December 2020 Email Update
The median price in November for single-family homes was $872,500 (9.8% higher than November 2019) and for condos was $420,000 (1.2% higher than November 2019). The number of single-family homes sales was 5.6% higher than last year while the number of condo sales dropped 6.2%. There is still only 1.8 months of single-family home inventory and condo inventory stands at 3.8 months. The lack of single-family home supply continues to constrain the market and at least half of the single-family homes receive multiple offers within days of going on the market. It appears that the governor’s emergency proclamations are one reason for the limited supply since Tracey has spoken to several would be sellers who are waiting until they can have their tenants move so that they can sell their investment property. Governor David Ige has extended the state’s moratorium on evictions of tenants who have failed to pay rent or have become holdover tenants until December 31, 2020.
Kapolei landlords have new competition as Alakai Development has released its first phase of apartments to new tenants in its 318-unit rental project named The Element. The first eighteen apartments have already been leased. The project will have a mix consisting of 80% market rate rentals and 20% “affordable rentals” for households making no more than 80% of the median income. To learn more please click the link below.
The Hawaii Tourism Authority (HTA) has predicted that hotels will not return to profitability in 2021 due to the slower than hoped for return of visitors to Hawaii. November 2020 passenger numbers to the state are running about 25% of the totals for 2019. Only 1,000 out of the 8,000 unionized hotel workers are currently working with an estimated 75% of the hotels currently open. HTA estimates that occupancy rates will be about 46% at the end of the next year, lower than the 50% to 60% occupancy rates needed to break even. Vacation rental owners may want to adjust their forecasts lower based on the latest projections and determine if they can absorb the negative cash flow for another year.
The Kauai mayor temporarily paused Kauai’s participation in Hawaii’s Safe Travels pre-travel testing program due to rising COVID-19 infection numbers on the island with the governor’s approval. He fears that with only nine intensive care unit (ICU) beds, county resources are insufficient to treat a sustained rise of patients. The mayor’s actions prompted the closure of The Grand Hyatt Kauai Resort & Spa which employs about 900 people and the Sheraton Kauai. Both hotels will remain closed until sometime next year. The Maui mayor is also considering changes to the program and CVS recently warned that surging numbers in the rest of the country will prevent it from guaranteeing a turnaround time to travelers hoping to avoid the 14-day quarantine.
Roughly eighty people gathered in front of Honolulu Hale on November 11th to protest Mayor Kirk Caldwell’s restrictions on organized outdoor team sports. Supporters of organized sports argue that the long suspension has taken a mental and physical toll on both children and adults, that the community should be able to play sports if college athletes are allowed to compete, and that there has been no evidence that outdoor sports contribute widely to the spread of the virus. Thousands of individuals have also signed an online petition to try and emphasize to Mayor Caldwell and Governor Ige the importance of sports and exercise to the well-being of children. Organized outdoor sports are currently lumped together with bars as high-risk activities that must remain on hold until the daily counts of new cases fall below 20 per day. The administration contends that restrictions address the high risk of “uncontrolled and unmasked activity” related to organized team sports. Meanwhile, the state’s lead epidemiologist states that her contact tracing team has found that most of the community spread occurs within households and during small household gatherings, not outdoor activities.
The Honolulu Police Department (HPD) has suspended the use of a special COVID-19 enforcement team and has acknowledged that 59 officers have racked up at least 130 hours each in overtime over the past month in violation of department policies. A report by the Caldwell administration reported that $16 million of the $17 million in CARES funding that could be spent by Oahu for overtime went to the police. Meanwhile, the prosecutor’s office has declined to prosecute, or a judge has dismissed more than 58,000 of the 60,000 citations issued by the police who were enforcing Mayor Kirk Caldwell’s arbitrary COVID-19 restrictions during the pandemic. It appears that the special COVID-19 enforcement team has turned into a very expensive public harassment campaign against the very same people that will be paying the tab. One notable exception is that the city prosecutors are continuing to prosecute U.S. Surgeon General Jerome Adams for allegedly violating Mayor Kirk Caldwell’s emergency order in August when he was out here to help the state get their struggling testing program up in running. Adams’ attorney stated that “this case continues to be an embarrassment to this state and the good people of Hawaii.” Ironically, the police officer that cited the U.S. Surgeon General is one of the officers being investigated of overtime abuse. Apparently, Jerome Adams’ violation was much more egregious that the other 58,000 cases that have been dismissed.
Mayor Kirk Caldwell teamed up with the Honolulu Authority for Rapid Transportation (HART) Board Chairman and the City Council Budget Chairman to bypass HART CEO Andrew Robbins and submit a preliminary recovery plan to the Federal Transit Administration (FTA) in the hopes of keeping $250 million in federal grant money for the long delayed and extremely overbudgeted rail project. The cost projections submitted estimate the rail project to cost $11.2 billion ($10.2 billion in construction costs and another $1 billion in financing costs), $1.1 billion higher than the estimate provided by HART one month earlier. The total cost of the project is now projected to be more than double the $5.3 billion dollar price tag sold to Honolulu residents by Caldwell and then Mayor Mufi Hanneman back in 2008 and will finish fourteen years later than the originally projected completion date.
Honolulu’s Department of Planning and Permitting (DPP) approved a controversial renovation and extension of a century old seawall as part of a sprawling compound being developed by Marty Nesbitt, chairman of the Obama Foundation, for President Barack and Michelle Obama. DPP authorized a setback variance that have allowed developers to get around policies designed to protect Oahu’s beaches according to critics. Oahu has lost one quarter of its beaches to seawalls that essentially drown beaches over time. The DPP Director decided that failing to renovate seawall would create a hardship on the property owners depriving them of “reasonable use of the land.” Critics point to the fact that hardship cases are typically given out to property owners trying to protect existing homes. In this case, Nesbitt and the Obamas bulldozed the structures on the site and started construction of new homes prior to applying for the shoreline setback variance. Hawaii’s Department of Land and Natural Resources (DLNR) controversial emergency authorization of “temporary sandbags” to protect oceanfront homes has also contributed to Oahu’s accelerating beach erosion on the east and north shores of Oahu. The state originally issued a couple of emergency permits to allow homeowners to come up with long-term plans to move their homes and have failed to follow up and enforce the removal of those sandbags. Some of these temporary measures have been in place for more than 15 years and have enabled homeowners to sell their property at market prices for oceanfront property making future economic and environmental damage more painful. To learn more please click the link below.
| President Barack Obama's Hawaii Beach House Being Built on Idyllic Site of 'Magnum, P.I.' Mansion |
The United States Navy issued a notice for industry feedback to retrofit one of Pearl Harbor’s three submarine drydocks and build a fourth drydock to support the submarine forces growing attack-submarine needs in the Pacific to counter China. Dry Dock 3 is only 497 feet long and can’t support the Navy’s newer Virginia-class submarines that are longer than the older Los Angeles class-submarines (377 feet versus 362 feet) and larger (displace 7,800 tons versus 6,900 tons). A new payload model for future Virginia-class submarines will add 84 feet in length and enable the submarine to launch an additional 28 Tomahawk missiles from four vertical launch tubes. The project forecast calls for dredging 250,000 cubic yards of dirt and use more than 200,000 cubic yards of concrete. The U.S. Navy estimates the project will cost between $2 billion and $4 billion dollars.
Former Deputy Prosecutor Katherine Kealoha was sentenced to 13 years in prison and ordered to pay $455,685 in restitution and her husband, former HPD chief Louis Kealoha to seven years in prison and ordered to pay $238,199 for efforts to steal proceeds from Katherine’s grandmother and framing her uncle, and for stealing money from two children for whom she was responsible for managing their finances. Two Honolulu Police Officers were sentenced for trying to frame Katherine Kealoha’s uncle with a staged mailbox theft using HPD resources.
Oahu’s largest and most popular farmers market held at the Kapiolani Community College (KCC) reopened on November 7th after an eight-month hiatus. About sixty vendors set up booths and hundreds of customers checked out the produce while observing social distancing and wearing masks. The KCC Farmers Market discouraged eating on the premises to discourage crowding and the lack of tourists also tempered the attendance. Several local farmers have pivoted to farmers markets as their main source of business as restaurants serving local produce are serving fewer customers, or have shut down. Some of the vendors expressed disappointment that the crowd was not as large as usual and hope attendance will improve as word gets out to more residents and the visitor count grows.
The nation’s third oldest continuously operating community theatre has started building a new venue to replace the 87-year-old Diamond Head Theatre building in 2022. The new state-of-the-art theatre has taken 13 years of planning followed by fundraising and permitting. The $24 million facility will maintain a roughly 500-person seat-capacity, have a bigger stage, larger seats, more bathrooms, better air conditioning, larger dressing rooms, and additional classroom space. The theatre started in 1915 as the Honolulu Community Theatre and the successor organization, Diamond Head Theatre, started performing in its current location in 1952. The current building was originally built in 1933 to show movies for Army personnel stationed on Oahu and lacks the infrastructure most commercial theatres have. To learn more please click the link below.
| Diamond Head Theatre expects to complete theatre redevelopment by 2022 |
Puna Geothermal resumed electricity generation November 5th, 2020, more than two years after the May 2018 Kilauea eruption buried three of the geothermal well-heads. The site had been generating about 38 megawatts of electricity prior to the eruption and the plant is currently generating about one to two megawatts of electricity with 15 megawatts projected by the end of the year. The plant had previously helped the Big Island generate 60% of its electricity from renewable sources and that figure fell to 35% after it was forced to shut down.
Hawaiian Islands Humpback Whale season officially starts in November and the first humpback whale was spotted off Maui on October 8th. Scientists and environmentalists are hoping for a rebound in sightings and recorded whale songs after several years of decline. The numbers of returning whales to the island chain has grown from an estimated 895 mammals in the late 1970s from 8,000 to 12,000 today. Commercial whaling was banned in 1971 and the number of whales has been growing about 6% per year. Hawaiian Islands Humpback Whales were taken off the endangered species list in 2016. Biologists have been puzzling over the lower numbers recently and hypothesize that El Nino, a warm phase in the Pacific Decadal Oscillation, and an extreme marine heatwave known as The Blob disrupted the nutrients that krill eat forcing the whales to look elsewhere for food.
A nationwide status report on U.S. coral reefs reported that Hawaii reefs are in fair condition but declining with greater degradation near higher populated Oahu due to greater damage from fishing and pollution runoff from the island. Oahu’s reefs were labeled as impaired and the Northwestern Hawaiian Islands were still only rated as fair due to rising ocean temperatures. The reef scores ranged from very good, good, fair, and impaired and the study evaluated the reefs using four categories: corals and algae abundance, reef fish populations, influence of climate on coral reefs, and human connections to reefs. Frequent and severe bleaching events, stressed corals expel algae living in their tissues when the water is too warm, are known to greatly undermine coral reef ecosystems.
DLNR has stopped renewing and issuing commercial licenses for aquarium fishing without a required environmental review following a recent Circuit Court ruling. The judge found that DLNR was violating the law by allowing aquarium fishers to remove hundreds of thousands of marine animals from Hawaii’s reefs without an environmental review.
The University of Hawaii (UH) Warrior football team has had an up and down three-win, four-loss season against their conference foes with all opponents currently having more wins than losses except winless New Mexico. UH recently lost to unbeaten San Jose state after beating then undefeated Nevada at Aloha Stadium on Thanksgiving weekend and suffering two losses against undefeated Boise State and 3-2 San Diego State. The UH basketball team is currently sitting on the sidelines as the COVID-19 pandemic has voided its first three non-conference games when the NCAA delayed the start of the season and the Diamond Head Classic was relocated to Florida.
Hanauma Bay reopened to the public with a new daily limit of 720 people per day to see if a balance can be found between conservation and public access to one of Oahu’s ocean treasures. Tim and Tracey decided against visiting this past weekend when they heard that wait times were up to two hours first thing in the morning. To learn more please click the link below.
| Hanauma Bay is Reopening -- But Capacity Will Be Limited |
Dole Plantation, the most visited Hawaii attraction in 2019 with 1,975,980 guests, reopened on November 12th. The facility temporarily closed when the 14-day quarantine was put in place by Governor Ige. Its current hours are Thursday through Tuesday from 10:00 am to 4:00 pm and will be closed on Wednesday to allow for deep cleaning
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