in New Jersey keeps increasing in 2022
(Korea Times 1/19 )
- The average NJ property tax is $9,266 which is up about 2% or $154.00, compared to the last year. The most Korean populated towns have shown significant increase: Edgewater increased to $10,792 which is up 16.5% from the last year and it is the first time to go over $10,000. Paramus increased 6.1% to $10,596 which is also the first time to go over $10,000.
- Leonia and Ridgefield have increased the tax 3.8% and 2.7% respectively while Palisades Park and Fort Lee have kept 1.6% and 1.5% increases respectively.
- It is noticeable that Englewood Cliffs and Old Tappan have decreased their taxes 2.2% and 2.7% respectively.
- Still Tenafly shows the highest tax in Bergen County which is $21,966.
Manhattan Rent is recovered to pre-pandemic level
(Korea Daily 1/14 )
- According to Douglas Elliman, the median rent in Dec 2021 was $3,392 which is up 21.1% compared to a year ago and which is higher than Dec 2019 before the pandemic outbreaks.
- The numbers of units available in the rental market is 4,753 which is down 80.8% from 24,794 in Dec 2021.
- Also rent went up in Queens as well: the median rent in Dec 2021 was $2,715 which is higher than Dec 2019. Especially in NW area in Queens, the available rental units were 614 which is down 74.8% from 2,435 units available a year ago.
- According to the Census, among 3.4M residential units (house, apartment, condo/coop) in NYC, 850,000 units are in Manhattan, and 60% of units in Manhattan is rental complexes.
Office Rents Get a Boost On Freebies
(WSJ 1/19 )
- The recent recovery of U.S. office rents owns much of its success to something landlords hate to discuss: all the freebies, cash gifts and other incentives they have to fork over to tenants.
- Office-lease incentives used to be far smaller. That changed when private-equity firms became dominant in the commercial real-estate market after 2008 financial crises. Unlikely many other owners who hold buildings for the long term, private-equity firms often own buildings for just a few years before selling them for a profit. That profit partly depends on the building’s rent roll: the more the buildings tenants pay in annual rent, the more it will sell for. To push rents – and by extension, building values – higher as quickly as possible, private-equity firms started offering tenants more incentives.
- It went through the industry like wildfire: such as Blackstone offers $100 in T.I. Eventually other landlords started copying the private-equity firms.
Blackstone Property Fund Passes $50B through BREIT
( WSJ 1/19 )
- The largest fund administered by Blackstone Group Inc., the giant investment firm known for raising capital from institutions such as pension funds and endowments, is now one that mostly targets individual investors.
- Blackstone Real Estate Income Trust, a fund sold in increments as little as $2,500, has raised more than $50B since it started five years ago. The firm has used the fund, known as BREIT, to buy rental apartment buildings, warehouses, office buildings, casinos and other property types.
- BREIT has lured investors partly by paying them an annual yield of 4% to 5%, far more than government bonds in recent years. Also BREIT has loaded up on properties that have enjoyed rising values in recent years, such as warehouses and rental apartments, even as the pandemic has raged.
- The combination of yield and rising property value produced an average annual return of 15.2% for the three years that ended Dec.31, according to Robert A. Stranger & Co., an investment-banking firm that tracks the nontraded REIT market.
Higher Bond Yields Batter Stocks
(WSJ 1/19 )
- Stock index fell Tuesday and bond yields hit two-year highs as investors fretted over whether the Fed raise interest rates more quickly and aggressively than expected.
- The S&P 500 slid 85.74 points, or 1.8%, to 4577.1, and the Dow Jones Industrial Average shed 543.34 points, or 1.5%, to 35368.47, its biggest one-day decline since November. Nasdaq Composite retreated 386.86 points, or 2.6%, to 14506.90.
- Meanwhile, the yield on the benchmark 10-year Treasury note ticked up to 1.866% — its highest level in two years – from 1.771% Friday.
- “The uncertainty around the timing and pace of the Fed’s action will likely keep markets on edge for the first half of the year,” Ross Mayfield, an investment strategy analyst at Baird Private Wealth Management, wrote. He added that market turbulence has been most acute across growth stocks, which have had their worst start to a year relative to value stocks since 1995.
Economists Cut Back Growth Forecasts as Threats Pile Up
(WSJ 1/18 )
- The outlook for economic growth in the first Qt and 2022 is darkening amid the latest waves of Covid-19, as consumers grapple with high inflation and businesses juggle labor and production disruptions.
- Forecasters surveyed by WSJ this month slashes their expectation for growth in the first Qt by more than a percentage point, to a 3% annual rate from their forecast of 4.2% in the October survey.
- The economy faces a delicate balancing act this winter, economists say, as rapid spread of the Omicron variant threatens to dent consumer spending and exacerbate labor and supply-chain shortages as workers call out sick.
- Spiraling inflation could force the central banks to aggressively raise short-term interest rates, risking a recession. The Fed cut rates to near zero and started buying bonds to lower long-term rates in 2020 as the corona virus pandemic hit the U.S. economy, triggering financial-market volatility and a deep, short recession.
- More than half of economists expect supply-chain disruptions to persist at least until the second half of this year, with a third expecting them to continue until 2023 or later.
Consumer Prices Rise by 7% as pandemic disruptions, consumer demand stay strong
(WSJ 1/13 )
- S. inflation hit its fastest pace in nearly four decades last year as pandemic-related supply and demand imbalances, along with stimulus intended to shore up the economy, pushed prices up at a 7% annual rate.
- The Labor Department Wednesday the consume-price index – which measures what consumers pay for goods and services – rose 7% in December from the same month a year earlier, up from 6.8% in November. That was the fastest since June 1982 and marked the third straight month in which inflation exceeded 6%.
- Today, the inflation rate is on the rise. Back then, it was falling. It had peaked at 14.8% in 1980, while Jimmy Carter was still president and the Iranian revolution had pushed up oil prices. Core inflation that year reached to 13.6%.
- Upon becoming Fed chair in 1979, Paul Volker set out to crash inflation with tight monetary policy. IN combination with credit controls, that effort pushed the U.S. into a brief recession in 1980. Then as Fed’s benchmark interest rate reached to 19% in 1981, a much deeper recession began. By the summer of 1982, inflation and interest rates were both falling sharply. Four decades of generally low-single digit inflation would follow.
Microsoft buys “Activision Blizzard” for nearly $70B
(Record/WSJ 1/19 )
- Microsoft is paying nearly $70B for Activision Blizzard, the make of “Candy Crush” and “Call of Duty” as it seeks an edge in the fiercely competitive businesses of mobile gaming and virtual-reality technology.
- The al-cash $68.7B deal will turn Microsoft, maker of the Xbox gaming system, into one of world’s largest video game companies and help it compete with tech rival such as Meta, formerly Facebook, in creating immersive virtual worlds for work and play.
Others/Tech News: iPhone can be a car key?
- Bloomberg reported that some HyunDai brabds and Genesis might use iPhone digital car App to open car and start engine within this this year.