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Weekly News (October 3, 2018)

1. Korean Restaurant “GumKangSan” filed bankruptcy again

  • The restaurant (Owner: JiSung Yoo) filed chapter 11 on 7/12/2018
  • Frist chapter 11 filed in 2015 during wage dispute
  • Debt is about $500K- $1M and Loaners are about 49, including fine by NYC fire department ($41,000) and Health department ($35,000)
  • Real reason to file chapter 11 this time is to protect eviction by landlord
  • Total debt to LL is about $810,000 (rent: $189,000/ tax:$244,000/ water: $48,000, etc)
  • According to the restaurant owner, it is reaction from that LL could not sell the property due to the lease contracted till 2024
  • 2015 wage dispute judgment ordered the owner to pay $$2.67M → filed first bankruptcy
  • The owner changed his title of a property to his wife, according to Manhattan court

2. “E Mart” announced opening the 1st Store in LA, USA

  • 712 South Olive Street, LA → mixed Use complex in Jewelry District
  • Lease: 10 years / estimated lease amount: $40M/ 1st – 3rd floor in 6 story building (total: 52,000 sf)
  • Fit to “Grocerant” style trends
  • Opening will be toward end of next year
  • The building is famous landmark building (built in 1917)
  • Possibly it will compete against Wholefood nearby
  • The plan decided after complete retreat from China

3. A Luxury Condo in West Village sold at $43.5M → Highest price last month

  • 160 Leroy street /penthouse unit
  • 7700 sf/ 5 bedroom /5 bath/ super large library/ movie screen/ 4944 sf own roof top terrace with own swimming pool
  • Buyer : Michael Rubin (owner of “Kynetic”/ owns some New Jersey devil’s stock)

4. New Jersey will charge tax on Airbnb

  • Starting on 10/1, 5% occupancy fee, 6.625 sale tax (also local town can charge 3% as an option)
  • Reason : more tax revenue for hotel type of service /also possible hotel industry’s lobbying

5. Z-Gen will next major home buying force

  • Z-Gen: Born in 1995 (23 Y) – 2010 (8 Y)
  • Survey for 1995-1999 → over 85 % has a plan to buy a home during next 5 years
  • Y-Gen (millennium generation) shows 87 % /X-Gen shows lowest %
  • Biggest blocking factor → student loan ( Z-Gen:32%, Mill-Gen:17%, X-Gen:7%)
  • Location preference → suburban area (Z-Gen: 60%, X-Gen: 26%)
  • Down payment → 50% paid less than $10,000 (12% paid more than $50,000)
  • Period for preparation of down payment: 93% of Z-Gen → less than 5 year (only 68% of Mill-Gen )

6. Many people wish to buy home, but cannot: Why?

  • Home price move up and interest rates is also increased → lowest buying power since 2008
  • Home owning rate is increased slowly and steadily, but younger generation is still lower rate → Mill-Gen owning rate is 8% lower than Baby boomer Gen when they were Mill-Gen
  • Fannie Mae warns that Baby Boom Gen put houses on the market and younger gen is not ready to absorb and, then home price might be decreased sharply
  • Existing and new house sales are decreased for past few months
  • New house builder stopped building new house for 4-5 years after financial crises, and last few years new construction recovered to fair level, but slow down again last two month
  • June new home sale → 631,000 (yearly rate) → 3% down / July →  627,000 (1.7% down from June) / Augest → 629,000
  • According to NAR, July existing home sale: 5.34M → 7% down from last month (forecast was 5.42M)
  • Existing home sales → continuous decreasing for last 4 months → might be in market adjustment period

7. Fed Reserve raised Reference IR again by 0.25% on 9/26/2018

  •  → Reference IR: 2.00-2.25%
  • This 3 times : March, June, September
  • Fed Reserve forecasts 3 times next and 1 time in 2020 → no change in 2021

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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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