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Weekly News (July 25, 2018)

1. Korean RE agents got summons for short sale fraud

  • Acc to The Korea Times (한국일보), about 10 agents for short sale fraud in EC, Palisades park, Fort Lee, etc
  • Some agents pleaded guilty and in process of pre-bargain
  • Agents secretly agreed to damage the property and lower the value à purchase it through dummy buyer → flipping and selling higher price

2. K Town in Manhattan (32nd St) is still booming

  • In general, Mid-town commercial district used to be Golden Commercial District
  • Recently vacancy is increased  Rent is decreased
  • Relative high Rent : Low sale / Due to on-line business, many store are closed
  • Manhattan is changing from landlord’s market to tenant market (more landlord’s concession)
  • Still 32nd st area (K Town) is booming → hard to get rent → special block
  • Demands is getting bigger → no vacancy on 1st floor ($250/sf + Key money) → moving upward to 2nd floor and higher → becomes general trends
  • According to PD Properties, Korean business → 90 on 32nd between Broadway and 5th Ave.

hotel, beauty salon, NoRaeBang, spa → 44 (49%) / restaurant, Bar, Café → 33 (37%) / cosmetic store, general store → 13 (14%)

  • Chinese are looking for spaces, but Korean will not would not yield their business district
  • New construction (mixed use) at the corner of 32nd St and 5th Ave → 39 stories (316 5th Ave)  Existing building (6 story) is demolished already   Total: 52,340 sf (1 – 2 floors: retail spaces / 8 – 36 floor: residential units / 33-36 floor: duplex penthouse)
  • BBQ Korean Restaurant “LOVE” (319 5th ave) will open (9000sf) / lease: 15 year, rent: $100,000/M)

3. Some Bergen Country area will have frequent flood damage after 20 years

  • According to UCS (Union of Concerned Scientists), Little Ferry and Moonachie are constant flood concerned area
  • 70% of Little Ferry area will be chronic flood area after 2100
  • 40% of Moonachie area will be chronic flood area after 2035 with 26 times flood a year

After 2100, 615 houses out of 872 houses will have flood damages

4. 40% of 100 big cities in US are over priced

  • In May, house prices went up by 7.1% from last year (1.1% up from last month)
  • Core-Logic forecasted house price will be up by 5.1% in May 2019 because of low inventory
  • 52% of upper 50 big cities are over-priced (34% → proper level /14% → under-priced)
  • “Will buy house in 12 month” answer → 15% of existing home owner / 28% of renters
  • “Will sell house in 12 month” answer → 11% of existing home owners
  • Increasing Interest Rate will home owners to hesitate selling their homes
  • Unless we improve inventory issue, house price will go up

5. New Luxury Condo will be constructed in Long Island, Hampton

  • At east side of Shinnecock Canal : Total 37 units townhouses ”Hamptons Boathouses”
  • Each unit: 1500-2900sf / price: $1.5M – $3M
  • Luxury amenity: outdoor pool, library, fitness center, massage room, etc.
  • Marketed by Elliman
  • Cost: $110M / will be completed in 2020

6. Manhattan RE Unit price is #1 in US

  • According to Property Shark, $200,000 can buy
  • Manhattan: 126sf / Cleveland: 3769sf / San Francisco:260sf / Boston: 371sf
  • San Jose:376sf / Brooklyn: 451sf / San Diego: 491sf / Los Angels: 501sf / Seattle: $525sf
  • Al Paso, TX: 334sf / Houston: 2093sf / Nashville: 2109 sf / Jacksonville, FL: 2162sf

7. Fort Lee4, NJ is ideal for medical Cannabis (Marijuana) dispensary

  • Potential medical marijuana operators picked Fort Lee as prime location
  • They have met with Mayor, Sokolich – Fort Lee is Gateway community to New Jersey
  • Fort Lee has access to 25 thoroughfares and over 100,000 cars travelling daily
  • Time line for dispensary applicants is going to be in September this year
  • Lodi and Woodcliff Lake banned recreational and medical marijuana
  • Mahwah, Hasbrouck Heights, Carlstadt have banned recreational marijuana
  • Fort Lee council will continue to discuss on medical marijuana legalization while mayor is in favor
  • Meantime, New Jersey quietly takes first steps to decriminalize pot → attorney general ordered to adjourn all marijuana offenses till September 4th

8. Trump plans 10% tariff for $200B (6000 items) against Chinaà Triggers criticism

  • Food market (tuna, salmon, etc): → might use different country

China’s fishing ban period will ends in August → 10% going up from September

mackerel, octopus, sea weeds price might go up by 10%

  • Clothing: It was not included in 1st $50B tariff items, but raw clothing material included in additional $200B tariff / Tariff on Machinery is more concerned
  • Logistics/Distribution: import will be decreased or importers will change to different countries to import goods
  • Consumer will experience price increase →  feel penalty for average household
  • Tariff becomes tax on consumers (family, farmers, labor workers)
  • Politicians start raising concerns, criticism, warnings

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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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