Weekly News (November 8, 2023)

Mortgage Interest Rates Review

United Mortgage Nation  11/8/2023

Federal Fund Rate: 5.25% -5.50%        Prime Rate: 8.25%-8.50%

The Gateway Project finally breaks ground

뉴욕-뉴저지 새 열차 터널 마침내 첫 삽

WSJ  10/20/2023

• The groundbreaking ceremony for the Gateway project was held at the Hudson Yard on 3rd , and NY Governor Kathy Hochul and Secretary of US Department of Transportation, Pete Buttigieg have joined the ceremony.
• After long time discussion and negotiation among NJ, NY and Federal government, finally the Federal government agreed to support 70% of the total cost, $16.1B and 30% will be supported by both states, NJ and NY.
• The excavation work will start in 2025 and the project will be completed after 10 years in 2035.

One third of listed homes in NYC were not sold Last year

Korea Daily  11/7/23

• According to StreetEasy, 35.7% of the listed homes(39,845) in NYC couldn’t find new homeowners last year. Also DOM(Days on the market) was 89 days which 6 times longer than the nationwide average, 15 days.
• The main reason is the high mortgage interest rates, but inventory starts moving slowly as the buyers are getting used to higher interest rates. Raised house price is also contributing slow sales and the median price is $1,095,000 which is 3 times higher than nationwide average.
• The homes listed by RE agents has 37.9% higher probability to be sold than FISBO homes.

“WeWork” Files for Bankruptcy

“위웍” 끝내 파산 선고 

WSJ  11/07/23

• WeWork filed for bankruptcy: Chapter 11 in NJ, capping the flexible-office- space venture’s remarkable collapse after once being the nation’s most valuable startup.
• WeWork Chief Executive David Tolley said roughly 90% of the company’s lenders have agreed to convert their debt into equity, wiping out about $3 billion in debt. WeWork said that the company owns approximately $15 billion in assets and carries debts totaling $18.6 billion.
• Tolley said that the company will reject between 50 and 100 leases and continue its efforts to renegotiate many others, now with more leverage. Aside from those 50 to 100 locations, all other spaces will continue to operate as usual, he said.

Office Conversion Get Even Harder to Do

사무실, 주택 단지로 변환 쉽지 않아

WSJ   11/8/23

• Developers last year created 3,575 apartment units in the U.S. through office conversions, according to RentCafe. That amounts to less than 1% of all apartments built that year through new construction.
• The process has always been fraught with difficulty and few office buildings are natural candidates. Conversions are easiest in older, lower-quality and mostly empty buildings with small floors. But less than 1% of office space in the biggest U.S. cities ticks those boxes, according to Avison Young.
• Even harder, slowing rent growth might make apartment conversions less attractive to investors, if the trend persists into next year. Asking rents for apartments fell 1.2% nationally over the past 12 months, according to rentals website Apartment List.

Property Giant China “Vanke” Falters

또 하나의 중국 거대 부동산 기업 “Vanke” 도산 위기

WSJ   10/24/23

• China’s housing slump is shaking the foundation of another giant property developer.— and the government is trying to prevent the problems.
• China Vanke, one of the oldest and largest real-estate companies in the country, is the latest Chinese developer to fall victim to a market selloff that has made investors worry about its liquidity. Vanke’s Hong Kong-listed shares have also closed to half their market value this year.
• Vanke’s ownership structure makes it a state-backed developer. Following the defaults of Country Garden, China Evergrande and dozens of their privately run peers, investors had been wondering how much government support Vanke might receive if it ran into the same kind of liquidity problems that brought down its peers.

A building under construction by Vanke in Nanjing, China. Dozens of developers have defaulted on their international debt.

Barclay forecasted rate increase in Jan

연준, 12월이 아닌 내년 1월 금리 인상

Korea Times  11/8/23

• The global investment bank, Barclay forecasted that The Fed will increase the federal fund rate in Jan 2023, not in Dec, 2023.
• The unemployment rate is 3.9% in Oct which is the highest since Jan and also increased from Sep, 3.8%.
• US Commodity market announced the probability of raising rates in Dec was less than 10%, and that of increasing rates by 0.25 in Jan was 16% while the market announced 8.6% previously.

Battery Giants Hard to Beat

배터리 거대 회사 이기기 어려워…

WSJ  10/31/23

• Having charged up in their home market, Chinese electric-vehicle- battery firms are becoming major export players. The West’s efforts to protect its own markets might prove too little, too late.
• Sales of new-energy vehicles surged 37% year over year in China in the first nine months of 2023, according to the China AAM. But exports jumped sharply: China is now the world’s top exporter of Evs: Contemporary Amperex Technology, or CATL, and carmaker BYD are the top two producers of EV batteries in the world.
• Outside China, Chinese battery manufacturers lag behind South Korean rivals—the top three have nearly half the market. But if CATL keeps logging growth numbers like it did this year, that could change fast.