Weekly News (September 13, 2023)

Mortgage Interest Rates Review

(United Mortgage Nation  9/13/2023)

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

Manhattan Condo sold at a half price: 1억3,500만 달러 짜리 매물 반값에    

(Korea Times    9/13/23)

• A Condo which is an tire floor at the “432 Park Ave” is under negotiation at about $70M which is about a half of the listing price at $135M. The condo was listed 2 years ago.
• Usually there is no big demand for super high price luxury condos, but there is some negative opinion about this condo from the beginning of the construction which caused frequent conflict between residents and the management company.
• With strong winds, the building( 425.5m – 1400 ft height) is oscillating with loud noise. In 2018, water pipes were busted due to the high pressure and some units were submerged and the elevators were down for awhile.

Gateway Project finally groundbreaking: 게이트 웨이 프로젝트 드디어 첫삽  

(Korea Times  9/13/23)

• The Gateway Development Committee signed off the 1st project on 11th. The 1st project is to establish the foundation structure for the Tonell Ave project to dig the tunnels under the river.
• This project will cost $47.3M and the Federal government will contribute $25M. After this project is finished in 2025, the digging tunnels will be began and the new rail road tunnels will be operated in 2035. 5 more related projects among total 9 projects will begin in this year.
• The total cost of the Gateway project will be $16.1B and the federal government promised to support $6.8M last July and the committee applied the additional $3.8B.

Florida Faces Luxury rental Glut: 플로리다주에 너무 많은 임대 주택 건물 

(WSJ    9/13/23)

• Developers are racing to build more luxury rental apartments in South Florida, threatening to create a glut at the higher end of the market despite the stream of affluent new residents still pouring in.
• Multifamily construction has been soaring across the U.S., particularly in the Sunbelt, especially in South Florida. The Miami metropolitan area, has more units under construction as a share of inventory than any other major market in the country, acc. to CoStar Group.
• The luxury sector’s vacancy rate will rise to 11% over the next two years, according to a forecast from Juan Arias, Co-Star’s director of market analytics in South Florida. Home prices in the area have increased by more than 50% since 2020.

Rental units under construction

House Prices On the Rise Again In U.S. : 최근 집값이 다시 상승세

(WSJ  9/9/2023)

• Home prices aren’t falling anymore. After declining on a year-over year basis for five consecutive months—the longest run of declines in 11 years— U.S. home prices rose in July.
• The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected after mortgage rates soared last year. Scarcity is a big reason.
• Sales could keep shrinking in the coming months as mortgage rates hover above 7%, and the housing market heads into the typically slower fall and winter. But even if that happens, prices are unlikely to fall significantly, economists say, because there still aren’t enough homes for sale.

U.S. median existing-home price, change from a year earlier

Real-Estate Doom Loop Threatens America’s Banks:  상업용 부동산 침체가 미국 은행을 위협

(WSJ  9/9/23)

• With the commercial real-estate market now in meltdown, Banks’exposure is even bigger than commonly reported. The banks are in danger of setting off a doom-loop scenario where losses on the loans trigger banks to cut lending, which leads to further drops in property prices and more losses.
• In 2015, the country’s banking regulators joined together to warn that high concentrations of commercial mortgages put banks “at greater risk of loss or failure.” Regulators’ playbook for banks now, like 2008 financial crisis, allows banks to work with struggling borrowers and allow them to keep mortgages on their books at face value in many cases.
• Banks’ total exposure to commercial real estate adds up to $3.6T.

Maturing commercial property loans by lender type
 

Shift Seen in Fed Officials’ Rate Stance: 준비위원회, 금리 인상의 자세 변화

• For more than a year, Federal Reserve policy makers were unanimous that they would rather raise interest rates too much than too little— that is how serious they considered the threat of persistently high inflation.
• That is changing. Now, though, other officials see risks as more balanced. They worry about raising rates and causing a downturn that turns out to be unnecessary or triggering a new bout of financial turmoil.
• Fed officials raised rates at 11 of their past 12 meetings, most recently in July, to a range between 5.25% and 5.5%, a 22-year high. They appear to be in broad agreement to hold interest rates there at their Sept. 19-20 meeting, giving them more time to see how the economy is responding to increases.

U.S. Says Google Chocked Rivals As Trial Starts: 드디어 구글에 대한 독점 소송 시작

(WSJ  9/13/23)

• Google paid huge sums to cement its dominance in internet search, shut out competitors and stifle innovation, the Justice Department alleged in kicking off the biggest antitrust trial in more than two decades.
• The ruling in the nonjury trial, scheduled to go through mid-November, will come from U.S. District Judge Amit Mehta, who could order a breakup or changes to the way Google, a unit of Alphabet, promotes its search engine.
• The trial is expected to include testimony from Alphabet CEO Sundar Pichai, Microsoft CEO Satya Nadella and Apple executive Eddy Cue, an adviser to Apple CEO Tim Cook.