Weekly News (October 24, 2018)

1. More Luxury Apartment Buildings in Brooklyn, Crown Heights

  • Big riot due to conflicting between Jews and AA in 1991
  • For last 10 years, new RE development occurred
  • In 2014, 341 Eastern Parkway, 8 story luxury apartment building initiated as a good signal
  • In 2017, 120 unit/8 story “Dean” apartment completed
  • In 2018, 12 story, 185 unit apartment at 409 Eastern Parkway (1 bedroom → $2600, 2 bedroom → $3700)
  • In Saint Johns Place, two apartments: “Frederick”, “Olmstead” completed (1 bedroom → $3500)
  • According to Street Easy, average rent in Crown Height → $2300 → high but lower than downtown

2. Trump Place removed the name “TRUMP” on the building

  • “Trump Place” at 200 Riverside Boulevard (69th Street)
  • The condo association voted to remove “Trump” sign on the building on 10/17/2018
  • New sign will be “200 River Boulevard”
  • In 2016, Trump Place at 140/160/180 Riverside Aveue changed their name to street name by sending petition to owner, Equity Residential

3. Fort Lee public parking garage will open in the middle of Nov, 2018

  • 4 story parking deck /352 parking spaces ready
  • On ground, additional 273 spaces → total 625 spaces
  • Daily meter parking & monthly pass is also available

4. 78% of US residents prefer to rental

  • According to Freddie Mac, 3 out 4 people think rental would be less burden financially
  • 6 month ago, it was 67% → 11% Up in 6 month period
  • 58% of renters say no plan for buying a house at all (4% Up from 6 month ago)
  • Rent preference was trends after financial crises due to sub-prime mortgage
  • House price steadily and continually increased → nationwide low inventory and increased price (& interests rate moving up) → RE market is slowing down and less sales
  • 2 out 3 people experienced difficulty (could not pay) to pay rent in 2 years
  • If many people prefer to rental, then rent will be increased soon

5. 40% New Jersey Residents’ income is barely minimum living cost

  • According to United Way survey, 38.5% (about 1.2M) of NJ residents are difficult to make minimum living cost such as housing, food, transportation, and medical expenses
  • In NJ, 4 family household needs minimum of $74,748  (housing:$1,330 /education:$1,512 /food:$603 /transportation:$533 /medical:$787)
  • In order to make this income, minimum hourly pay needs to be $37 /hour /family
  • In Bergen county, 30% of residents are difficult to make minimum living cost
  • Poverty line income is $24,300 nationwide
  • United Way suggested increasing minimum pay per hour as a solution

6. Where is US RE market after 10 years since financial crises on Fall of 2008?

  • According to Miju News at the week of 10/12: for 10 years, equity dried out /short sale & foreclosure/ many owners become renters
    1. Loan process becomes tougher (past: No doc loan /125% loan of home value, etc)
    2. Credit score becomes better indicator to prevent default (past: 620-640 can obtain good condition loan /FHA loan case allows 500)
    3. House owning rate: 62.9% in 2016 / 64.3% in 2018 (past: 69.2% in 2004). Only 35% of those who lost their house during crises have re-purchased house. Many potential home buyers → but limited inventory, high house price, high interest rate. Weak new construction, reluctant to move → hindrance to buy
  • Future: last 3-4 years of strong RE market → slowing down → turning to weak market
  • 2020 will see clear weakening → 2022–2023 becomes weaker
  • It proves RE market is cyclic

7. US GDP growth forecasted highest in 4 years

  • According to Bloomberg, 3th QT growth will be 3.4% → positive impact for Trump at November election
  • 2nd QT growth recorded at 4.2% which was higher than forecast (consumer confidence, corporation’s investment expansion)
  • Also forecasted that, from next year, growth will be weaken ← cost for interest rate hike, inflation due to Trade War against China

8. 1099-C (cancellation of debt) form should not be ignored

  • Example: Mr. Kim received IRS notice of penalty and interests after he was forgiven of $10,000 credit card debt 5 years ago → he ignored 1099-C form sent from IRS on $10,000
  • Financial companies and lenders should issue 1099-C to client and IRS for over $600 forgiven amount
  • Amount on 1099-C should be considered as income and keep 1099-C for 3 years

9. The “Caravan” move reaches to 7000 people

  • Immigrants originated from Honduras → reached to 7000 people
  • Walking through Mexico toward the border of US
  • Some on foot carrying children and some hitching rides on trucks
  • The caravan has fueled a fresh rift between Trump and those countries’ leaders just 2 weeks before US midterm elections
  • Under pressure from US, Mexico offered the immigrants asylum (only 150 to 200 people a day can be processed)

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