Weekly News (January 4, 2023)

Mortgage Interest Rates Review

(Fairway Asset Corp. 1/4/2023)

NYC tourism increased sharply: 뉴욕시 관광객 폭발적 증가세

(Korea Daily  12/22/22)

• Tourists in NYC reached to 56.4M which is up 71% from the last year(2021). Domestic tourists were 47.4M while foreign tourists were 8.9M.
• It was 85% level of 66.3M in 2019 which was a pre-pandemic era.
• Increase of tourists triggers hotel business booming: 32M rooms were sold in 2022 which was 96% level of 2019.  The room price hit $400/night at the 2nd week of Dec which was 124% level of the same period of 2019.
• NYC is preparing the 50th anniversary of HipHop birth and FIFA’s World Cup in 2026 which will boost more tourists.

China losing its position of “the Factory of the World”:  “세계의 공장” 지위 잃는 중국

(Korea Times  12/29/2022)

• The conflict between U.S. and China, and influence by COVID-19 make other countries in Asia to get into competition in manufacturing facilities against China.
• The Insider, economic news media reported on 27th that India, Vietnam, Thailand, Malaysia, and Bangladesh are putting efforts in this competition.  Also it said China started losing it position as the “factory of the world” from the Trump era when he started the trade war between two countries.
• Apple moved or is in the process of moving its iPhone, iPad factory to India and Vietnam. Nike, Adidas, SamSung moved their facilities in Vietnam. Sony and Sharp are planning to move their factories to Thailand. Bangladesh becomes the 2nd largest garment export country worldwide.

Apartment Rent’s Growth Slows Down:   아파트 렌트비 상승 멈춤세     

(WSJ  1/4/23)

• The pandemic boom for multifamily building owners is fading fast going into 2023.
• The biggest wave of new rental buildings in nearly four decades is  expected to cut the pace of rent growth across the country. Some in-demand Sunbelt cities are already experiencing rent declines in part because many tenants searching for apartment feel that cannot devote any more of income to rent.
• Meantime, nearly half of million new apartment units – the most of any year since 1986 – are expected to complete construction y the end of 2023.

Median rent & New Construction

Residential Sales & Prices drop, but no crash: 거래감소, 가격하락 지속, 붕괴는 아니야

(Korea Times   1/2/23)

• Lawrence Yun chief economist at NAR said residential sales will decline, but potential market crash will have little chance in 2023. For some area they may have booming.
• Sales may decline 6.8% from the last year at 5.13M homes. Median price may rose 0.3% to $385,800. Mortgage rates may stay around 5.7% which influence the market positively.  The areas of which home price may go up are Atlanta in GA, Raleigh in NC, Dallas in TX, etc.
• The reason of price increase is rental market which is soaring – 7% up in 2022 and 5% up in 2023.

Higher Rates Threaten U.S. Renovation Boom: 높은 이자률로 영향받는 주택 개조 성황

(WSJ   12/30/2022)

• Higher interest rates have slowed home sales. Now rising borrowing costs threaten to put the brakes on the renovation boom.
• Swooning stocks and declining home prices tend to make people feel less affluent and hesitant to pump money into their property.
• Americans extracted $248B from their homes last year with cash-out refinancings, essentially swapping out existing mortgages for loans with higher balances and pocketing the difference. Cash-outs dried up this year as interest rates rose, with volume in November down 81% from January.

Pace of Layoffs Picks up Speed in Tech Sector: 기술회사들, 감원바람 본격화

(WSJ   1/4/23)

• Technology-driven companies across the industries have been laying off workers at the fastest pace since the COVID-19 pandemic shocked the global economy in 2020.
• The hiring has picked up during the pandemic as individuals and companies leaned on technology to help get through lockdowns and other Covid-related disruptions.
• Now, the same businesses are laying off employees, implementing hiring freezes and cutting costs, as spending on tech products slows and the outlook for digital advertising dims.

Estimated tech layoffs by year

BREIT to get $4B Boost from Univ. of California: 캘리포니아 대학, 블랙스톤REIT에 $4B 투자  

(WSJ  1/4/23)

• The University of California is putting $4B into a Blackstone Inc. real- estate vehicle aimed at individual investors, providing crucial ballast for a fund that has been beset by a wave of redemptions.
• The typical BREIT investor has the option to sell shares monthly, but University of California manager UC Investments will effectively be committing to hold its shares for six years.
• Blackstone President Jonathan Gray said the investment came about as a result of a TV interview he did about BREIT on Dec. 8. After UC Investments deal, BREIT will have about $14B in liquidity.

Big Tech Stocks Fall From Glory: 미 대기업 주가 추락세  

(WSJ  1/3/23)

• The year 2022 turned many of the stock market’s former darlings into duds. Meta plunged 64% in 2022; Netflix declined 51%; the other three stocks dropped at least 27%. Together, the FAANG stocks shed more than $3 trillion in market value, helping drag the broader stock market down with them. The S& P 500 sank 19%, its worst year since the 2008 financial crisis.
• When interest rates were near zero, investors were more willing to pay up for growth stocks and risky assets in their search for higher returns. But with the Fed raising rates at the fastest pace since the 1980s, the market environment has turned to favor investments that generate cash for the holder now.