Weekly News (May 6, 2020)
This week’s Interest Rate (19th Week)
(Fairway Asset Corp.)
30 Y Rate: 3.375%/ 15 Year Rate:2.875%/ 10 Y Treasury: 0.657%/ FHA:3.490%
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
Conventional rates are getting better, but Government loans(FHA,VA, USDA) still have difficulties.
Palisades Park, NJ will raise Property Tax by average $97
(The Korea Times 4/29)
- Town government has passed the 2020-2021 budget of $24,669,075 which is increased 2.21%. In this total budget, tax levy is increased 3.91% to $17,939,585. Therefore, average tax is increased by $97.26. It was tie vote between council members: 3 for and 3 against, and the mayor Chris Chung’s vote was a casting vote and the budget has been passed.
New Jersey, Parks and Golf courses opened on 5/2(Sat)
(The Korea Times 5/6)
- The Governor Phil Murphy issued the executive order that all parks and golf courses open from 5/2 (Sat) – A half of park’s parking will be allowed to use and play ground, bath rooms, and visitor center will be still closed.
- In golf courses, keeping social distance and wearing masks will have to be enforced.
- This is the first biggest step to alleviate the Pandemic lockdown.
NYC began “Open Street” on 5/2, earlier than planned
( The Korea Daily 5/4)
- The Original plan of “Open Street” was supposed to open up 7.14 miles around and inside parks and neighboring streets from 5/4. NYC decided to begin “Open Street” on 5/2 instead, and let residents enjoy sunny weekend with 79 degree.
- However, the mayor requested to keep 6 feet social distance and wearing masks in order to prevent re-occurrence of COVID-91 outbreak.
- NYPD has issued 43 tickets for the violation of social distance through the weekend. So far, from 3/16, 60 people have been arrested and 343 tickets have been issued.
New York Office Market Anticipating a Slow Spring Season
( Jason Shim / Costar 5/4)
- Despite the ongoing coronavirus pandemic, the New York office market performed better than expected in the first quarter. But many of the leases signed in the first quarter had been in the negotiation stage, making the completion of deals in late spring and summer a story to watch.
- With many buildings tours canceled, layoffs already hitting the office sector and relative price uncertainty, deals in medium-stage talks could never reach the finish line.
- Using new national guidance from Oxford Economics, the baseline scenario now depicts a substantial amount of job losses in 2020, with office vacancies rising sharply into 2021 and recovering to pre-pandemic levels in 2024. Any upticks in office vacancy will likely see asking rents fall as owners aim to fill properties in a competitive market.
Social Distancing created big impact to “Share-Economy” industry
( The Korea Daily 5/4)
- Airbnb’s IPO is in danger and the company is reducing its manpower. The company is expecting the loss of about $1B in the second half in 2020. In Beijing, China, the guests has reduced 96% and In Seoul, Italy, Rome, it has reduced about 40%.
- WeWork office has closed in NYC due to COVID-19 and they are under negotiation with all their landlords. Also Softbank has decided to cancel the plan to bail out WeWork, which is to invest additional $3B. (The NYT 5/6). Meantime, WeWork is suing Softbank for breaching the investment contract, claiming that SoftBank and one of its investment funds received the benefits already from this contract.
- Uber’s stock, which filed IPO in May last year, has dropped 30%. The company has already reduced 1200 employees last year before COVID-19 situation. In Chicago, Uber demand has dropped by 60-70%. In general, Uber driver’ income has been reduced by 80% and the number of drivers have been reduced by 23.5%.
- Share economy industry needs to find new approaches such as delivery services and connecting with individually controlled demand.
MiRae Assets cancelled $5.8B contract to buy the hotel package of AnBang Group
( The Korea Daily 5/5)
- MiRae Assets is requesting to return their contract deposit of $580M, claiming that AnBang group caused the cancellation. AnBang group is suing MiRae Assets, claiming that Mirae Assets is making excuses.
- The $5.8B contract was to buy 15 hotels in 9 cities in US, including San Francisco Westin hotel, New York JW Marriot, Jackson Hall Four season, etc. The deal is supposed to close on 4/17.
- Buyer, MiRae Assets is claiming that seller, AnBang group did not disclose detail list of debts and could not maintain hotels properly. Seller is claiming it is a typical buyer’s remorse.
US Housing price will drop 2-3% this year, according to Zillow
(The Korea Daily 5/6)
- According to Zillow, house price will be deceased by 2-3% till the end of this year and sales will be decreased 50-60% from 4th Qt 2019. The sale decrease will hit the bottom in 2nd Qt 2020 and it will be recovered slowly by 10% a month till next year, which will be fully (97%) recovered by the end of 2021.
- Zillow’s chief economist, Svenja Gudell mentioned that residential market fundamental is stronger than Financial Crises and it is fair level in general, and demand is relatively good. Also he said that sellers, buyers, and agents deem to become easier to handle the transactions.
- Meantime, Capital Economics forecasted that house price will be decreased by 4% till beginning of 2021, and then it will stay for a while.
“Remdesivir” received FDA Approval as COVID-19 treatment as first time
( The Korea Daily 5/4)
- FDA urgently issued an approval of Remdesivir, developed by Gilead Science to treat patients with breathing difficulties and intensive care on 5/1/2020. This is the first case that FDA approved on COVID-19 treatment officially.
- Gilead Science expects to produce more than 140,000 rounds of its 10-day treatment regimen by the end of May and anticipates it can make 1 million rounds by the end of this year.