Weekly News (June 10, 2020)
This week’s Interest Rate (24th Week)
(Fairway Asset )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||3.875||3.39|
|A month ago||3.25||2.77|
(The rate based on 25% down payment with 740 above credit score)
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
New Jersey lifted Stay-at-home order as of 6/9
(The Record/The Korea Daily/ The Korea Times 6/10)
- After 80 days since stay-at-home order has been issued on 3/21/2020 due to COVID-91, New Jersey lifted the order. Social distancing and wearing masks are still required.
- What is allowed: outdoor gathering up to 100. Indoor gathering up to 25% of a capacity or 50 people, whichever is lower. Workers can return to offices, but the decision is up to employers.
- What is not allowed: Indoor dining. Public sports events, any business that was closed before the gathering limit was imposed will remain closed.
- School graduation ceremony up to 500 people will be allowed from 7/6.
- 6/22 re-opening for personal care business such as hair salon and barber shop will include nail salon, the Governor announced. Tattoo business is still in question.
Palisades Park, NJ will exempt the application fee for out door dining permit
(The Korea Daily 6/10)
- The town allows outdoor dinning with conditions: 6 feet between tables, max 8 people per table, minimum 4 ft from the roads and all employees must wear masks and gloves.
- All customers must wear masks except time for eating food.
Nearby New York City enjoys booming in rental market
(The Korea Daily 6/6)
- Due to COVID-19, “Exit out of NYC” phenomena appear in the suburban area of NYC such as Hampton, Long Island, Hudson Valley area, Northern New Jersey residential area. These area are about 1 hour diving distance away from NYC.
- Along with low inventory in the market, this phenomena will keep the home price and rent high for a while. After the 9/11 terror, similar price increasing situation in NYC suburban area kept for about 3 years.
Landlords sue Big Retail as missed rent payments pile up
(TRD/Jason Shim 6/9)
- Before the coronavirus, retailers like H&M and Urban Outfitters were the kinds of companies that landlords targeted, “credit-worthy” tenants
- Now, as a number of those formerly blue-chip businesses have continued to withhold their monthly payments even after stay-at-home orders lifted, a growing number of landlords have been taking them to court.
- Albert Laboz of United American Land sued H&M last week for not paying rent at his Downtown Brooklyn space.
- The Gap is the largest in-line tenant for the country’s largest mall operator, Simon Property Group, which sued the retailer last week for $66 million in unpaid rent across its properties.
- Last month, there were 15 national retailers that didn’t pay any May rent, according to a report by Datex Property Solutions. They include Bed Bath & Beyond, H&M, Century City, AMC Theaters, Regal Cinemas, Party City and The Gap.
- 24 Hour Fitness, AMC Theaters and Pier One Imports, have either announced potential bankruptcy or plans to liquidate assets.
Amazon takes over Bronx warehouse once home to rival Jet.com
(TRD/ Jason Shim 6/9)
- Amazon has leased a 200,000-square-foot warehouse in the Bronx that was previously used by its rival Jet.com:1055 Bronx River Avenue along the Bruckner Expressway in Soundview.
- com previously leased the building, but the company, which is owned by Walmart, stopped working in it last year after giving up on its effort to break into the city’s grocery delivery business. Walmart abandoned the Jet.com brand last month, saying the company had done its job by augmenting Walmart’s online business.
RE Market is recovering already?
(The Korea Daily 6/9)
- According to WSJ report, nationwide new construction sales is increased 21% from a year ago, which is a meaningful indication. RE industry says buyer demand is getting momentum recently due to weakening self-quarantine, re-opening businesses, and historically low interest rates. Also potential buyers who could not shop around in the spring this year has started shopping.
- Mortgage application also has been increased for last 7 weeks: this week application is increased 5.3% from a week ago, and 17% from a years ago.
US Economy entered into recession in Feb, 202
(The Korea Daily 6/9)
- NBER(National Bureau of Economic Research) has announced US has entered into the recession cycle(contraction) in February due to COVID-19 after 125 month expansion. This means the expansion cycle of more than 10 years since 2009 subprime financial crisis has been ended.
- Earlier, BOA has announced the recession in US in Mar, 2020.
- A recession is a macroeconomic term and typically recognized as two consecutive quarters of economic decline, as reflected by GDP.
2nd Half of US Economy is expected to increase 20%
(The Korea Daily 6/4)
- KOCHAM Seminar on Forecast on US economy and finance under the COVID-19 was held on 6/2 via Zoom.
- 1st Half US Economy was dropped 20%, but it will be bounced back 20% in the 2nd half of this year because of re-opening businesses and financial support from government.
- In order to recover completely back to pre-coronavirus era, it will take some time and reach to 5% lower at the end of 2020 and 4% lower at the end of 2021 than pre-coronavirus era.
- The contributing factors of slow recovery are 1) Restriction of economy activities and business entity’s caution attitude 2) Limited future investment due to abrupt income reduction during 1st half 3) Difficulty to layout middle and long term
Investors are waiting for the distressed properties in the market
(The Korea Daily 6/6)
- According to the mortgage broker, EN Capital, those distressed properties will appear on the market toward the end of summer if the coronavirus vaccine is not developed.
- He mentioned there will be ripple effect in the RE market because UI rate will be about 20% in the near future, and holding notes for distressed commercial buildings such as retail buildings, hotel, motel will lead to attractive profits.
Other/Tech News : AMC reported the net loss of $2.2B for the 1st Qt
AMC has about 1000 theaters with about 11,000 screens worldwide.
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