Weekly News (September 4, 2019)
This week’s Interest Rate
30 Y Rate: 3.5%/ 15 Year Rate:3.125%/ 10 Y Treasury: 1.462%/ Prime Rate:5.25%
Ref IR: 2.00- 2.25%
Englewood Cliffs, NJ loses housing ruling at the court
(The Records 9/4)
- Superior Court Judge Christine Farrington issued an order on 8/27/2019 saying the court has determined that the Borough has acted in bad faith and determined to be constitutionally non-compliant regarding its affordable-housing obligation.
- The order gives Normandy Real Estate Partners the authority to intervene in the borough’s affordable-housing negotiations with Fair Housing Center and build residential units at 800 Sylvan Ave,
- Mayor Mario Kranjac said that the judge Farrington is wrong in her application of the law and her understanding of the facts and he would order an appeal immediately.
- Under the state constitution, municipalities in New Jersey allow housing opportunities for low and moderate-income residents. Towns that don’t comply leave themselves open to so-called builder’s remedy lawsuits.
Uber founder purchased a penthouse in SoHo, Manhattan at $36.5M ($5420/sf)
- Uber founder, Travis Kalanick purchased a condo unit in SoHo at 565 Broome Street. This penthouse has view of NYC skyline and Hudson River view and 4 Bed rooms and 4.5 Bath, and size is 6,734 sf. Also 3 terrace of 3,400 sf are included with roof top deck and swimming pool.
- Monthly maintenance fee is $25,474.
- Travis Kalanick has been stepped down from CEO two years ago.
Manhattan Luxury condo sales dropped in July due to increased tax
(The Korea Times 9/4 )
- NYC has increased “mention tax” from 1% to the maximum of 3.9% categorically as of 7/1/2019 for more than $1M property, and transfer tax by 0.25% additionally. According to WSJ, there were 162 sales for more than $2M condos which is only 62% of the average sales of 10 years ago. This number was lowest for 6 years, and in terms of July records, it was lowest since 2009.
Still “key money” for getting rent is an issue in NYC
(The Korea Times 9/4)
- NY State has decided that application fee for an apartment should be limited to maximum $20 as of June, 2019 and the fee includes background check and credit check, and security deposit is limited to 1 month rent. According NYT, landlords request $500-$600 additional key money more often through real estate broker who represents landlord.
- Some co-ops increased the rent after this new law becomes effective, which creates more confusion in the market.
Moving out from NYC metropolitan area is increased sharply
(The Korea Daily 8/31)
- According to Crains NY reported that average 277 people are leaving NY area daily which is double of 132 people in 2017 while 201 in LA and 161 in Chicago. NY State has 19,798,228 population in 2017, which is decreased by 256,019 from 19,542,209 in 2018.
- Korean population in NYC is also decreased by 0.2% from 98,402 to 98,158 between 2010 – 2015
- The reasons of moving out are housing expenses and general living costs.
- Mostly they are moving into Dallas and Austin/TX, Phoenix/AZ, Tamper/FL, Atlanta/GA. There are average about 100 moving in daily in these cities.
Lord & Taylor sold at $100M to Le Tote, AP reported.
(The Korean Times 9/3)
- Lord & Taylor owned by Canadian company, Hudson’s Bay sold to Le Tote and they will only manage real estate and lease of 38 stores for next 2 years. Le Tote becomes the biggest stock holders and has 2 seats in Board of Directors.
- Originally in 1826, Lord & Taylor started as Food and Clothing retailer and grew to luxury women clothing department store.
- Early this year, Lord & Taylor on 5th Ave, Manhattan was closed down and occupied by WeWork.
NAR reported home Prices increases in 91% of metro Areas in 2nd Qt
(RE in-depth 8/2019)
- Most metro area saw price gains under marginal inventory growth in 2nd Qt, 2019, according to NAR quarterly report. Single family median process increased in 91% of measured market with 162 of 178 metropolitan statistical areas, which is up from 86% share in 1st Qt.
- National median price for single family in 2nd Qt is $279,600, up 4.3% from the 2nd Qt in 2018($268,000)
- Lawrence Yun, NAR chief economist, said home builders must bring more homes to the market. “New home construction is greatly needed, however home construction fell in the 1st half of the year,” he said. “This leads to continuing tight inventory conditions, especially at more affordable price points. Home prices are mildly reaccelerating as a result.” Also Yun said, “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”
“Instant Buying” through on-line becomes key word?
(The Korea Daily 8/31)
- While digital world advances, Real Estate transaction keeps analog method. Silicon Valley might want to changes. They (Zillow, Open Door, Offer Pad) help to develop the flipping business through “instant buying” program which is much more effective than conventional flipping sales.
- Silicon Valley already changed calling taxis, and delivering foods. However, house is different from Uber taxi because house is the biggest investment of average house hold in their life.
- Some negative comments are 1. iBuying is too much capital oriented investment with very little margin which will not lead to explosive popularity 2. It can create instability and danger in Real Estate market which will lead to economy crises. Redfin CEO, Glenn Kelman expressed his warning that reckless buying properties without idea of what to do afterwards can be dangerous in RE market.
- iBuying is very weak, but it is growing: Zillow purchased 700 houses. It is forecasted that they will end up buying about 5000 houses per month in 3 – 5 years.
- Zillow chief economist said that Zillow will make money not form transaction, but from mortgage loans and that is the reason Zillow owns mortgage company.
Other/Tech News :
Tesla announced that customers buy Tesla with Tesla insurance, the insurance premium will be 20-30% cheaper.