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August 2022 Email Update

The July median sales price for single-family homes was 1,107,944 (11.6% higher than July 2021) and for condos was $500,000 (5.3% higher than July 2021).  Higher interest rates and a lack of available homes continue to hobble the market with the number of single-family home sales and condos both declining 22.8% compared to the number of sales last year in July.  There is only 1.6 months of single-family home inventory and only 1.7 months of condo inventory.  Lower demand in terms of the number of contracts in escrow (34.8% fewer single-family home contracts and 34.1% fewer condo contracts) has resulted in some buying opportunities.  Tim and Tracey have shown a few Kailua homes over the past couple of months that would have received multiple offers a few months previously.

Stott Real Estate, Inc. has heard some promising anecdotal evidence that the market may be loosening up.  Some parts of the country are cooling faster than Oahu presenting investment opportunities for some Oahu investors to conduct an exchange to a mainland property.  Tracey recently put an Ewa Beach house on the market after their client finally found a replacement property near him in California.  The client plans on conducting a 1031 Exchange to defer his capital gains taxes and generate higher cash flow.

ACT 57, Hawaii’s modified eviction law, expired on August 6, 2022, providing a relief for landlords who have received the brunt of pandemic related burdens imposed by Governor Ige and the state legislature.  The law was passed to prevent the courts from becoming overwhelmed by landlords seeking relief and failed to do so.  The courts and legislature essentially delayed the landlord’s ability to regain possession of a home where a tenant has failed to pay rent.  This law in tandem with Governor Ige’s eviction moratorium cost one of Stott Property Management, LLC’s clients close to $50,000 in damages.  The judge involved with the case has still refused to rule on a financial judgement over nine months and jeopardizing the landlord’s ability to mitigate the financial damage.  The time the landlord can demand payment has been reduced to five days from fifteen days and mediation is no longer required.  Mediation may still be appropriate in some cases since the mediators have direct contact with the rental relief organizations and can help landlords receive past due rent.  Landlords can request mediation after mailing the five-day demand letter by using the link below and filling out the form.  Mediation sessions are currently conducted using Zoom so landlords and tenants do not have to be on Oahu to participate.

The Mediation Center of the Pacific, Inc.

Hawaii’s tourism industry relies on repeat visitors and the number of arrivals could decline based on visitor responses to a recent survey.  4.1% of West Coast visitors and 6.6% of East Coast visitors are unlikely to return for a vacation in the next five years and the cost of a Hawaii vacation is the primary reason, and wanting to go someplace new ranked second.  An individual spends $700 more on a Hawaii vacation today than in 2019.  Expected August visitors is off by 10% and 25% fewer visitors arrived this summer than in 2019.

A fire code violation contributed to releasing over 19,000 gallons of fuel oil making its way into the Navy’s Red Hill drinking water system.  The contractor installed PVC piping instead of steel piping throughout the fire suppression system and replaced only a small portion of the piping in 2017 when the error was discovered to save money.  A worker crashed the passenger cart train into the pipe, cracking one of the PVC valves.  A report cited a long list of operational, maintenance, and management failures that contributed to the disaster.

Petroleum found in a water quality monitoring well raises the concern that the contamination is migrating to other sources of Oahu’s water supply.  The migration is headed in a direction that officials did not expect and has placed Oahu’s southern neighborhoods at risk of shortages.

Hawaiian hospitals urged Governor David Ige to establish an emergency proclamation suspending Hawaii’s licensing laws to relieve the shortage of nurses and physicians.  The Hawaii Department of Commerce and Consumer Affairs (DCCA) has been struggling with staffing shortages of its own resulting in processing delays of up to three months.  The continued need to use emergency proclamations to support basic operations should be a concern for Ige and the legislature, yet he had no comment on the licensing issue.  Hawaii is one of four states that requires out-of-state practitioners to be licensed by the state before they can start working.  Other states offer temporary licenses issued within one to three business days.

The National Science review launched a full environmental review of the Thirty Meter Telescope project that could bring hundreds of millions of dollars in funding to the islands.  The leading funder of scientific research will hold a series of meetings from August 9th through August 12th to engage the public regarding the effects of TMT.  The opponents are not moved by the gesture and will oppose any efforts to add another telescope on the summit of Mauna Kea.  While the review appears to be a positive step forward, the fund could cut off U.S. involvement in the project at any time. You can learn more about TMT by clicking the link below:

TMT INTERNATIONAL OBSERVATORY

A Waikiki vendor, Pacific Island Beach Boys returned one of the Waikiki pavilions back to the city due to vandalism, crime, and homelessness.  The city has failed to contain the fallout from COVID-19 shutdowns and homeless people have remained free to take over the spaces in the middle of Waikiki. 

Waikiki has initiated a new program in response to the rising lawlessness.  “Safe and Sound Hawaii” has received $350,000 in city funding to work with the Honolulu Police Department (HPD) to coordinate law enforcement and social services activities from the Yacht Harbor to Diamond Head.  A mental health advocate has predicted rising violence since two 7-11s have had their windows broken on a monthly basis and people gather to drink and do drugs.  Neighborhood advocates have responded with dismay to one 7-11 promotion for four mini-bottles for $4.

Honolulu’s failing Department of Planning and Permitting (DPP) has claimed another victim in popular Honolulu Brewpub, Stewbum & Stonewall Brewing Company, which waited two years for a permit and another year for Hawaiian Electric Company (HECO) to provide the necessary power.  The establishment had been in business for five years and just could not dig out of the hole created by the pandemic and city red tape.  The closure is a blow to Chinatown’s comeback as the neighborhood tries to clean up the mess created by homelessness.  The brewery is up for sale and the founders hope someone can make use of the turnkey operation under another name.

A historic south swell brought 20-foot waves to Hawaii, originating from winter storms in the South Pacific.  Lifeguards conducted 1,960 rescues over the weekend and crews are assessing damage to homes, businesses, and roads.  Mala Tavern in Lahaina was flooded by large waves and huge waves swept over two-story condominium buildings at the Keauhou Kona Surf & Racquet Club on the Big Island.  Here is a link to a video of waves disrupting a wedding reception.

Big wave crashes wedding reception in Hawaii

Rocky the seal returned to Waikiki and gave birth to her 14th pup on Saturday, 7/9/2022.  The new boy seal was found playing in the sand near his mother at Kaimana Beach.  Rocky was born on Kauai and has given birth to all her offspring on Kauai until she gave birth to Kaimana on Kaimana Beach in Waikiki in 2017.  The pup, also named Kaimana, entertained visitors for weeks.

Beachgoers were reminded of the dangers of sharing space with a nursing Hawaiian monk seal when a swimmer was attacked by Rocky on Tuesday.  The victim gave Rocky and her son plenty of space, yet the mother swam up behind the unsuspecting woman and attacked her causing surface lacerations on her cheek and shoulder.  The swimmer will not be fined because she stayed 150 yards away from the pair of seals until Rocky initiated the contact.  Lifeguards have increased the buffer around Rocky and her pup after she chased a man carrying a toddler out of the surf on July 9th.

 

'Rocky' the Monk seal attacks swimmer at Kaimana Beach

A University of Hawaii scientist has successfully grown a tropical sea urchin from a cryopreserved embryo.  Sea urchins are grazers and reduce algae cover and maintain the balance needed for coral to live in tropical waters.  The sea urchin is a Hawaiian species that lives in depths of 7 to 100 feet.  The embryos were raised on a diet of phytoplankton during the larval phase and one of the tiny organisms settled on the glass of a laboratory beaker as a baby urchin.  The Oahu hatchery where the scientist works on Coconut Island, has raised hundreds of thousands of sea urchins that have helped consume hundreds of acres of algae on Kaneohe Bay’s threatened reefs.

Hawaii County (The Big Island) passed a law in August banning chemical sunscreens that do not contain either zinc or titanium oxide to protect coral reefs.  Hawaii County follows Maui County in limiting the sunscreens to mineral based.  The state of Hawaii banned the sale of sunscreen containing oxybenzone and octinoxate but did not ban the use of the sunscreen.  The new laws passed on The Big Island and Maui takes the ban one step further in prohibiting both the sale and the use of non-mineral sunscreens.

Take a look at our Another Day in Paradise's Video

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