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April 2023 Email Update

The March median sales price for single-family homes was $1,083,750 (5.8% lower than March 2022) and for condos was $536,000 (4.0% higher than March 2022).  Demand continues to crater with 26.5% fewer single-family homes and 33.9% fewer condos sold compared to the same month last year and pending sales are more than 30% lower for both categories.  Inventory continues to grow with 2.1 months of single family homes available and 2.4 months of condos available despite fewer new properties coming on the market.

You can review more detailed current and past real estate market data on our website using the link below.

Monthly Statistics

An estimated 29,684 Hawaii residents left for the mainland from 2020 to 2022 for economic reasons.  The state experienced a greater than average impact from the COVID-19 government restrictions has recovered only 95% of its 2019 GDP and only 83% of the revenue generated by visitors.  Oahu experienced an even greater out migration.  31,682 residents left Oahu leaving its population below one million residents.  The population loss has been a drag on the county’s economic recovery in the form of lower household consumption and a growing labor shortage.  The rest of the nation has fully recovered economically from the pandemic while Hawaii continues to struggle.  Hawaii’s Chief State Economist sees the population shrinking even further due to Hawaii’s high cost of living and rapidly aging population. Tracey just returned from a trip on the East Coast and was reminded how much cheaper it is to live on the mainland with a trip to the grocery store serving as a serious eye opener.

Rising interest rates are rippling through the national rental market and causing investors to pause the rapid deal-making of the past two years.  1st quarter rental apartment sales have dropped 74% compared to the 1st quarter of 2022.  Not only have rising interest rates made financing more expensive, the bank failures of Silicon Valley Bank and Signature Bank have made other institutions more cautious.  Flat, and in some areas, decreasing rents have removed another popular strategy of would-be buyers since they can no longer raise rents to support the higher purchase prices.  Multi-family building prices have dropped 8.7% nationally and further declines could force some owners to sell when their short-term, floating rate debt comes due.  Owners may be forced to sell their recently acquired properties if their monthly cash flow does not cover the financing costs.  Rental houses have joined other “safe investments” as a lesson in risk management.  The advantages of diversification remain clear as some mainland rental property values have fallen nearly 21% over the past year.

The city has hired a bill collector to pursue 20 owners of vacation rentals for violations of Ordinance 22-7.  The city first gives a violator 30 days to correct the deficiency, then has two months to pay the fine issued, and then the city sends a demand letter giving the violator three more months to pay.  71 of the 512 violations issued have reached the level of sending a demand letter.  A U.S. District Judge issued an order enjoining the city from enforcing the law claiming the new ordinance violates the U.S. Constitution.  The plaintiffs in the case claim in a January 20 letter that the city’s enforcement actions violate the preliminary injunction.  The city has not responded to the January 20 letter and a conference call to resolve the issue has been scheduled.

The Hawaii Department of Natural Resources (DLNR) continues to try and reverse course against shoreline hardening along the North Shore after years of giving emergency relief to owners whose houses are threatened by beachside erosion.  The latest involves an owner who was allowed to install rocks and “beach burritos” to protect his property starting in 2002.  The emergency barriers expired in 2020 and the state has found that the owner installed new material and contractors poured concrete to secure the rocks previously installed.  The state has fined the owner $188,000 over 18 months and the owner has appealed a rejection of his seawall permit.  The owner has operated the property as a vacation rental starting in 2015.

Chronic erosion is erasing most North Shore beaches

State legislators are turning to the visitor industry again for more revenue, this time in the form of blanket user fees to visit state parks, beaches, forests, and hiking trails.  The bill has the support of state departments and state funded nonprofits and has generated concern from the visitor industry.  The bill does not identify how a new law would be implemented and enforced while generating visitor confusion relative to beaches and trails that the state owns.  The goal of the bill is to generate funding to educate visitors and maintain the state’s vast environmental treasures.

Wet weather has delayed the state Department of Transportation’s Pali Highway repaving project on the Honolulu side.  Remaining work includes lower and upper paving, manhole adjustments, traffic signal detectors, re-installation of raised sidewalks, new markings, and new traffic signs.  Additional improvements include gutter and curb improvements and eliminating some U-turns at intersections.

The city has allocated $43.6 million to begin a project to refurbish the Neil S. Blaisdell Center, temporarily closing parts of the entertainment venue from July 2023 through June 2024.  The project will upgrade the center’s failing fire suppression system, replace air conditioning cooling towers, exterior roofing, above-stage grid structure, and repair concrete spalling.  The mayor announced the project stating that the upgrades of the 60-year complex are long overdue.  Will the state notice and focus its attention on the convention center’s roof?

Major renovations planned for Blaisdell Center

Honolulu’s Department of Planning and Permitting (DPP) proposed its 2024 budget and surprise, they are asking for more funding to dig out of its self-induced permitting hole.  The director calls for an across the board 26% increase for salaries for some unstated reason.  The director has also prioritized filling 60 of the 100 vacancies plaguing the department. Apparently, adding personnel is the only way the government can streamline their processes.  The Honolulu City Council just passed on its first reading a bill to allow a third-party to review and certify building plans.

The 75th Ranger Regiment, an elite Army unit who has deployed almost continuously over the past two decades to some of the most dangerous parts of the world, trained on Oahu during the week of March 27th to prepare for a new environment, the jungles of the Pacific.  The Rangers have operated most recently in Iraq and Afghanistan, and stated they have a lot to learn about operating in the Pacific Theatre.  The training had them land at Bellows Training Center and move carefully through the thick jungle as part of the Lightning Academy based in Wahiawa.

The U.S. Navy has approved a $2.8 billion Pearl Harbor Dry Dock replacement to replace Drydock 3 which will become functionally obsolete when the Navy retires its last Los Angeles Class submarine.  The dry dock was built in 1942 and its larger replacement will be able to service the newer Virginia class submarines and larger surface warships.  The project is estimated to take three years to complete.

US Navy to Construct New Dry Dock at Pearl Harbor

Hawaii Convention Center Attendees have a new activity to explore between seminars.  Guests can go spelunking in the stairwells due to the legislature’s failures to provide funds to fix the roof.  Stalactites have formed in a stairwell and the unmitigated water damage threatens the structural integrity of the convention center.  Last year, the legislature only approved $15 million towards a $64 million repair project and the bill expects to grow to $88 million by 2027.  Heavy rain on Sunday removed another 5 conference rooms from service and forced staff to put out bins to catch leaking rainwater during the final ceremony of Kawaii Kon, a three-day event celebrating Japanese anime, gaming, and illustration.

DLNR has pulled support for the $10 million cost of restoring Kaanapali beach to it width back in 1988.  A group of critics is concerned about damage to the reef from dredging up sand offshore and using public funds to restore a beach the benefits privately owned hotels along the famous stretch of Maui beach.  The legislature appropriated $5.2 million for the project and DLNR has been tasked with overseeing the project for the state.

The University of Hawaii (UH) Wahine basketball team repeated as the Big West Conference tournament champions and earned an automatic berth to the NCAA tournament.  The Wahine came back from a 15-point halftime deficit to beat UC Santa Barbara in the final seconds of the final.  The Wahine are seeded 14th in their region and are scheduled to play 3rdseeded Louisiana State University in Baton Rouge losing 73-50.  LSU’s depth and talent resulted in only two losses in the regular season, one to #1 ranked South Carolina and a second in an upset to #24 ranked Tennessee in the SEC final.

The U.S. Mint released a commemorative quarter for hula kumu legend, Edith Kanaka’ole, an award-winning composer, chanter, and master hula instructor who taught at Hawaii Community College and the University of Hawaii Hilo.  Here is a link to the U.S. Mint.

Edith Kanaka Ľole Quarter

A football field sized space object was discovered by a Hawaii observatory as it passed through the solar system.  The comet, Oumuamua, became the center of wild theories due to its odd shape and the strange gasses it expelled.  Oumuamua means from afar arriving first which is appropriate since it is the first known object to enter our solar system from interstellar space.  The water rich comet traveled about 96,000 miles per hour and took a hook turn past the sun to continue its journey into the Milky Way.  Theories involving interstellar space craft originated from the comet’s gaseous propelled trajectory that defied gravity.

Scientists offer "compelling non-alien explanation" for enigmatic cigar-shaped object that zoomed past Earth in 2017

Hawaii loves to count wildlife and March 16th was the “Every Kolea Counts” event that occurred in Hawaii.  A webinar at noon talked about the Pacific Golden-Plovers, their habitats, and their behaviors.  The National Marine Sanctuaries hosted the event whose aim is to educate the community about marine wildlife in both formal and informal settings.

The state is moving forward to release millions of incompatible male mosquitos in Maui as a last-ditch effort to save a couple of species of Hawaii honeycreepers that are on the brink of extinction due to mosquito-borne avian malaria.  Conservationists hope the project saves the endangered birds and prevents additional honeycreepers from making the list.

A  52-acre lagoon park opened in Ewa Beach on Saturday, 3/25/2023, and includes Hawaii’s first deep water standing wave pool.  The $112 million complex includes three restaurants, a coffee shop and bar, two event lawns, boardwalk, firepit and terrace, and the Nalo Kai Club with private lounge.  The park replaces Haseko’s original plan to build a marina for the Hoakalei development.

One of Hawaii’s best known bottled water companies, Hawaiian Isles Water Company, has been shut down after filing for bankruptcy.  The bankruptcy judge has appointed a trustee to place the company’s equipment in storage proceeding a planned auction.

Tim and seven teammates traveled to San Diego and represented Hawaii in the Tom Fey USTA Tri-Level National Invitational on March 17th, 18th, and 19th.  Tim has attended about 15 national tournaments over the past decade and the teams usually finish somewhere near the middle of the pack.  March turned out to be different with the men’s Hawaii team taking the national crown finishing first out of 17 teams.

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