Weekly News (October 21, 2020)
This week’s Interest Rate (44th Week)
(By Fairway Asset )
|30 yr fx(%)||15 yr fx(%)||FHA(%)||10 yr Tr Y (%)|
|A year ago||3.500||3.125||1.727|
|A month ago||2.875||2.490||2.625||0.664|
(The rate based on 25% down payment with 740 above credit score)
Prime Rate:3.0% / Ref IR: 0.00- 0.25%
Potential home buyer — Do not apply deferred payment or forbearance program. If applied , they need to complete the program as soon as possible.
FHFA will add an adverse Market fee as of 12/1/2020. There is potential interest rates rise
Home price in Queens in 3rd Qt dropped due to Zoom-town effect
(Korea Times 10/20)
- According to Elliman Douglas, home price in Queens in 3rd Qt has been dropped to the median price $599,000 which was 1.4% down from 2nd Qt and 0.2% down from a year ago same period.
- Price in Northeast area has dropped 11.2% from the previous Qt and 9.7% from the previous year. Price in South area has dropped 6.5% from the previous Qt and 11,4% from the previous year. LIC condo price has dropped 2.3% from the previous Qt and 2.9% from the previous year.
- Sales (2,033) has dropped 40.5% from the previous year same period (3,416).
- Early time of pandemic, in 2nd Qt, median price in Queens rose 2.8 % from the previous Qt and rose 6.2% from the previous year same period.
- Interestingly, 1-3 family home price went up 1.4% from the previous Qt and 3.4% from the previous year same period. Also home price in New York suburban area is going up due to increasing demand.
Amazon opens the 3rd warehouse in Staten Island, NY with 970,000 sf
(Korea Times 10/13)
- New distribution center is located at Matrix Global Logistics Park Bayonne Bridge.
- Amazon opened the 2nd distribution center (450,000 sf) at the Last Mile Facility last summer and the 1st one (858,000 sf) as a supporting center in 2018.
- New center will act as a sorting center for the goods distributing to New York area.
- They are hiring 1250 employees at $17.50 per hour. (http://amzn.to/statenislandny )
- Matrix Global Logistics Park was established with 200 Ac in 2018 and IKEA with 1M sf moved in to the Park in 2018.
US home construction up 1.9% in September to 1.4M
(Record/ Korea Times 10/21)
- New home construction rose a solid 1.9% in September after having fallen in August as home building remains one of the bright spots for the economy.
- Applications for building permits, a good sign of future activity, rose an even stronger 5.2% to 1.55M.
- After a plunge in the spring due to pandemic-related lockdowns, housing has staged a solid rebound as demand for homes with more space has grown and mortgage rates have stayed at ultra-low levels.
- CNBC/NAHB reported that HMI(Housing Market Index) is 85 in Oct while it was 83 in September. Usually HMI over 50 is a sign of positive market. Demand for new homes is big, but supply is short due to 1) lack of land to build 2) Approval process is slow due to COVID-19 3) Price for construction materials was up and construction labor is short.
Uber’s founder builds a food realty empire
- The former CEO of Uber Technology Inc. has been quietly assembling a min-real-estate empire over the past 2 years, acquiring closed restaurants, auto-body shops and warehouses for use in his new ghost-kitchen venture.
- Entities tied to Travis Kalanick’s CloudKitchens, a startup that rents out space to businesses that prepare food for deliver, have bought more than 40 properties in nearly two dozen cities for more than 130M.
- The acquisitions are a big bet on the fast-growing food delivery business.
New York might ask Quarantine to people coming from New Jersey
(Korea Daily 10/16)
- As the positives are increasing in New Jersey, New York might control incoming traffic from New Jersey: in one day, 14th, the positives in NJ were 953. Last week, 8th, the positives were 1301 which was the highest number since 5/29.
- New York might consider asking quarantine process for the people coming from New Jersey and New York state will be in difficult situation on how to control.
Escalation of COVID-19 2nd wave might be real
(Korea Daily 10/20)
- US daily new positives are approaching to 70,000 which is the highest since July. As of 16th, new positives were 69,156 while the new positives were 57,519 on 17th, and it was 67,700 on 7/30.
- Daily new positives in New Jersey are exceeding to 1,000 (10.39 per 100,000) while New York positives are declined. Among tri-states (NJ,NY,CT), there will be traffic control if it is over 10 per 100,000.
- New York will open Ski facilities with 50% limit and theaters with 25% or 50 people.
- The director of National Health Institute, Francis Collins mentioned more COVID-19 spread because people stay inside while the weather is getting cold.
US Dollar value going down due to exceeding supply
(Korea Daily 10/19 )
- Dollar value rose up sharply right after COVID-19 outbreak, but recently dollar value has dropped to the level which is the lowest in 2 recent years.
- The extremists say that US dollar is about to lose its position of the key currency of which position has been maintained since 1919 after WW I. The worst scenario is that the value pf US dollar could drop 35%, said Stephen Roach, professor in Yale Univ.
- Especially as the worries of 2nd wave of COVID-19 becomes bigger in US, the fact that more stimulus fund will be needed makes the speculation worse.
- Meantime, the good side is that there is no other currency worldwide to replace US dollar so far, which takes 62 % of foreign currency reserves worldwide. It was the highest point of 85% in 1970’.
If Stimulus Package is not approved soon, it will be severe→ more default
(Korea Times 10/20)
- The number of households with mortgage payment or rent default is over 6M, according to MBA/RIHA. Last month, 2.82M households (8.5%) could not pay rent or paid partial rent. 37M households (7.1%) could not pay mortgage payment in September. 3rd Qt’s mortgage default was little lower than 2nd Qt, but it is still significant.
- The main reason is unemployment: Unemployment Rate is 7.9% in September which was reduced 0.5%, compared to 8.4% in August. Labor market lost 22M jobs in March and shows very slow recovery.
- Without the 2nd stimulus package, more mortgage and rent default will be added and the fact that eviction ban moratorium will be ended at the beginning of next year will make the situation worse.
U.S. sues Google as Monopoly.
(WSJ/ NYT 10/21)
- DOJ (Dept of Justice) filed a long-expected antitrust lawsuit alleging that Google uses anticompetitive tactics to preserve a monopoly for its flagship search engine and related advertising business, the most aggressive U.S. legal challenge to a company’s dominance in the tech sector for more than 2 decades.
- The government alleged that Google uses billions of dollars collected from advertisements on its platform to pay for mobile-phone manufactures, carriers, and browsers, like Apple Inc’s Safari, to maintain Google as their preset, default search engine, creating a self-reinforcing cycle of dominance.
- Google search engine market share: 80% in Desktop, 90% in Tablet, 92% in Mobile-phone.