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Weekly News (June 21, 2017)

1. Michael Pollotta (Democrat Chairperson of Palisades Park, NJ) passed away 6/18/2017

  • Named as Godfather of Politics in Palisades Park
  • 88 years old / Chairperson for 55 years ( 1961-2016)
  • Recently there was tension between him and the present mayor James Rotundo
  • Korean community in Palisades Park was influenced positively in many aspects

2. ‘The Forge’ in Long Island City in Queens, NY begins pre-lease on 6/20/2017

  • Near subway station 7 at 44~28 Forbes St
  • 38 stories/ 272 units with sky lounge, common work shop, Health club etc.
  • Studio: $2485, 1Br: $3030, 2Br: $4150

3. Manhattan Supersize complex ‘Essex Crossing’ is under construction 

  • Rental/Condo/Commercial mixed use at Lower East side Manhattan
  • Total 1.65M SF / 3 Construction companies are involved
  • 1st phase: apartment will be completed in Oct. 2017 (All phases completed in 2024)
  • 1079 Luxury condo units / Retail / Theater / Bowling lane / Senior center with 150,000 underground market
  • 99 rental units → designated to low income seniors → 60,000 application for lottery

4. New York begins investigation to Landlord who asks tenant’s immigration status.

  • Rejecting the lease or extension of the lease due to immigration status → illegal act
  • Exception: LL can ask the status related questions when 1) applying rent control apartment
    2) opening bank account for security deposit
  • www.ny.gov/programs/we-are-all-immigrants

5. Millennial Generation still leading position to buy

  • Mil Gen: 26 ~36 years old → Still #1 group buyer
  • 32 years old, Average Salary: $72,000, Average house price:$ 182,500
  • 34% of total buyers according to NAR → #1 group for 4 years (Baby boomers: 30%)
  • down pay: 6%, 60% of buyers→ no children when they buy houses
  • Average size: 2,375 SF
  • 73% was active to negotiate commission fee (X-Gen: 44%, Baby Boomer-Gen: 24%)

6. 1031 Exchange program might be gone?

  • Tax reform contains a plan to delete 1031 Exchange program or reduced
  • Reformers’ idea is to re-gain $40.6 Billion tax for future 10 years without 1031 program
  • RE professionals warns that commercial building trade will reduced significantly → Construction and other related industries will be affected
  • Compensation plan might be introduce: More depreciation can be reported

7. Still Housing cost is concerned in US

  • 1/3 of households pay over 30% of income as housing cost → 9 Million (39.8 Million last year)
  • Over 50% as housing cost →18.8 Million (16% of total households)
  • Big city (like NY) is worse → Over 30% pay as housing cost: 40% of households in NY, 44% of households in LA
  • Demand is still high compared to supply, especially low cost rentals
  • New apartment supply → 7 units in 2017: increasing for last 7 years, but lowest increase since 2011
  • US total vacancy → 6.9%: decreasing for 7 years and lowest for last 30 years
  • Generally lower than $800 rental decreased (261,000) ←→ Over $2,000 unit increased (1.5 Million)

8. Amazon took over ‘wholefood’ chain

  • Purchased Wholefood share at $42 per share, total $13.7 Billion (27% higher than normal Wholefood share price)
  • Existing management will remain → Expand it’s presence to grocery market
  • AmazonFresh was launched in 2008 and AmazonGo (automated off line store) in 2016
  • 30 Million members in US → will affect $700 Billion ~ $800 Billion Grocery market map
  • Amazon stock price increased by 3.3% / Walmart, Target, Costco stocks are down

9. Google will build modular home for employees

  • Big headache for Google due to soaring house price in Silicon Valley, CA
  • Google’s mother company ‘Alphabet’ will build 300 modular homes
  • Contract with ‘Factory OS’ →$25 Million ~$30 Million (house made in the factory / assembled on site)
  • Facebook is also planning to build 1,500 units

10. Depositing cash less than $10,000 repeatedly becomes troublesome

  • Deli owner deposited $4000 ~ $5000 every month → triggers IRS audit → Fine of about $200,000
  • Numerous times of check cashing more than $10,000 check to avoid CTR (Currency Transaction Report) → IRS investigation
  • Bank is required to report cash deposit over $10,000 (Also SAR requirement: Suspicious Activity Report for under $10,000)

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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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