Weekly News (July 8, 2020)
This week’s Interest Rate (28th Week)
(By Fairway Asset )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||3.875||3.39|
|A month ago||2.999||2.750||3.250||0.814|
(The rate based on 25% down payment with 740 above credit score)
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
FHA and VA loan rates are getting better. Many lenders still have COVID-19 overlays. Cash Out refinance available now for primary house. High Balance Investment is still not favorable. Portfolio loans such as bank statement programs and foreign national loans still have problems closing.
Manhattan, median home price went down 18% in 2nd Qt
(The Korea Times 7/6)
- According to Elliman’s report, median price of sold property in Manhattan was $1M which shows 17.7% decrease from a year ago and the biggest drop in 10 years.
- Sales has been decreased 54% from a year ago which shows the biggest drop in 30 years.
- NYT reported that depressed potential buyer’s demand due to shut down will be released in 3rd Qt as reopening has begun in NYC.
Re-development project, Empire Station Complex will be launched
( The Korea Daily 7/7)
- NY ESD and Vornado Realty Trust announced “Empire Station Complex” project to re-develop the Penn Station and the surrounding area. The Penn Station will be renovated and expanded 40% in order to handle much more than current 650,000 daily passengers. The improvement will include brighter lightings, bigger waiting lounge area, easy moving line, wider platform, etc.
- 14M sf office buildings in 8 neighboring lots, 1300 room hotel, and 800K sf retail commercial buildings will be built with this project.
- This project will be connected with Hudson Yard(8M sf office space), Macy’s re-development project(1.5M sf office space) neighboring Koreatown and will make the Midtown area truly prominent business district in Manhattan after completing in 10 years.
- ESD will organize a meeting with MTA and neighboring building owners on 7/20.
Manhattan Office lease decreased sharply
(The Korea Daily 7/3)
- According to Colliers International, total leased space in Manhattan for 2nd Qt was 3.18M sf which shows 72% drop from a year ago.
- Currently there are 526M sf total available spaces in Manhattan. The level of 3M sf lease contract per quarter is the lowest after 3.07M sf was leased in 2nd Qt, 2009.
- In general, Manhattan office spaces are shared by 37% for financial and real estate companies, 22% for IT, Advertisement, and media companies, and 15% for government and public buildings.
- Also Collier International reported that sales of office buildings were decreased substantially to 416 sales from 682 sales last year. Sales price for the first 6 months of this year is also decreased to $656/sf from $919/sf for the same period of last year, which is 29% drop.
- Office rent price was dropped only 0.2% to $79/sf which is not the worst case, but rent is forecasted to drop about 30% for next 1 -2 years in the future.
25% of Super shopping malls might be closed in 5 years due to COVID-19
(The Korea Daily 7/8)
- According to NYT on 7/5, as department stores are in trouble, many shopping malls also will be in distress because most shopping malls have department stores as anchor tenants. Average occupancy rate of department store in a mall is 30%.
- Each community who has super shopping mall is in dilemma on what can be the future use of the spaces, which means re-development is unavoidable, converting to traditional market, office spaces, rental units, and entertainment facilities.
PPP application will be extended till August
(The Korea Times 7/6)
- President Trump has signed on PPP extension on 7/4 till 8/8/2020.
- So far, $520B PPP loan has been provided to about 5M companies and still $130B is available with SBA.
- The original program was ended 6/30 and extended 5 weeks.
ICE may cancel Foreign student visa (F-1) if school provides online classes only
(The Korea Daily/NYT 7/8)
- S. Immigration and Customs Enforcement published new guideline for F-1, M-1 visa that the visa may be cancelled if school provides only online classes.
- Many foreign students may have to leave US and go back to their countries if Coronavirus does not curtail and, therefore if schools do not open regular classes in Fall.
- A survey from 1090 colleges in US reported that 60% of colleges have plan to provide face-to-face classes, 24% will provide both on and off line classes, 9% will provide only online classes, 7% undecided. (Ex: NYU had about 20,000 international students last academic year)
- NYT reported that President Trump presses schools to open.
Key findings on COVID-19’s early economic impact researched by Harvard’s HPS
(The JCFHS of Harvard 7/1)
- Minority, renter, low-income households, and households without a college education were far more likely to lose employment income. (Hispanic:58%, Black:53%, White:39%, Asian/other:44%). More than half of renter households (54%), and half of households earning under $25,000, or with only high school diploma reported a decline in income
- Millions of better-off households were also affected. (Over one-third households earning at least $100,000 and one-third of college graduated faced a decline in income)
- Households unable to make housing payments were also more likely to face food insufficiency ( Renters(15%) were more likely that homeowners (7%) to struggle making their payment in the prior month)
- Among households who lost employment income since mid-March, the share working has increased over time.
- For Americans who lost income and were not working, most cite pandemic-related reasons.(28% said they weren’t working due to furlough or some other pandemic-related reduction in business. 22% reported temporary closures of their employment. 15% reported layoffs due to pandemic).
Others/Tech News : Uber Technology purchased “Postmates” at $2.65B
Combining with Uber Eats, Uber takes 2nd position in US for food delivery biz. Due to COVID-19, Uber’s revenue dropped 80%, but Uber Eats’s revenue increased 50%.