Weekly News (July 21, 2021)

This week’s Interest Rate (29th Week)

(By Fairway Home Loan )

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

• 10 Yr Bond went down to 1.19% due to the Delta Variant.
• 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

2nd Qt Queens (NY) home price rose 12%

(Korean Times   7/16)

• According to Elliman’s report, 2nd Qt median price in Queens, NY was $680,000 which rose 12% compared to a year ago same period while it was 3.0% up from the previous Qt.
• Sales rose 118.4% to 3,517 while it was 1,610 at the same Qt last year while it was 7.2% up from the previous Qt.
• The median price at NE area of Queens where most Korean population gathered such as Flushing, College point, Whitestone, Bayside, Douglaston, Little neck, Oakland Garden, Beech Hurst, etc rose 0.9% to $733,650 while it was $727,087 a year ago same period while it was 0.7% down compared to the previous Qt.  Sales rose 138.3% to 872 while it was 366 a year ago same period.
• The condo median price in LIC rose 4.5% to $941,917 and new construction single family house median price rose 5.9% to $894,461.

Wall Street Banks’ Workers Going back to the Office

(Korea Daily/Times  7/19)

• Wall Street big banks ordered workers come back to the office as vaccination rates are increasing and new positives declined.  Wells Fargo will begin working at the office right after the Labor Day holiday.  Goldman Sacks started ordering workers come back to the office since last June and 50% of workers now work at the office.  HQ office in NYC provides food trucks and London office provides free ice cream to workers.
• JPMorgan Chase started working in rotation so that total number of workers does not exceed 50% from July.  Citigroup also allow 2 days’ work from home a week and they have to come to office the rest of the days in a week.

Mortgage Re-Fi additional fee of 0.5% will be dropped from August

(Korea Daily 7/21 )

• Additional 0.5% fee for re-financing program which was applied from Dec 2020 will be deleted from August 2021.  Deleting 0.5% fee will be same effect of reducing interest rate of 0.125%.
• Due to the unprecedented Pandemic, Freddie Mac and Fannie Mae have requested the additional fee in order to prevent potential loss of funds.

Big Landlord to Scoop Up More Houses

(WSJ   7/21 )

• One of America’s biggest landlords is teaming up with an insurance company, a global investment company and a Texas pension fund to buy $5B of U.S. houses to turn rentals.
• Tricon Residential Inc., a Toronto company that operates one of the largest pools of U.S. rental homes, said it has struck a house-buying pact with the Teacher Retirement System of Texas, Pacific Life Insurance Co. and one of the company’s existing foreign investors, which it declined to name.
• The parties will together contribute up to $1.55B in cash, which will be combined with debt to give the venture purchasing power of about $5B.
• Tricon, which operates about 25,000 U.S. rental homes as well as several apartment complexes in the U.S. and Canada, said it expects to be able to buy about 18,000 houses through the new venture.  The deal suggests that signs of a slowdown in the red-hot residential real-estate market haven’t diminished the allure of rental homes among big investors, who have become major forces in many of the country’s hottest markets.  Tricon expects to buy about 6,000 homes annually for the next three years, including new construction homes.

Real Estate Startups Move Into Flexible Homes

(QSJ   7/21)

• Investors are pumping money into real estate startups that are pioneering flexible ways to rent apartments on the belief that remote-working trends and new forms of housing demand will remain long after the pandemic is over.
• Startups like Sonder Corp. and Mint House Inc. were founded in the years of leading up to pandemic, offering short term, fully furnished apartment that could be booked almost as easily as hotel rooms on the Internet.  They have gotten a boost from the pandemic because of large number of young professionals who left downtown while the health crisis was the most acute.
• The company, Daydream Apartments manages a network of 3000 apartments in 7 U.S. markets including LA, Austin, and Seattle.  The company is rolling out technology allowing tenants to book any length of stay.
• The company and its backers are betting the flexible-living trend is the future of consumer preference and will persist as companies call employees back to the office.
• Some opponents of the idea said “I am skeptical about short term, flexible lease options gaining meaningful momentum once employees are required to get back to office at least one day a week”.
• Traditional apartment landlords often shy away from the short term rental model because its higher renter turnover rate leads to higher costs.

U.S. 2nd Qt Economy growth might reach to 9.1%

(Korea Times  7/21)

• According to WSJ on 7/18, U.S. 2nd Qt growth will reach to 9.1% and 3rd Qt forecasted to 7%, and it will drop to 3.3% next year.  Yearly growth rate will be 6.9% this year and 3.2% next year.
• As reported last week, CPI in June hit 5.4% while it was 5% in May which was over than experts’ forecast of 4.9%.

Coronavirus Cases Rise in Every State in U.S

(WSJ  7/20)

• Covid-19 cases and hospitalizations across the U.S. are growing steadily higher as the infectious Delta variant takes hold and the pace of vaccination subsides from highs reached in April.
• The country has reported an average of 32,287 new coronavirus cases each day over the past week, according to a WSJ analysis of Johns Hopkins data, more than double what the seven day average was 10 days ago.
• Coronavirus-related hospitalizations have also jumped, rising 35.8% between July 7 and July 13 compared with the previous 7 days according to CDC.
• While the latest U.S. Covid-19 metrics are still far lower than peaks reached early this year, they have raised concern among public health officials, epidemiologists and investors. U.S. stocks, oil prices and bond yields all fell Monday.
• About 48% of the U.S. population is fully vaccinated against the coronavirus, according to CDC, and more than 55% have received at least one dose.  But vaccination rates vary by age group and region. Some 38% of people age 18 to 29 have received at least one vaccine dose, the lowest rate among any group eligible to get immunized.  The elderly had the highest vaccination rate, at 80%, the report found.

(Korea Daily 7/21)

• NJ vaccination effect is 99.9%: among vaccinated people of 4,432,769, the positives were 84 and death toll was 31.

Bezos Trip To Space Launches a Business

(WSJ   7/21)

• Jeff Bezos (57) and 3 passengers reached the edge of space and safely returned Tuesday morning after a flight of just over 10 minutes that billionaire businessman hopes will kickstart an expansive new era for human space travel.
• The Amazon.com Inc. founder and his fellow passengers were launched at 9:12am ET to the edge of space from a remote West Texas site and enjoyed a few minutes of weightlessness aboard the rocket-powered New Shepard spacecraft developed by his company Blue Origin LLC.
• Bezos founded Blue Origin in 2000 and began acquiring land in Texas to build the private facility used for Tuesday’s launch.  The company hired staffers to develop rockets, engines and spacecraft and now employs more than 3,500 people at Facilities at Florida, California, and other locations.
• On July 11, Virgin Galactic Holdings founder Richard Branson traveled with five others about 54 miles up in a company spacecraft, a flight meant to help spur tourism in space.
• Later this year, Elon Musk’s SpaceX plans to take four commercial passengers into orbit on one of the company’s Crew Dragon capsules. SpaceX also has been completing launches for commercial customers and government agencies.

Others/Tech News: HyunDai Motors will join UAM (Urban Air Mobility) war

• After EV market, future market is on UAM → $1.7T market in 2040.
• eVTOL technology: electric Vertical Take Off and Landing.
• HyunDai joint-ventured with Uber and announced a concept model (S-A1) in Las Vegas CES 2020.
• Han Hwa and Korean Air Line will join the UAM race.