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Weekly News (Februray 6, 2019)

  1. Suicide in “Malcolm Towers” in Fort Lee, NJ on 1/30/2019 at around 1:45pm
  • 475 Main St, Fort Lee. Korean female(63) jumped from the window at 10th floor
  • Last week another suicide (Russian: 81) at 14th floor in the same apartment building
  • Korean woman lived with her mother(86) and she moved in recently
  • The motives are unknown

 

  1. $460,000 in Palisades Park town account is disappeared by hacking
  • Account in Mariner’s Bank is accessed by on-line hacking, bank announced
  • So far, no reason to believe that it is done by town government people
  • US Secret services, FBI, and Bergen County Prosecutor are investigating with full force
  • Similar accidents happened in Elmwood Park, Fairlawn, Oakland, Rockaway, Montville, etc. recently
  • Recent hacking crimes are done by “Ryuk” ransom ware

 

  1. Palisades Park school district will secure $56M to improve school facilities
  • The projects include facility improvement on early childhood school, Lindbergh elementary/middle school, high school
  • Among $56M education budget, 30-40% will be obtained from the State as matching fund and the rest will be tax money which will cause tax increase by $125 /year for next 10 years
  • $56M fund raising plan will be voted this fall for resident approval
  • Education committee pointed that good teachers are hesitating to come to school district and students are leaving the town to transfer to other towns

 

  1. ADM in East Rutherford, NJ opens this Spring
  • American Dream Meadowland in East Rutherford
  • Total 3.2M sf Entertainment Complex developed by Triple Five Canadian company
  • Over 400 retailers (Banana Republic, Century 21, Hermes, Microsoft, Sacks Fifth, etc) and restaurants (Dons Bogam (돈의보감), etc)
  • Swimming pool, play ground, indoor Sky, snow board, 5000 seat theater, aquarium in total of 639,000 sf
  • 40M visitors are expected per year which will create over 20,000 jobs, and $3.5B tax money for State for next 25 years
  • Meadowland complex becomes total entertainment complex along with Met-Life stadium and the Horse race track nearby

 

  1. The Plan for Amazon in LIC might be hindered?
  • NY PACB( Public Authority Control Board) can nullify the Amazon plan
  • PACB consists of 5 members including Governor
  • State congress wants to appoint Michael Gianaris(D) as PACB member, who opposes the plan strongly
  • According to recent opinion survey, NY residents favor the plan by 57%, oppose by 26%, no idea by 17% (79% favor for State’s re-evaluation, 13% opposing, 8% no idea)
  • Governor favors the plan expecting 25,000 job creation for next 10 years and 40,000 jobs for next 15 years, and $186B economic benefits for next 25 years

 

  1. Chinese are selling properties in Manhattan
  • China government is pulling out the funds out of US which creates worry in RE market
  • According to WSJ, Chinese sold commercial properties for $854M more than buying in 4th Qt, 2018. They were keep selling more than buying for last 3Qt
  • In 1st Qt, Chinese bought $4.2B commercial properties and sold $450M, and buying was $37.5B more than selling.
  • US economy was booming because of “China Money” for many years (AnBang group purchased Waldorf Astoria Hotel at $1.95B /China investors spent $19.8B in 2016)
  • 1) China money goes back to China and 2) Ref IR increase will press RE price going down may affect US economy negatively
  • Not only in US, China is also retreating investment in Australia and Japan
  • In Sydney, Australia, house price went down by 11% in 2018 and will go down 10% in 2019

 

  1. Less houses sold at higher than listing price
  • According to Zillow, “Sold” at higher than listing price is 19% in December 2018, dropped by 21% from November (total in 2018 was 23.5% while 22.7% in 2017)
  • Since May (24%), it is decreasing continually
  • Yet, it is too early to call Buyer’s Market because of recent lowering interest rate
  • Sellers need to be more cautious than before

 

  1. Real Estate related stocks are going down & Sub-prime loan is emerging
  • According to FT, construction company stocks are down and residential seas decreased, which might indicate a signal for recession
  • FT sees it is similar signs before the last financial crises in 2008
  • NAR announced that December sales were down by 6.5% to 4.99M which is lowest since November 2015
  • Price hike is also considered as bad signal and price level is above than 2006 level
  • Case-Shiller index is 205.85 in November 2018 while it was 184.55 in 2006, which might indicate the burst is coming
  • Three credit levels in US: Prime, Alt-A, Sub-prime
  • Sub-prime lenders with higher interest rates are getting higher profits, which can be a cause for financial crises

 

  1. Fed Reserves did not move to Ref IR increase
  • On 1/30/2019, FOMC decided not to raise Ref IR and fix to 2.25% – 2.5%
  • In 2019, only 2 time increase instead of 3 times
  • Fed Reserves ended Zero interest period in 2015 and since then, they did 9 times Ref IR increase. Last year, they did 4 times

 

  1. Number of foreign born 1st generation immigrants in US is biggest in 107 years
  • According to Pew Research Center, foreign born immigrants are 13.6% which is over 44M
  • 1 out of 7 is foreign immigrant in US which is biggest since 1910
  • The peak point was 14.8% in 1890 and it is decreased continually till it hit the lowest point in 1970 which was 4.7%
  • Comparing to other advanced countries, the immigrant level in US is not high
  • Australia is 29%, New Zealand is 23%, Canada is 21%, Swiss is 30%, Austria is 19%, Sweden is 18%

 


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Stephen Lee

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