Weekly News (July 25, 2018)

1. Korean RE agents got summons for short sale fraud

  • Acc to The Korea Times (한국일보), about 10 agents for short sale fraud in EC, Palisades park, Fort Lee, etc
  • Some agents pleaded guilty and in process of pre-bargain
  • Agents secretly agreed to damage the property and lower the value à purchase it through dummy buyer → flipping and selling higher price

2. K Town in Manhattan (32nd St) is still booming

  • In general, Mid-town commercial district used to be Golden Commercial District
  • Recently vacancy is increased  Rent is decreased
  • Relative high Rent : Low sale / Due to on-line business, many store are closed
  • Manhattan is changing from landlord’s market to tenant market (more landlord’s concession)
  • Still 32nd st area (K Town) is booming → hard to get rent → special block
  • Demands is getting bigger → no vacancy on 1st floor ($250/sf + Key money) → moving upward to 2nd floor and higher → becomes general trends
  • According to PD Properties, Korean business → 90 on 32nd between Broadway and 5th Ave.

hotel, beauty salon, NoRaeBang, spa → 44 (49%) / restaurant, Bar, Café → 33 (37%) / cosmetic store, general store → 13 (14%)

  • Chinese are looking for spaces, but Korean will not would not yield their business district
  • New construction (mixed use) at the corner of 32nd St and 5th Ave → 39 stories (316 5th Ave)  Existing building (6 story) is demolished already   Total: 52,340 sf (1 – 2 floors: retail spaces / 8 – 36 floor: residential units / 33-36 floor: duplex penthouse)
  • BBQ Korean Restaurant “LOVE” (319 5th ave) will open (9000sf) / lease: 15 year, rent: $100,000/M)

3. Some Bergen Country area will have frequent flood damage after 20 years

  • According to UCS (Union of Concerned Scientists), Little Ferry and Moonachie are constant flood concerned area
  • 70% of Little Ferry area will be chronic flood area after 2100
  • 40% of Moonachie area will be chronic flood area after 2035 with 26 times flood a year

After 2100, 615 houses out of 872 houses will have flood damages

4. 40% of 100 big cities in US are over priced

  • In May, house prices went up by 7.1% from last year (1.1% up from last month)
  • Core-Logic forecasted house price will be up by 5.1% in May 2019 because of low inventory
  • 52% of upper 50 big cities are over-priced (34% → proper level /14% → under-priced)
  • “Will buy house in 12 month” answer → 15% of existing home owner / 28% of renters
  • “Will sell house in 12 month” answer → 11% of existing home owners
  • Increasing Interest Rate will home owners to hesitate selling their homes
  • Unless we improve inventory issue, house price will go up

5. New Luxury Condo will be constructed in Long Island, Hampton

  • At east side of Shinnecock Canal : Total 37 units townhouses ”Hamptons Boathouses”
  • Each unit: 1500-2900sf / price: $1.5M – $3M
  • Luxury amenity: outdoor pool, library, fitness center, massage room, etc.
  • Marketed by Elliman
  • Cost: $110M / will be completed in 2020

6. Manhattan RE Unit price is #1 in US

  • According to Property Shark, $200,000 can buy
  • Manhattan: 126sf / Cleveland: 3769sf / San Francisco:260sf / Boston: 371sf
  • San Jose:376sf / Brooklyn: 451sf / San Diego: 491sf / Los Angels: 501sf / Seattle: $525sf
  • Al Paso, TX: 334sf / Houston: 2093sf / Nashville: 2109 sf / Jacksonville, FL: 2162sf

7. Fort Lee4, NJ is ideal for medical Cannabis (Marijuana) dispensary

  • Potential medical marijuana operators picked Fort Lee as prime location
  • They have met with Mayor, Sokolich – Fort Lee is Gateway community to New Jersey
  • Fort Lee has access to 25 thoroughfares and over 100,000 cars travelling daily
  • Time line for dispensary applicants is going to be in September this year
  • Lodi and Woodcliff Lake banned recreational and medical marijuana
  • Mahwah, Hasbrouck Heights, Carlstadt have banned recreational marijuana
  • Fort Lee council will continue to discuss on medical marijuana legalization while mayor is in favor
  • Meantime, New Jersey quietly takes first steps to decriminalize pot → attorney general ordered to adjourn all marijuana offenses till September 4th

8. Trump plans 10% tariff for $200B (6000 items) against Chinaà Triggers criticism

  • Food market (tuna, salmon, etc): → might use different country

China’s fishing ban period will ends in August → 10% going up from September

mackerel, octopus, sea weeds price might go up by 10%

  • Clothing: It was not included in 1st $50B tariff items, but raw clothing material included in additional $200B tariff / Tariff on Machinery is more concerned
  • Logistics/Distribution: import will be decreased or importers will change to different countries to import goods
  • Consumer will experience price increase →  feel penalty for average household
  • Tariff becomes tax on consumers (family, farmers, labor workers)
  • Politicians start raising concerns, criticism, warnings

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