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Weekly News (November 28, 2018)

1. Korean IT company (아이노스) in Palisades Park sued Café Bene

  • Korean franchise Café Bene, one time called Korean Starbucks, got sued by IT company in Palisades Park , NJ for $6M ($1.5M contract in 2013 and $4.5M in 2015)
  • In 2013, IT company contracted to develop software systems to bundle 50 franchise stores in US at $1.5M/ In 2015, 2nc contract at $4.5M with Korea Café Bene’s warranty
  • Attorney Kim & Bae office said that this case would a model case to prevent Korean franchises to exploit small companies without proper payment

2. Restaurant can advertise “BYOB” in NJ

  • “Stiletto Club” in Atlantic City filed law suit to stop banning BYOB advertisement in Federal court against AC city, AC police chief, Sate Alcohol control agency
  • Federal court raised Stiletto Club’s hand
  • NJ State used to issue tickets to Restaurant advertising BYOB
  • Restaurants with formal liquor license are objecting strongly while restaurants with BYOB only are happy

3. RE market is soaring in LIC, NY due to Amazon HQ2

  • During 2nd half of this year, 3000 new units are being built and another 3300 units in plan till 2020
  • In 3Qt, avg condo price was bit down to $976,000 ($1.01M last year)
  • Now RE market re-gains activities → open houses activities increased by 400%
  • 22-18 Jackson Ave, LIC (Galerie) requested price increase approval to the State
  • 44 Drive (Core) increased the price by 10% already and plans to increase one more time while “The Bond” and “Craftmen Townhouse” are planning to increase the prices
  • Rent will be up also when Amazon employees start moving in (currently Average $3100 for 1br, Average $3900 for 2 br)

4. Appraisal may be exempted under $400K house

  • FRB and FDIC are working on the regulation to change appraisal rule
  • Appraisal exemption rule under $250K made in 1994
  • New rule specifies “Evaluation” (instead of appraisal) for the house under $400K
  • Evaluation takes much less time and fee, and simpler
  • After 60 days period for collecting opinion, the decision will be made and put into practice during the 2nd half of the next year

5. House price increasing rate is being slow down in US

  • Smallest increase rate since January 2017 as mortgage interest rate increases
  • S&P Core-Logic Index increased 5.5% in Sep from a year ago: 5.7% in Augest / in 10 big city, 4.8% in September (5.2% in Augest) / in 20 big city, 5.1% in September (5.5% in Augest)
  • 30 Y interest rate is 4.75% while it was 3.90% a year ago (0.85% increased)
  • The number of sales was highest in November 2017 (existing home sales decreased by 9.3% from last year) – groundbreaking decreased by 8.7% from a year ago

6. Home owners live in a house longer than before

  • Before bursting housing bubble, average house owning period is between 46 months and 50 months which is about average 4 years
  • During recent years, it becomes almost 8 years: Home owners put all the efforts to keep paying the mortgage to survive
  • Now they are trying to sell their old houses and downsize, but condo/town houses price went up: hard to find their place to go/ hard to put down payment from equity built because they did almost zero down when they purchased house back then/ try to keep lower mortgage interest rates
  • This phenomena triggers demand for House Renovation

7. US Economy Growth will slow down next year to 2.4%

  • Accrding to CNBC, 10 economy experts forecast economy will cool down fast with the inflection point at 2Qt 2018
  • 2Qt 2018: 4.2% 4% in 2019  →  recession in 2020
  • Reasons: 1. Effects on Tax reduction will shrink  2. Interest rate increase Trade War
  • According to OECD (Organization for Economic Co-operation and Development), World GDP can drop by maximum 0.8% by 2021 if trade war continues

8. NJ Korean Association lacks of President candidate

  • Association fails to receive candidates 29th president election
  • Same situation: No candidates for 26th, 27th, 28th president elections
  • Deposit for trust fund is $30,000 (efforts to reduce the deposit was failed)
  • As Korean influence to politics in NJ becomes bigger, the association needs good leaders

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Stephen Lee

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