Weekly News (August 30, 2017)

1. Manhattan Central Post Office building becomes Transportation hub

• James A. Farley Post Office building renovation faces the 2^nd phase
• It will become Moynihan Train Hall
• 250,000 SF transportation hub / 700,00 SF restaurant, retail
• Central Post Office will be connected to Pen Station through under path for LIRR and AMTRACK (9 Platforms and 17 rail roads)
• Total cost: $1.6 Billion → 2500 full time job / 9500 construction workers

2. Bank of Hope Stock dropped by 27% for last 6 months

• Lowest point in 52 weeks
• Recently hit $16.00 (By contrast, Hanmi Bnak stock sold at $26.85 → 17.9% Up)
• NIM (Net Interest Margin) of Bank Of Hope→ 3.78% (Hanmi Bank: $3.92%) – Lowest rate among all Korean Banks in Southern California
• Reasons: Conflict exists from the merge
  Lack of Infra and human assets with fast growth to $13.9 Billion assets
  Not so effective communication between Front line workers (Branch Mangers) and top management team

3. In July, Home sale decreased bit

• According to NAR, July sales: 5.44 Million → 1.3% Down CMT to last Month June: 5.51 Million
• Forecast was 5.55 Million
• Buyers are delaying action due to low inventory
• Existing house: 90%, New construction: 10%

4. Tax deduction for Mortgage Interest will be limited?

• Mortgage Interest deduction is allowed up to $1 Million loan (for married couple)
• Equity loan is allowed up to $100,000
• Trump Admin & Republican party propose deduction limit to $500,000
• Fed expect $64 Billion total tax reduction portion from mortgage interest deduction this year
• Example: 2.4% of tax payers in Cal will pay more tax due to this new law (US : 0.8%)
• Median price in LA, CA → $569,000 (Top level with NYC)
• Claimed that it is unfair policy because it is targeting high-priced, big metropolitan area

5. Consumer confidence improved again in August

• Highest grade in 16 years since July 2001
• Consumer confidence index rose from 120 in July to 122.9 in August, with current condition and their expectation for the next 6 months

6. Home prices went up in June, led by Seattle

• Case-Shiller 20 Big city index rose by 5.7% in June
• Shortage of properties for sale causes the prices to rise steadily at more than double the pace of average hourly earning (Different than sub-prime mortgage crises)
• Index committee member said the price will up continually
• Lower interest rate is easing buyers’ affordability pressure
• Seattle metro are rose by 13.4% (Largest gain) / NYC & Washington DC: 4% / Cleveland: 2.9% / Chicago: 3.2%
• According to NAR, house inventory dropped 9% for last 12 month to 1.92 Million / Median price surged to $258,300 by 6.2%

7. Many PACE (Property Assessed Clean Energy) loans → default

• According to WSJ, as of 6/30, 1100 borrowers default (245 last year) → Mainly in Cal and mainly for solar energy panels
• Possible for local government to do auction sale
• Generally small amount, but high interest rate → Same lien order as property tax
• PACE loan : $5,000 ~ $100,000 (Average loan: $25,000)