Weekly News (May 11, 2022)

Interest Rate (19th Week)

(By Fairway Home Loan )

   Prime Rate:3.75 – 4.00%  /  Fed Fund Rate: 0.75- 1.00% .

• 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 replaces head officer with captain suing town

(  Record  5/11  )

• The leadership of the police department changed on Tuesday(5/10) when Capt. Anthony Espino who is currently suing the town, stepped into the office-in-charge role previously held by Capt. Shawn Lee – whom he is also suing.
• Espino filed a lawsuit in March against the borough and Lee, alleging that ”Lee continues to use his position of power in an illegal, tyrannical, abusive, and disgraceful manner, which [the borough] has and continued to ignore with purposeful and/or deliberate indifference.”
• George Beck filed a lawsuit claiming that his disturbing experiences with Lee began in 2016, and that he has been targeted for harassment and abusive behavior since then, culminating when he was issued a written reprimand this year.
• Beck’s brother, Sgt. Christopher Beck, recently filed a tort notice against the borough, Lee, and Councilman Michael Vietri, former police director and chief of the department. ( A tort notice is a required first step before someone can file a lawsuit against a public entity.)
• Lee served a five-day unpaid suspension in 2020 and was ordered to attend anger management classes, attend harassment training classes and undergo psychological evaluation for fitness of duty.

 Time Square Plots New-Look Comeback

(  WSJ   4/27  )

• New York City’s Times Square is looking to rebound from its worst economic crisis by becoming more like Las Vegas.
• Times Square’s economy suffered more than that of any other New York neighborhood in 2020. During the early months of the pandemic, its reliance on tourists and theatergoers was its biggest weakness. Hotels and retail businesses closed down as visitors stayed away. Crime rose.
• Now, entertainment is reemerging as a source of strength. Weekly Broadway attendance was at 90% of its prepandemic levels in mid April, according to the Broadway League, a trade association. Times Square’s hotel occupancy in March was about 80% of the March 2019 level.  Meanwhile office occupancy across Manhattan was at just 37% of prepandemic levels as of Mid-April.
• This means Times Square is coming back faster than other parts of Midtown that are more dependent on office workers.
• A Hard Rock International branded hotel opened on West 48th St on Monday. Planet Hollywood restaurant in Times Square closed in 2020. They found a substantially cheaper space on 42nd St where they plan to open a new Planet Hollywood restaurant in late 2022.
• Some investors are also buying Times Square hotels at bargain prices, betting they can run a profit when more tourists return. MCR and Island Capital Group LLC last week said they paid $373M for the Sheraton New York Times Square hotel – about half price that property last sold for in 2006.

 New Report raises concerns about plan for Penn Station renovation

(  Record  5/11  )

• New York Independent Budget Office is one of growing concerned parties for Penn Station renovation: The current plan lacks of many of important details on the total cost of the station projects and related improvements, expected future revenues, and how the financing plan for the station renovation would work.
• The concerned report’s author, Sarah Stefanski raises questions about why taxing Madison Square Garden isn’t on the table, how this proposal would be financed, and whether is a demand for millions sf of office space.
• Under the plan, 8 developments would be built around the Penn Station – the busiest transit hub in the Western Hemisphere before the pandemic – and provide 18.3M gross sf of hotel, retail, office, residential and parking space. Transit upgrades would include building eight new tracks and five platform south of Penn Station, predominantly for NJ Transit use, and renovating the current station to improve pedestrian flow with more entrances, stairwells, escalators and elevators.

 Bond Yields Fall After Powel Talk 

( WSJ 5/5)

• Treasury yields fell Wednesday to 2.914% after the Fed Chair Jerome Powell said central-bank officials weren’t giving serious thought to raising short-term rates by more than half-a-percentage point in future meeting. ( There were rumors about increasing 0.75% in the future)
• Yields, which rise when bond prices fell, climbed early Wed and initially clung to gains after the fed approved interest-rate increase as it tries to fight inflation running at its highest level in decades.

 Zillow Investors Look for Opendoor

(  WSJ  5/9 )

• Real estate has been a relatively safe haven for investment dollars. Online real estate platforms held tight to this narrative amid a turbulent equity market, shaken fist by a pandemic and now what seems to be a macroeconomic downturn.
• There have been many warning signs. The biggest was Zillow’s home-flipping implosion in November.
• Zillow is trying to reinvent itself as a real-estate super app, facilitating rather owning the home transactions. But investors lost interest. Zillow’s shares dropped 37% this year heading its 1st Qt earning report.
• With Zillow’s automated home-flipping business sunsetting, its Premier Agent business, which connects agents with customer leads, becomes central to its story again. Now the company is testing a payment model in which agents pay only when they successfully close a transaction with a Zillow lead.
• With all these, still investors are buying shares of iBuying leader Opendoor which will be looking to offload the 13,360 homes it had on its balance sheet at the end of 1st Qt as well as another 8,066 homes under the contract to be purchased, for a total of $7.9B in market value. Opendoor’s 1.9% share of MLS-listed homes in markets where it operated last year underplays the technology’s impact in the cities where it has a large presence.
• As of the 1st Qt, Zillow said it was seeing fewer users visit its apps and sites than in the same period last year. And Similarweb’s data show site visits to Zillow-owned platforms declined annually for nine consecutive months.
• If you have the risk tolerance, there is a potential value play at hand: Opendoor’s shares lost 67% of their market value since Zillow said it was winding down its iBuying business.

 After 2-Year Run, Tech Sector Feels Postpandemic Hangover

(  WSJ  5/9  )

• The technology industry, which powered the U.S. economy during the pandemic and grew at tremendous scale during a decade of ultralow interest rates, is confronting one of the most punishing stretches in years. Global powerhouses and fledgling startups are feeling pain from a variety of economic, industry and market factors, spawning postpandemic turbulence in e-commerce, digital advertising, electric vehicles, ride hailing and other segments.
• Companies that emerged as job-creating juggernauts in the past two years – collectively adding hundreds of thousands of workers to their payrolls in engineering, warehouse and delivery jobs – have begun to freeze hiring or even lay off employees.
• Amazon in late April reported the slowest quarterly revenue growth in about two decades, as its e-commerce machine has decelerated recently while operating expenses have grown faster than sales.
• Netflix lost subscribers during its first quarter for the first time in more than a decade and signaled that losses are set to continue – news that caused investors to shave $54B off its market value in one day.
• Apple cautioned that the resurgence of Covid-19 in China could threaten to hinder sales by as much as $8B in the current quarter.

 Google’s Immunity Doesn’t Hold

( WSJ 5/5)

• Google is resilient, but not bulletproof.
• 1stQt results from parent company Alphabet Inc. Tuesday afternoon showed that the world’s largest online advertising company is hardly immune to the pressures being felt by others in the sector. Total advertising revenue grew 22% year over year to $54.7B, but still shy of the $55B expected by Wall Street.
• The main culprit was YouTube, where ad revenue of nearly $6.9B fell about 8% short of the $7.4B analysts were expecting. YouTube’s ad revenue saw substantial deceleration, growing 14% in the most recent quarter compared with 25% growth in the December period and 49% growth on last year’s 1st
• Google is still in excellent shape. Operating earnings of $20.1B for quarter even came in 2% ahead of Wall Street’s projections despite the advertising revenue miss. But with the forces weighing down the global online ad business unlikely to abate in the 2ndQt, the biggest player in the business won’t remain unscathed.

 Others/Tech News: Tesla will develop “Cell Phone”?

• Possibility of own customized OS installation.
• Smart phone OS market will grow to $12B in 2026 from $4.5B in 2019