Weekly News (July 6, 2022)

Interest Rate (26th Week)

(By Fairway Home Loan )

 Prime Rate:4.5% – 4.75%  /  Fed Fund Rate: 1.5%- 1.75%

• 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
Conforming 2 Family: $828,700/ Conforming High Balance: $1,243,050

Fire on a warehouse building in Palisades Park, NJ

(Korea Daily/Times   7/5  )

• The vacant warehouse building, owned by two Korean on 27 Fairview St got fire on 7/3/2022 and extinguished after a few hours with help of over 100 fire fighters from surrounding towns.
• C Land News Brief on 8/16/2017 reported that the PP town decided to exercise its Eminent Domain power to acquire this building and lot (2.43 Ac) for relocation project of new townhall building.
• Two owners purchased this property at the auction at $3.94M in 2008.
• In 2015, it has been listed at $7.8M on the NJMLS for 206 days.

NJ State set up $170M for lead paint remediation

(Korea Daily   7/6  )

• The budget will be spent for lead paint remediation at about 250,000 units of senior housing and apartment complex in NJ.
• About 4000 lead contamination cases are found a year and the third of them are from lead paint cases.
• There are more lead paint cases in low-income communities such as Trenton, Atlantic City, West Orange, Irvington, East Orange, etc.

Williamsburg Turns Into NYC Shopping Mecca

(WSJ    7/6 )

• A shopping boom in Brooklyn’s trendy Williamsburg neighborhood is the latest sign that remote work is helping revitalize retail real estate in NYC’s residential areas.
• More than 2 years into the Covid-19 pandemic, many of neighborhood’s affluent residents are still working from home at least part of the week and buying their clothes, food, household items and other good nearby.
• Williamsburg landlords filled 123,000 sf of net retail space during the 1st Qt this year, according to Costar, the highest level since the 3rd Qt of 2016. Asking rents, which fell when Covid-19 hit, climbed to $64/sf last Qt from $54/sf a year earlier.
• Williamsburg’s strength as a shopping destination is rooted in Brookyln’s population growth, which started to pick up stream six years ago, accelerated during the pandemic and has far outpaced the rest of the city, said Thomas Lasalvia, senior economist at Moody’s Analytics.
• Apartment construction boomed in Williamsburg in recent years, almost all of it amenity-rich, Class-A buildings, and asking rents in the neighborhood rose from an average $3,900 a month in 2018 to $4,700 this year, Mr. Lasalvia said.

If it’s a recession, it’s a Very Strange One

 (WSJ   7/5   )

• The U.S. economy has experienced 12 recessions since World War II, and one included two features: Economic output contracted and unemployment rose. During the recessions, one common denominator has been jobs. The unemployment rate has increased every time, by as little as 1.9% between 1960 and 1961 and as mush as 11.2% in 2020. The median increase in the jobless rate among all 12 post-World War II recessions was 3.5%.
• Today, something highly unusual is happening. Economic output fell in the first quarter, and signs suggest it did so again in the second. Yet the job market showed little sign of faltering during the first half of the year: Economic output is down(GDP declined), but the job market is strong. Jobless rate fell from 4% last December to 3.6% in May.
• It is the latest strange twist in the odd trajectory of the pandemic economy, and a riddle for those contemplating a recession.
• They forecast a 3.9% unemployment rate at the end of this year and a 4.6% unemployment rate at the end of 2023.
• Bruce Kasman, chief economist at J.P. Morgan, predicts a “bend-but-don’t break” scenario for the economy, meaning a sharp slowdown in activity that doesn’t crack the job market.

Office Owners Fret About Recession

(WSJ   7/6  )

• Rising interest rates and growing fears are compounding the owes office landlords grappling with the spread of remote work. An index tracking the shares of publicly traded office owners was down 29% over the first two quarters, compared with a 21% decline by the S&P 500 stock index.
• Office leasing tends to be highly dependent on the health of the economy. During recessions, companies often cut costs by laying off workers, meaning they need less space.
• If rising interest rates were to lead to mass layoffs and corporate defaults, vacancy rates could rise substantially. The combination of weak demand and rising interest rates is pushing down prices. Green Street estimates that office-building value have fallen by 8% this year.

Mortgage Rates Drop, Hover near Multiyear High

(WSJ    7/2 )

• Mortgage rates declined this week, but remain near multiyear highs, helping making it the least affordable time to purchase a home since before the financial crisis.
• In April, the median American household would have needed 41% of its income to cover mortgage payments on a median-priced home, the Fed Bank of Atlanta said in June.
• The drop in mortgage volume prompted by rising interest rates has created challenging conditions for lenders. Many that raked in record profits in 2020 and 2021 are laying off staff, selling servicing rights and otherwise trying to survive.
• Overall originations are expected to fall 40% this year, dragged down by a 69% decline in refinancing, according to the MBA.

Blackstone Bets on Global Tourism

(WSJ    7/6 )

• Blackstone Inc. is ramping up its bet on the global ravel and leisure market with a $6.3B purchase of an Austrian resort and casino operator. The investment firm closed last month on its acquisition of Crown Resorts Ltd., a company that owns gaming resorts in Perth, Melbourne, and Sydney.
• Blackstone is hoping to repeat the success it had turning around the Cosmopolitan casino and hotel on the Las Vegas Strip, the firm’s most profitable single asset deal to date. It purchased the property in 2014 for about $1.8B and spent a further $500M upgrades. Blackstone sold the Cosmopolitan last year in a deal valued it at $5.65B.

Others/Tech News: U.S.P.S stamp price increases to 60 cents from 7/10/22

• The stamp price increased to 49 cents in 2017, to 50 cents in 2018, to 55 cents in 2019, to 58 cents in 2021.