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Weekly News (August 30, 2017)

1. Manhattan Central Post Office building becomes Transportation hub

  • James A. Farley Post Office building renovation faces the 2nd phase
  • It will become Moynihan Train Hall
  • 250,000 SF transportation hub / 700,00 SF restaurant, retail
  • Central Post Office will be connected to Pen Station through under path for LIRR and AMTRACK (9 Platforms and 17 rail roads)
  • Total cost: $1.6 Billion → 2500 full time job / 9500 construction workers

2. Bank of Hope Stock dropped by 27% for last 6 months

  • Lowest point in 52 weeks
  • Recently hit $16.00 (By contrast, Hanmi Bnak stock sold at $26.85 → 17.9% Up)
  • NIM (Net Interest Margin) of Bank Of Hope→ 3.78% (Hanmi Bank: $3.92%) – Lowest rate among all Korean Banks in Southern California
  • Reasons: Conflict exists from the merge
    Lack of Infra and human assets with fast growth to $13.9 Billion assets
    Not so effective communication between Front line workers (Branch Mangers) and top management team

3. In July, Home sale decreased bit

  • According to NAR, July sales: 5.44 Million → 1.3% Down CMT to last Month June: 5.51 Million
  • Forecast was 5.55 Million
  • Buyers are delaying action due to low inventory
  • Existing house: 90%, New construction: 10%

4. Tax deduction for Mortgage Interest will be limited?

  • Mortgage Interest deduction is allowed up to $1 Million loan (for married couple)
  • Equity loan is allowed up to $100,000
  • Trump Admin & Republican party propose deduction limit to $500,000
  • Fed expect $64 Billion total tax reduction portion from mortgage interest deduction this year
  • Example: 2.4% of tax payers in Cal will pay more tax due to this new law (US : 0.8%)
  • Median price in LA, CA → $569,000 (Top level with NYC)
  • Claimed that it is unfair policy because it is targeting high-priced, big metropolitan area

5. Consumer confidence improved again in August

  • Highest grade in 16 years since July 2001
  • Consumer confidence index rose from 120 in July to 122.9 in August, with current condition and their expectation for the next 6 months

6. Home prices went up in June, led by Seattle

  • Case-Shiller 20 Big city index rose by 5.7% in June
  • Shortage of properties for sale causes the prices to rise steadily at more than double the pace of average hourly earning (Different than sub-prime mortgage crises)
  • Index committee member said the price will up continually
  • Lower interest rate is easing buyers’ affordability pressure
  • Seattle metro are rose by 13.4% (Largest gain) / NYC & Washington DC: 4% / Cleveland: 2.9% / Chicago: 3.2%
  • According to NAR, house inventory dropped 9% for last 12 month to 1.92 Million / Median price surged to $258,300 by 6.2%

7. Many PACE (Property Assessed Clean Energy) loans → default

  • According to WSJ, as of 6/30, 1100 borrowers default (245 last year) → Mainly in Cal and mainly for solar energy panels
  • Possible for local government to do auction sale
  • Generally small amount, but high interest rate → Same lien order as property tax
  • PACE loan : $5,000 ~ $100,000 (Average loan: $25,000)

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Stephen Lee

He has been in Real Estate industry in about 20 years and has been Broker of Record for 9 years. His experience includes residential, commercial, and property management. Prior to involving with Real Estate business, he has been involved in the digital communication equipment industry utilizing his engineering background and education, including running own company. He has established C Land Realty in 2011 which has grown to staffing over 100 Real Estate agents and the annual transaction amount of over $110,000,000 today.

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