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Weekly News (December 26, 2018)

  1. Sold: 2 apartment buildings sold at $25.5M ($559/sf)
  • 992-996, 998 Amsterdam Ave. on 109th St
  • Built in 1920. Mixed use building under Rent Control
  • Total 45,576 sf with elevator – 49 units between Studio and 4 bedroom units
  • 1st floor: bar, restaurant, barber shop,etc. ( 7 retails)

 

  1. Senior population increased in Nassau Co in NYC
  • According to Census report, age group of 55-64 increased by 48% during 2000-2016
  • Age group of 25-44 decreased by 18% during same period
  • Reason is high tax for younger population
  • Asian increased by 40.1% and Hispanic increased by 41.8% while White decreased by 7.4% during last 11 years (2005- 2016)
  • In Nassau Co, white is 62% which is highest while White in Hempstead town decreased by 20% for last 16 years
  • In spite of getting old and decreased birth rate, the county population increased by about 60,000 due to influx of immigrants(3 out of 10 speaks other language than English)

 

  1. Korean owned business reduced by number
  • According to HanGook Ilbo directory
  • Total 9217 Korean owned business in NY Metro area (reduced by 4.2% from 9617 last year / reduced by 3.7% from 9569 in 2009)
  • Moving/Delivery/Trucking sector(4.8%) reduced most by 13%
  • Reduction order (major 11 sectors): moving /trucking (4.8%: 201) → private schools (13.2%: 553) → construction/architects (5.8%: 244) → restaurant(8.3%: 347) → Chinese medicine (3.5%: 146) → lawyer (10%: 424) → RE agents (15.5%: 653) → CPA(4.4%: 186) → Office(24.5%: 1030) → beauty salon (4.2%: 177) → insurance (5.7%: 242)
  • 6 sectors (Chinese medicine, lawyer, Dr. office, RE agents, construction/ architects, beauty salon) are increased from 10 years ago (2009)

 

  1. US Government shut down might affect SBA loan
  • About 30M small businesses.
  • Those who need SBA loans have to access some other funds available
  • In 2013, Government shut down caused people traffic reduction by 7.3%. consumption reduced by 2-4% down due to non-paid vacation and reduction of government employee’s income
  • If shut down becomes long term, it might affect business revenue

 

  1. Economic Recession will come in 2019?
  • 10 years cyclic economic pattern is not automatic: fundamentals is still strong
  • UE rate is lowest in 50 years (many people did not want to see lowest UE rate because low UE rate triggers prices increased)
  • Jobs between age group of 25-54 increased by 3.2M since 2015, but jobs are mostly low income jobs which is the reason of not much prices increased
  • Above average income jobs did not show income increase
  • US could solve 2 important fundamental issues: low UE rate and low prices
  • If economic recession comes, then it will be from organization debt and bond market
  • Total debt damage might be $300B – $400B which is relatively small, compared to US total assets of $100T. Stock market  might down by 10%
  • Average or lower income population do not own much bonds or stocks
  • Current high housing price is not from bubble, but from strong fundamentals
  • Rent increase is also from natural demand increase
  • Trade war will make US corporates hard to operate
  • IR increase might be source of burst on stock/bond bubble, which will cause also increase of trade deficit

 

  1. It becomes Buyer’s market, but Price dropping is not possible
  • Forecasted by NAR Chief economist, Lawrence Yun
  • He has been with NAR for 10 years. He will visit Japan next year
  • House prices will go down partially so that transactions will be increased
  • There will be NO big scale foreclosures as some rumor says because income is increasing steadily.
  • Slowly it becomes buyer’s market/ Buyer does not need to hurry and seller does not need to lower the price, either

 

  1. Looking back housing market in 2018 ( CNBC report by CoreLogic)
  • Mortgage application and new construction decreased.
  • Housing price increase rate becomes slow which means increase of equity slows down.
  • Average equity increase in 3rd quater is $12,400 from a year ago while 2nd quater increase was $16,000
  • House price in Octorber increased by 5.4% while 2017 increase was 7%
  • First half kept strong increase, but slowed down in 2nd
  • US total home equity is $9.8T while $5.9T is possible to do equity loan (increased by $571B from a year ago), but only $64B loan actualized, which is about 1%
  • Many home owners are watching the market without spending money from equity loan
  • 4 area, LA, San Francisco, Seattle, San Jose is the leading area for housing price increase or decreasing
  1. USPS Postage will be 55 cents from 1/27/2019
  • Biggest price increase for last 27 years
  • “Forever” stamp will 50 cents if purchased by 1/26/2019
  • 1st class over 1 ounce will add 15 cents/ post card is 35 cents which remains same

 

  1. R(ecession) and T(rump) fear caused black X-mas in global stock market
  • 1) Trade war between US and China, and 2) US monetary tightening policy 3) Trump’s political unclearness are causing stock market dropping
  • As of 12/24, Dow dropped by 653( 2.91%) to 21,792 → 1st time dropping in X-mas for 122 years. S&P 500 and Nasdaq dropped by 2.71 and 2.21 respectively

 


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Stephen Lee

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