Weekly News (December 6, 2017)

1. PATH will be extended to Newark Airport ?

• NY, NJ Port Authority reviews a proposal: PATH extension to Newark Airport
• Extension from Newark Pen Station to Airport: Total 2.4 miles
• Port Authority allocated $1.7 Billion to this extension project out of $32 Billion of 10 year capital plan
• Also Port Authority allocated $15 Million to this project out of 2018 budget →  Will complete in 2026

2. Request schedule increase of ‘156’ NJ Transit 

• ‘156’ Bus: Between Englewood Cliffs, Fort Lee, Cliffside park, Weehawken ←→ Manhattan → No seats available with express line: Constant problem
• NJ Transit is negative (‘159’ line is enough seats) → Need to adjust schedule
  159 Bus: Fort Lee, Edgewater, West NY, Union City ←→ Manhattan)
• ‘156’ line passengers: 1.76 Million last year → 3.7% Up
• ‘159’ line passengers: 3.14 Million → 1.9% Up

3. US 20 big cities’ house price went up highest point in 3 years 

• According to S&P Core Logic, 20 big cities House price: 6.2% Up in September 2017 for a year
• US Average house price index went Up by 6.2%
• Reasons: 1. Strong labor market, 2. Low interest rate, 3. Low inventory
• 8 cities among 20 big cities exceeds the peak price before the financial crises
• S&P forecasts house price will go up continually further except one worry → Not enough inventory
• Example: Seattle → 12.9% increase / Las Vegas → 9% / Washington → 3.1% / Chicago →3.9%

4. Low inventory pushes Pre-Sale activity

• Buyers are looking into new construction pre-sale
• In October, 36% of new construction sales → Pre-Sale (20~30% deposit before ground-breaking)
• Since end of 2005, lowest inventory for 12 years
• In fact, construction speed is slow due to lack of skilled construction workers. → 98,500 residential workers for last year / In order to satisfy buyer demands, 150,000~160,000 workers needed

5. Required House income for buying house : NYC is 5^th in US 50 big cities

• Minimum income to buyer average house: San Jose → $216,181 (1^st) – House median price → $1.165 Million (16.5% Up, compared to 2016)
• San Francisco → $171,331 (2^nd), San Diego → $116,120 (3^rd), Los Angeles → $115,069 (4^th), NYC → $99,151 (5^th)
• Pittsburg → $35,205 – House Median Price → $146,000

6. US economy is experiencing highest point in 10 years

• According to Wall Street Journal, GDP → $17.17 Trillion in 3^rd QT (July, August, September) → Economically highest peak in 10 years (More than Forecasted GDP $17.13 Trillion)
• Nominal GDP exceeds Nominal Potential GDP
• Potential growth means maximum production capability by all production component without counting price inflation

7. Tax Reform is on the way between House and Senate

• Individual Income tax
  House: 4 levels / Max: 39.6% (Current)
  Senate: 7 levels / Max:38.5%
• Obama care
  House: Mandatory – Maintain
  Senate: Delete mandatory participation
• Mortgage Interest Deduction
  House: Allow up to $500,000 loan amount
  Senate: Maintain current level (up to $1 Million)
• Inheritance / Gift Tax
  House / Senate: Double the exemption amount
  Inheritance Tax: Individual ($5.49 Million) / Couple ($11 Million) → Double
  Gift Tax: Individual ($28,000) / Couple ($56.000) → Double
• Corporate Tax
  House / Senate: 35% → 20% (House from 2018, Senate from 2019)