Weekly News (November 22, 2017)

1. Mortgage interest deduction will be maintained

Congress financial committee released revised plan:

Mortgage Interest deduction limit from $500,000 (House Representatives) revert back to $1 Million
Corporation Tax 35% → 20% Plan will be delayed till 2019
Individual Tax : 7 levels (House Representatives: 4 levels) will be kept (Max 39.6% → 38.5%)
Local property tax / Income tax deduction will be gone (House Representatives: Local income tax deduction will be gone, but property tax deduction will be limited up to $10,000)

2. If Tax reform passed, Middle class will pay more tax

25% of Middle class will pay $1,000 more per family
In 2026, 33% will pay $1,600 more per family
Definition of middle class: 3 member family’s yearly income $50,000~$160,000
NYC mayor mentioned middle class tax burden will be doubled and the state economy will be suffered

3. NJ tallest condo building in Jersey City: ’99 Hudson Residential Tower’

79 stories / 900 FT / 781 units (cf. Goldman Sachs building 781 FT)
Currently 16 floors up → complete in 2019
Architects: Perkins Eastman / Developer: China Overseas America, Inc.
Marketing: Marketing Directors
Price: $1,400 / SF → 64 % of Manhattan condo price (1 Bedroom: $889,000~, 2Bedroom: $1.5 Million~)
Developer purchased the lot at $68 Million from Harts Mountain Industries in 2013
Ask for internal sales ‘Helena Liu’ (C Land Realty NY member)

4. Tax Reform hits Homeowners (by Lawrence Yun, NAR chief economist)

If Tax reform passed, Home owners will hit
Homeowners already pay 80~90% of all federal income tax in any given year
The plan to double the standard deduction ($12,000 to $24,000) → Fewer homeowners will use mortgage interest deduction → Only wealthy people will use interest deduction
Big family will loose more because deduction of $4,050 per person would go away
Renters → standard deduction make them better off → More renters (Typical wealth of renters has fallen from $5,900 to $5,100 since 2010 while home owning households have seen their wealth jump from $192,800 to $231,400)
Congress must not forget sustainable and successful homeownership should be encouraged
Homebuilder group opposes new tax reform
NAR reported tax reform would lower home values by 10% overall

5. Amazon will start Pharmacy business? In-home delivery?

Pharmacy industry → $421 Billion
Amazon obtained Pharmacy license in 12 different States (NJ, Connecticut, Arizona, Michigan, etc.)
They will start as early as next month
Expect not that easy due to complicated payment option with insurance, etc.
In-home delivery will start 11/8 by ‘Secure -lock service’
Wanted customers will install Key In-Home Kit ($249) → Delivery man will open the door/deliver the goods in 5 min. à One time secure code will be used → After delivery, One time code cannot be used, change to original code
NYC, LA, etc. in about 40 cities will be available

6. Commercial RE market is slowing down

Value gap between buyers and sellers are widen
Office building transactions in NYC are relatively better than other sectors, but the value gap is about 10%
Commercial RE Market has been good for past 8 years → Thought: will come to end soon
According to WSJ, REITS sold $46.7 Billion this year ($71 Billion last year)
According to CBRE, demand for commercial rent stays flat (Building owners think too optimistic)

7. Reasons to lower the house price

According to Recent CBS report, the following reasons will cause to lower house price
Murder / accidental death / criminal in the house (Ex. Sandy Hook incident)
Haunted house / ill spirited house (in NJ, no obligation to disclose) → Often the court favors to buyer who claimed seller did not disclose…)
Near cemetery (NAR reports about 12% lower)
Near funeral house (NAR reports 6.5% lower)