Weekly News (May 17, 2023)

Mortgage Interest Rates Review

(Fairway Home Loan 5/17/2023)

30 yr fx (%)

15 yr fx (%) FHA (%) 10 yr Tr Y (%) 5 yr Arm (%)

7 yr Arm (%)

A year ago

5.250

4.250 4.750 2.959 4.625 4.750

A month ago

6.125 5.490 5.875 3.337 6.125

6.125

Last week 6.499 5.750 5.999 3.433 6.375

6.375

This week

6.599

5.750 5.875 3.549 6.599

6.599

Federal Fund Rate: 4.75% -5.25%        Prime Rate: 8.00%-8.25%

 

 

Korean Construction Companies move to U.S. : 한국건설사들, 미국 주책시장 속속 진출 

(Korea Daily     5/16/23)

  • Residential Market in Korea declined sharply due to high interest rates and crash in price, and Korean construction companies are betting for their profits in U.S. residential market. They deemed there are still vital residential markets in U.S., especially those area where Korean population are dominant. Also they realized SamSung Electronics, SK Hynix, HyunDai Auto, etc are constructing major factories in U.S.
  • It is the first time that BanDo GunSul (반도건설) actually purchased the land, project and construction management, and sale and lease. ( The Bora 3170 in LA)
  • Hanla Group (한라 그룹) started 8 story mixed use building (238 units) in LA.
  • Daewoo construction(대우) established a corporation in U.S. and started the projects in Carrollton, TX and NJ. ( 20 story, 370 units)

 

 

Quandary for Home Buyers: Nobody’s Selling: 주택 구입자들 당황. 주택소유주들 집을 안 팔아

(WSJ  5/11/23)

  • Many Americans who want to move are trapped in their homes—locked in by low interest rates they can’t afford to give up. These “golden handcuffs” are keeping the supply of homes for sale unusually low and making the market more competitive and pricey.
  • The number of homes newly listed on the market in April fell about 21% from a year earlier, an indication that sellers are holding back even during the normally busy spring home-buying season.
  • A healthy housing market has between 4 – 6 months of supply at current sales rates, economists say. The existing-home market, which makes up most of the housing market, hit a record low 1.6 months’ supply in January 2022 and stood at 2.6 months’ supply in March of this year, according to NAR.

 

 

Digital Rebels Want Real Stores Now: 디지탈 판매 신봉기업, 다시 상점을 열기 시작

(WSJ   5/13/23)

  • When Warby Parker started selling eyeglasses online in 2010, the last thing its founders wanted was a lot of retail space. These days Warby Parker had 200 stores in 36 states, Washington, D.C., and Canada at the end of 2022, which generated 60% of the company’s total sales. This year, it plans to add 40 more locations.
  • “Retailers have determined that they have to have great retail real estate to make money,” said John Kite, chief executive of Kite Realty Group Trust, whose portfolio of 181 shopping centers is nearly 95% leased.
  • Buoyed by strong retailer demand and low levels of new construction in recent years, vacancy at U.S. shopping centers fell to 5.6% in the first quarter, the lowest level since real-estate services firm Cushman & Wakefield began tracking in 2007.
  • Property owners are starting to unload troubled office buildings at fire-sale prices, a sign that the office market slump is moving into a new phase where more landlords are ready to capitulate.
  • Blackstone sold the Griffin Towers office complex in Santa Ana for $82 million, or about 36% less than the firm paid in 2014, say people familiar with the matter.Principal Financial Group sold a Parsippany, N.J., office building for $14.3 million, down from the $52 million it paid in 2008. The tower at 350 California in San Francisco, valued at $300 million in 2019, is expected to trade at about $60 million, or roughly 80% below that previous valuation.

 

 

Office Sector Sees Distressed Sales Rise:  사무실 건물의 숏세일 증가 

(WSJ   5/17/23)

  • Property owners are starting to unload troubled office buildings at fire-sale prices, a sign that the office market slump is moving into a new phase where more landlords are ready to capitulate.
  • Blackstone sold the Griffin Towers office complex in Santa Ana for $82 million, or about 36% less than the firm paid in 2014, say people familiar with the matter.Principal Financial Group sold a Parsippany, N.J., office building for $14.3 million, down from the $52 million it paid in 2008. The tower at 350 California in San Francisco, valued at $300 million in 2019, is expected to trade at about $60 million, or roughly 80% below that previous valuation.
  • The lack of activity is common in the early stages of real-estate market downturns because owners try to extend their loans or find other solutions, rather than dump their properties at a big loss. During the financial crisis, many owners negotiated mortgage extensions with creditors on the assumption that office markets would rebound when the economy started expanding.
  • Now, the uptick in troubled office-building sales indicates more owners believe weak demand is here to stay. The distressed-office deals is expected to rise even further in the months to come, as billions of dollars worth of mortgages need to be refinanced.

 

 

Inflation Eases, Keeps Fed Pause in Play: 인플레이션 다소 감소로, 이자률 상승 멈출수도

(WSJ  5/11/23)

  • The consumer-price index rose 4.9% in April from a year earlier, the Labor Department said Wednesday, down from March’s 5% increase. The inflation reading has declined from a recent peak of 9.1% in June 2022, but remains historically high.
  • Wednesday’s report showed that so-called core prices, which exclude volatile food and energy items, rose 5.5% from a year earlier, a slightly slower increase than in March. Economists see core prices as a better predictor of future inflation.
  • Some of them discussed then whether they might be done raising rates, Fed Chair Jerome Powell said at a news conference May 3. “We feel like we’re getting closer or maybe even there,” he said.

Consumer-price index, change from a year earlier

 

 

High Interest rate CD might be end soon: 고금리 예금 마지막 지금 맡겨야 

(Korea Times   5/15/23)

  • According to Investor.com, most of banks are selling CD with 5% interest rate, even 6 month maturity for the amount as small as $1000. Even some credit unions have mid-5% rate CD.
  • But this high CD for consumers might be ended soon because the Fed’s contraction policy might be ended soon, and therefore interest rates will start going down. Some banks already don’t provide long term CD such as more than a year.
  • For those who are seeking for most stable and low risk investment, yet high return on investment, now is the last chance to invest into CDs. ( It is still safe up to $250,000)

 

 

Why Amazon Isn’t Checking Out of Groceries: 왜 이마존의 그로서리 사업이 성장하지 못하나

(WSJ   5/13/2023)

  • Amazon has been dabbling in groceries for years. It launched its first grocery storefront on its website in 2006 and bought Whole Foods Market for $13.1 billion 11 years later.
  • The company that now generates nearly $525 billion in annual revenue has just over a 3% share of the U.S. grocery market between its branded stores and Whole Foods, according to the latest data from Numerator.  Walmart—one of only two other public companies on the planet generating more annual revenue than Amazon— has a 30% share.
  • Whole Foods has more than 530 locations in North America and the U.K., while Amazon has more than 60 stores in the U.S. operating under its Fresh and Go brands. By comparison, Walmart operates around 5,300 stores in the U.S., including Sam’s Club, and Kroger operates about 2,700.

U.S. grocery market share


 

 

 

 

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