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)