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Weekly News (July 26, 2017)

1. Palisades Park, NJ, illegal basement renting headache 

  • Some tenants threaten owners without paying rent / run away over night without paying a few month rent
  • Town prohibits altering basement and renting by law
  • No practical solution from attorney → needs systematic approach to solve the situation
  • Reality is Palisades Park is high rental demand area
  • Town also prohibits short term rent for less than 30 days / Fine: $1,250 per night

2. NJ State failed to impose tax on Airbnb operation

  • Governor Christie vetoed to bill to impose tax on Airbnb and house sharing business
  • The bill proposed to charge 18% on this house sharing business- same as hotel
  • Last year in NJ, 6100 owners have had 257,000 renters and made $50 Million incomes

3. 63 story mixed use building will be in Long Islands City, NY

  • At 29-55 Northern Blvd, Long Island City (former Clock tower)
  • Total 1 Million SF → 786,335 SF: Residential (763 units rental) / 87,020 SF Commercial
  • Biggest project among developing project s in Queens / Developed by Dust Organization / Purchased the lot at $175 Million
  • Also Dust Organization will develop 7 building Hallets Point re-development project → will provide 2400 unit residential (Total cost: $1.5 Billion)

4. Former ‘RKO Keith’ Theater will be re-borne as 16 story mixed use building 

  • At 135-35 Northern Blvd (struggling for last 30 years)
  • Developer: Xinyuan Real Estate/ Construction Co.: Gilbane Building Co.
  • 16 story: 269 unit Condo with Glassy exterior
  • As a landmark site, entrance and lobby will be kept as original

5. NY State is #1 for long distance commuting

  • 16% of residence commute over 60 miles: 2 hours driving
  • Example: Scott Ubert lives in Bethlehem, PA wakes up 5am, goes to bus stop 10 minutes away, Rides a bus at 6:20, arrives Port Authority, walks about 20 minutes, arrives at work before 9am (During 2 hour ride in a bus, he prepares menu for the day on a laptop) He purchased 3100 SF, 5 bedrooms colonial at $375,000
  • According to 2013 US Census, over 21% of workforce commute over 60 miles / Maryland: 15%/ New Jersey:15%.
  • Increasing Manhattan commuting → Bucks County, Pike County in PA, Philadelphia in PA / Dutchess County, Rockland County, Orange County in NY / Sussex County, Warren County in NJ
  • Reason: 1. Housing price in city area soaring, 2. Technology advance to work during commuting hours

6. Seller’s Market Now 

  • According to NAR, US median price is $244,800 → 6% Up CMT last year
  • Reasons to be seller market: 1. Buying desire has gone up as economy recovers (potential demand to buy gone up by 30%) 2. House owning period become longer (When the market was hot → 4 years / Now → 8 years)
  • When it becomes seller’s market→ Buyer’s deposit / down payment increasing. No contingency to sell own homes. Possible multiple offer → Possibly higher than listing price. Possible deal without appliances.

7. Mortgage Rate is down after 2 weeks increase 

  • Slipped back to below 4 % level → 96% from 4.03% for 30 year
  • 45% a year ago / Average rate in 2016: 3.65 %
  • 15 year rate: 3.23% from 3.29%
  • Mortgage rates still remain historically low even Federal Reserve began to ratchet up short term rates

8. Sears agreed with Amazon that ‘Alexa’ will help it’s sale

  • Alexa-capable appliances to be sold on-line
  • Sears stocks went up by 18%
  • Kenmore CEO, Edward Lampert said: The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand
  • The agreement includes delivery, installation and service work beyond the point of sale, that comes with product warranties

9. Amazon goes to RE business?

  • On 7/11 ‘Hire a Realtor near (Zip code)’ appeared on Amazon Home and Business Service section → on 7/12 6:35pm disappeared
  • Zillow stocks dropped $44.54 from $46.15 that day
  • Amazon Hone and Business section has referral program to connect home improvement and home appliance installation and receive referral fee
  • Recently Amazon announced Ad to hire Smart home device professionals
  • Amazon launched service joining with Best buy (Geek Sqaud service)
  • If Amazon connects buyer/seller with Realtor → Zillow, Redpin will be in danger to survival level

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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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