Weekly News (March 2, 2022)
Interest Rate (9th Week)
(By Fairway Home Loan )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||2.750||2.375||2.375||1.291|
|A month ago||3.750||2.875||3.375||1.841|
Prime Rate:3.0% / Ref IR: 0.00- 0.25% .
- 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
Palisades Park, NJ Police Department is in Crisis
( Korea Daily 2/24 )
- The police Sgt. Samuel Kim sued the police Capt. Shawn Lee for harassment a few years ago and Shawn Lee had to pay compensatory damages.
- This year police Sgt. George Beck sued Capt. Shawn Lee, acting Police chief for unfair treatment in the police department and George Beck received $120,000 as compensatory damages from the town.
- Recently, George Beck’s brother Christopher Beck and Anthony Espino are in the process of suing Shawn Lee again and the town residents are concerned about the legal fees. They are preparing two suits and targeting Shawn Lee and councilman Vietri for blocking internal investigation, abuse of police chief’s power, assigning old car unfairly, and unfair job assignment, etc.
- Due to chaotic and instable control of police power, some are suggesting Bergen County sheriff department or County prosecutor office take over the town police department.
Marihuana Farm in Ridgefield is under debate
( Korea Times 2/25 )
- Ridgefield Town Council is in the process of approving the marihuana farm project in the town between Edgewater Ave and Church street ( 500 Church Street) by converting the current D Zone(Commercial/Office) to L Zone(Light Industry).
- Former councilman Denis Shim strongly opposes the project concerning children’s more exposure to potential criminal activities.
( Record 3/2 )
- Mahwah township Planning Board voted 5-3 that an ordinance proposing to allow a cannabis retail store on Rt 17 was inconsistent with its master plan.
- The overarching concern was that the proposed location of the store at 231 Rt 17 North is within 400 feet of two nursery schools and a house of worship. Also the proposed location at the Ramapo Ave exit is within 400 feet of the Mahwah High School campus.
Big Investors push Captive Market in residential market
( Korea Daily 2/28 )
- S. Senate is concerned on the residential market become a captive market by big investors: consumers are facing a severely limited number of competitive suppliers. Their choices are to purchase what is left or to make no purchase at all.
- While real demand buyers are priced out in the market, big investors are purchasing SFR massively using their financial capability.
- Blackstone recently bought Home Partners of America who owns 17,000 SFR at $6B and entered into residential rental market. Also the company invested $240M to a Canada base company who are buying SFR.
- Other big investors including JP Morgan have invested to SFR rental companies.
- Total investment to SFR construction reached to $30B to be used to build about 100,000 rental SFR, not for sale house. They are forecasting ROI of 8% with risk factors adjusted.
Demand for Lab Building Soars
( WSJ 3/2 )
- The rapid growth of life-science research during the pandemic is triggering a record boom on the development of new lab space and offices serving these companies.
- Development of buildings geared toward biotechnology, pharmaceutical and other laboratory firms was on the rise before 2020. But demand for this space intensified as billions of dollars poured into research and development of Covid-19 vaccine and other therapies for the virus.
- Oxford Properties Group is making its first investment in Philadelphia, to develop up to 3M sf for more than $3B in a former Navy yard.
- Ensemble Real Estate Investments and Mosaic Development Partners is breaking ground on its first building in a few weeks. Ivanhoe Cambridge is planning this spring to break ground on their first project, a 320,000 sf building at 60 Guest Street in Boston.
- Life-sciences development isn’t risk free. The buildings are more expensive than regular office buildings because they need special systems for ventilation, cooling and moving equipment. Also the conversion to life-science buildings only works in some location in a handful if cities with thriving life-science ecosystems.
( Korea Daily 3/2 )
- The $700M life-science building “Taystee Lab Building” is completed in West Harlem, Manhattan. The 11 story building at 450 W 126th St provides 350,000 sf with 20,000 sf outdoor space.
Home prices and mortgage rates are on the rise this year
( Korea Times 3/2 )
- Even though home mortgage interest rates in on the rise, still home prices also moving up this year. DLB Financial Service CEO said the residential market is not a bubble and this is a reality.
- Most economists still advise that this is a good time to buy even though home prices are high, if you need a house and if you can.
- It is still perfect time to buy investment properties and to do re-financing, real estate experts said.
Various First Home Buyer Assistant Programs
( Korea Daily 2/28 )
- The biggest burden for First Home Buyer is down payment of 20% of a conventional mortgage.
- Conventional Loans: 3% of conventional down payment program is available: “Conventional 97 Mortgage” is Fannie Mae/Freddie Mac backed program with 620 credit score.
- Fannie Mae’s “Home Ready” mortgage and Freddie Mac’s “Home Possible Mortgage” provide similar program with 3% down payment.
- Government Loans: FHAA mortgage requires 580 credit score and 3.5% down payment and minimum 500 with 10% down payment. Borrowers need to pay FHA insurance fee and 1.75% annual fee.
- USDA provides 100% loan for purchasing rural area homes, not only farms.
- Down payment Assistance: National Homebuyer Fund operates the down payment grant program for the households under 80% of AMI. nhfloan.org They supported $387.7M to 45,500 households for the last 20 years.
- Bank of America Grant program and Chase Homebuyer Grant also are available for down payment grant.
Stocks Fall Further as Oil Tops $100 with Russian’s Invasion
( WSJ 3/2 )
- S. stock index fell and bond yields slipped Tuesday, while oil prices rose to multi-year highs, as Russia’s invasion of Ukraine continued to whipsaw through markets. Stock markets have been battered in 2022, with the S&P and Nasdaq both posting their worst two-month stretches since March 2020 to start the year.
- The war in Ukraine has further soured investors’ sentiment: Though only 1% of S&P companies’ revenue stems from Russia, investors are still worried about ripple effects on the global economy.
- Russian markets have been dealt a blow by the invasion and ensuing sanction, with investors jettisoning Russian stocks. A sharp, sudden interest rates rise from the nation’s central bank helped send the ruble tumbling. Tradeweb Markets Inc., a bond-trading platform, removed Russian securities Tuesday, citing Western sanctions.
Supply Issues Made Worse by Warfare in Ukraine
( NYT 3/2 )
- Russian invasion of Ukraine has rattled global supply chains that are still in disarray from the pandemic, adding to surging costs, prolonged deliveries and other challenges from companies trying to move goods around the world.
- Ukraine is a large country at the nexus of Europe and Asia, has caused some flights to be cancelled or rerouted, putting pressure on cargo capacity and raising concerns about further supply chain disruptions.
- The conflict is also setting off a scramble among global companies as they cut off trade with Russia to comply with most far-reaching sanctions imposed on a major economic power since the end of the Cold War.
- Western Europe and Russia have imposed reciprocal flight bans, bringing ravel between the two regions to a halt.
This is C Land News Brief