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