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. 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)