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Weekly News (November 22, 2017)

1. Mortgage interest deduction will be maintained

   Congress financial committee released revised plan:

  • Mortgage Interest deduction limit from $500,000 (House Representatives) revert back to $1 Million
  • Corporation Tax 35% → 20% Plan will be delayed till 2019
  • Individual Tax : 7 levels (House Representatives: 4 levels) will be kept (Max 39.6% → 38.5%)
  • Local property tax / Income tax deduction will be gone (House Representatives: Local income tax deduction will be gone, but property tax deduction will be limited up to $10,000)

2. If Tax reform passed, Middle class will pay more tax 

  • 25% of Middle class will pay $1,000 more per family
  • In 2026, 33% will pay $1,600 more per family
  • Definition of middle class: 3 member family’s yearly income $50,000~$160,000
  • NYC mayor mentioned middle class tax burden will be doubled and the state economy will be suffered

3. NJ tallest condo building in Jersey City: ’99 Hudson Residential Tower’

  • 79 stories / 900 FT / 781 units (cf. Goldman Sachs building 781 FT)
  • Currently 16 floors up → complete in 2019
  • Architects: Perkins Eastman / Developer: China Overseas America, Inc.
  • Marketing: Marketing Directors
  • Price: $1,400 / SF → 64 % of Manhattan condo price (1 Bedroom: $889,000~, 2Bedroom: $1.5 Million~)
  • Developer purchased the lot at $68 Million from Harts Mountain Industries in 2013
  • Ask for internal sales ‘Helena Liu’ (C Land Realty NY member)

4. Tax Reform hits Homeowners (by Lawrence Yun, NAR chief economist) 

  • If Tax reform passed, Home owners will hit
  • Homeowners already pay 80~90% of all federal income tax in any given year
  • The plan to double the standard deduction ($12,000 to $24,000) → Fewer homeowners will use mortgage interest deduction → Only wealthy people will use interest deduction
  • Big family will loose more because deduction of $4,050 per person would go away
  • Renters → standard deduction make them better off → More renters (Typical wealth of renters has fallen from $5,900 to $5,100 since 2010 while home owning households have seen their wealth jump from $192,800 to $231,400)
  • Congress must not forget sustainable and successful homeownership should be encouraged
  • Homebuilder group opposes new tax reform
  • NAR reported tax reform would lower home values by 10% overall

5. Amazon will start Pharmacy business?  In-home delivery?

  • Pharmacy industry → $421 Billion
  • Amazon obtained Pharmacy license in 12 different States (NJ, Connecticut, Arizona, Michigan, etc.)
  • They will start as early as next month
  • Expect not that easy due to complicated payment option with insurance, etc.
  • In-home delivery will start 11/8 by ‘Secure -lock service’
  • Wanted customers will install Key In-Home Kit ($249) → Delivery man will open the door/deliver the goods in 5 min. à One time secure code will be used → After delivery, One time code cannot be used, change to original code
  • NYC, LA, etc. in about 40 cities will be available

6. Commercial RE market is slowing down  

  • Value gap between buyers and sellers are widen
  • Office building transactions in NYC are relatively better than other sectors, but the value gap is about 10%
  • Commercial RE Market has been good for past 8 years → Thought: will come to end soon
  • According to WSJ, REITS sold $46.7 Billion this year ($71 Billion last year)
  • According to CBRE, demand for commercial rent stays flat (Building owners think too optimistic)

7. Reasons to lower the house price 

  • According to Recent CBS report, the following reasons will cause to lower house price
  • Murder / accidental death / criminal in the house (Ex. Sandy Hook incident)
  • Haunted house / ill spirited house (in NJ, no obligation to disclose) → Often the court favors to buyer who claimed seller did not disclose…)
  • Near cemetery (NAR reports about 12% lower)
  • Near funeral house (NAR reports 6.5% lower)

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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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