Weekly News (May 26, 2021)

This week’s Interest Rate (21st Week)

(By Fairway Home Loan )

 Prime Rate:3.0% / Ref IR: 0.00- 0.25% 

• 2021 Conventional loan limit: Conforming: $548,250/ Conforming high balance: $882,375

 No Evictions, $750M assistance part of housing bill

(Record  5/21 )

• In NJ, a coalition of housing advocates is raising questions and concerns about a new bill in negotiations that aims to prevent a tsunami of evictions once a COVID moratorium lifts.
• Under the bill, landlord will not be allowed to evict certain low and middle income tenants who missed rent payments during the COVID pandemic but still sue them for the debt accrued. The current moratorium prevents people from being kicked out of their homes through mid-August even if they don’t make payments.
• But as COVID cases hospitalizations decline, New Jersey leaders are grappling with how and when to end housing protections and avoid a sudden wave of evictions and foreclosures. Since April, landlords filed close to 62,000 eviction cases, according to the Administrative Office of the Courts.
• The new bill includes an additional $750M in rental assistance and would end the eviction moratorium early July 31, 2021, though this date could be pushed back to the beginning of the next year.

Manhattan’s Apartment – Vacancy rate is High

(WSJ   5/21 )

• More than one in 10 Manhattan apartment is vacant, raising the prospect that discounted rents and other tenant deals could persist through at least the summer.
• The Manhattan borough’s apartment vacancy rate rose in April to 11.6%, up from 2.42% one year ago, according to Miller Samuel and brokerage Elliman meanwhile the national apartment vacancy rate has held steady below 5% in recent months, according to CBRE.
• Manhattan’s tumbling rents and highest vacancy rate in years reflect the exodus from the borough during the worst of the pandemic.  New arrivals have been slow to take their place.
• Median apartment rent after concession fell 6.2% in April compared with March, the largest monthly decline since the financial crisis in 2008, according to Miller Samuel.  At $2,975 a month, median rent is down 21.2% from April of the last year.
• Sings of falling inventory in homes for sale also could result in more would-be homeowners in search of a rental, said David Blatman, a real-estate broker at Triplemint.

Google opens the First offline store in Manhattan

(Korea Daily   5/22)

• In this summer, Google will open a Google store in Chelsea, Manhattan to sell and display Pixel phones, wearable gears, smart speaker, Nest thermometer, etc.  The store will also provide service including having workshop, re4pair, problem solving, etc.
• Google purchased the building in Chelsea in 2018 at $2B, which is about 1.12M sf.
• The company wishes to boost IT gears which was a weak area and the company purchased Fitbit, wearable gear start-up company, at $2.1B in 2019.

NYC economic revival?

( Korea Daily  5/ 22)

• According to Labor Deptartment (DOL), NYC added 35,100 jobs in April in NYC.  Among them, 15,000 is restaurant jobs.  NYC has lost 375,000 jobs due to the pandemic and now it recovered about 40%.  In April, NYC’s unemployment rate is 11.4% while it was 11.7% in March.
• Google reported that search for “Restaurant” is record high since 2004, and search for “Bar”, “Dress”, and “ Lipstick” is higher than 2019, which indicate people are getting ready to go out to work and enjoy.
• This year, hotel occupancy increased 60%, Yellow cap increased 40%, Uber/Lift increased 20% compared to last year.

Demand for 2nd homes increased sharply in April

(Korea Daily  5/22)

• According to Redfin, number of fixed rate mortgage application for 2nd home increased 178% compared to the last year while the application for primary home increased 78%.
• Also Refin said that demand for 2nd homes increase over 80% for consecutive 11 months.
• A part of reason of this increase is increasing remote work which is 18.3% according to Labor Dept.  Also low interest rates is contributing this demand.
• Home price around resort area increased 27%, compared to a year ago, to the median price of $450,000

The number of home sale declined for 3 months while home price is record high

(Korea Times   5/24)

• NAR reported that home sales in April declined 2.7% to 5.85M from the last month while experts forecasted 6.07M.  In fact, home sales declined for 3 consecutive months this year.  But home sales in April showed 33.9% increase compared to last year April.
• Homes in the market is 1.16M which shows 20.5% decline compared to the least year.
• The national median home price is $341,600 which is 19.1% increase compare to the same period of the last year.
• Home price increase and home sales increase rates are record high.
• 25% of home sales was cash buy in April this year, and last year April it was less than 15%.

Bitcoin’s Fall Accelerates

(WSJ  5/24 )

• The wild ride in bitcoin and other cryptocurrencies accelerated over the weekend, with bitcoin prices falling back near $30,000 and flirting with their lowest levels since late January. Bitcoin’s total market value has fallen below $630B, down from more than $1T earlier this spring.
• Bitcoin’s intense rollercoaster ride from $18,000 to $64,000 and back to $30,000 over the past six months is a reminder that digital assets are volatile investments.  Julian Emanual, managing direct at BTIG.  Bitcoin momentum has stopped with investors largely blaming Tesla’s decision to suspend accepting bitcoin as payment for its vehicles and comments from Chinese authorities about the need for tighter regulations.
• Tesla CEO Elon Musk also spurred worries earlier this month that his company would sell its bitcoin holdings, adding further pressure.
• The weekend selloff extended to other digital currencies as well.  Ether has dropped 17% over the past 24 hours, while dogecoin, the joke currency, has fallen 14%.

Chinese population starts decreasing?

(Korea Times   5/24)

• Chinese population is one of important issues worldwide.  Financial Times reported that Chinese population fell down below 1.4B which is the first time population decrease in 60 years.  This population decreasing phenomena happens 10 year earlier than UN’s forecast.
• If China cannot resolve this population decrease, the world will go into a swamp of very slow economic growth and very high inflation instead of low inflation and high growth.
• For the past 30 years between 1990 and 2017, vast number of low income skilled labor supply, which is about 240M, has increased to contribute to fast economic growth in China.  While keeping this population decline trend, 200M production capable labor force will be reduced by 2050, which is bigger than total labor force combined among Germany, France, UK, and Italy.
• Some experts say India can be next labor supply source, new China, but infrastructure and the split of entrepreneurship are lacking in India and it needs 3 “India’s to replace China.
• The co-writer of “The Great Demographic Reversal”, Manoj Pradhan said in his book that major countries worldwide will choose inflation than high tax which is unpopular tactic and warn high inflation from end of 2022.