February 2022 Email Update
The January median sales price for single-family homes was $1,050,000 (18.9% higher than January 2021) and for condominiums was a record $510,000 (12.8% higher than January 2021). Affordability appears to limit median price levels as single-family home prices have settled $1,050,000 for five of the past six months and condominium prices eked out a small $10,000 increase of the previous record set in August 2021. Demand continues to exceed the new supply of resale homes and available inventory has dropped to 0.8 months of single-family homes and 1.6 months of condominiums. Tim and Tracey recently listened to a seminar where the speaker addressed the opposing forces of interest rates versus the scarcity of supply. Those forces seem to have reached a stalemate for the short term. Only time will tell if recently rising interest rates suppress demand by reducing buyers’ ability to afford real estate at record prices.
The Omicron variant of the COVID-19 virus has temporarily dampened visitor counts delaying Hawaii’s tourism industry recovery. Hawaii started the year with visitor numbers about 12% below 2019 numbers yet the percentage grew to about 30% below 2019 figures at the end of January as infection rates surged throughout the United States and the world.
Visits to the USS Arizona Memorial resumed on January 6th, 22 days after park officials suspended boat operations due to a damaged shoreside dock. Contractors delivered the repaired dock and installed the day before and a contractor is fabricating a new dock and it will install the dock later this year. Officials are monitoring the repaired dock to ensure continued safe operation. If you want more updates please click the link below:
Hawaii lost 10,358 residents from July 2020 to July 2021, 0.7% of Hawaii’s population. Hawaii only trailed Washington D.C., New York, and Illinois for districts and states losing the largest percentage of their population. Hawaii economist, Carl Bonham, noted over the past few years, Hawaii lost 30,000 residents which roughly equals the reduction in private workforce from 675,700 in February 2020 to 650,000 workers in November. The Hawaii Department of Business, Economic Development and Tourism DBEDT analyzed the people leaving and concluded kamaaina “leaving for the mainland are both younger and more educated.” It seems that those staying are old dummies like Tim.
The pandemic has not been kind to real estate investors on Oahu as government restrictions pummeled property owners by taking away the livelihood of many residents and then preventing landlords from evicting tenants who were not paying rent. Governor David Ige did not lift the eviction moratorium until after the legislature made it much more difficult to evict tenants by:
- · Defining when a tenant could be evicted based on how many months past due rent the tenant owed.
- · Stretching the demand period from five days to fifteen days.
- · Requiring mediation prior to an eviction hearing if the tenant requested it.
The governor’s stated goal was to prevent eviction efforts from overwhelming the courts and the new measures apparently have failed. One of Stott Property Management, LLC’s (Stott PM) clients must wait until May 19th before the court will consider evicting a tenant who currently owes $12,000 in rent and who has refused to move even after receiving legal written notice to vacate over three months ago. The judge ordered a second round of mediation even though a first one failed to produce an agreement. A second tenant who abused the eviction moratorium owes over $48,000 in past due rent and damages and the court has still not issued a financial judgement against the tenant despite months of effort. The lawyer Stott PM partners with summed up the current environment by saying, “the system is broken.”
The Honolulu City Council is again considering a bill that would alter the rules for short-term rentals by increasing the minimum stay from 30 days to three months unless the city issues a special permit. An amendment reduced the bill’s originally six-month minimum stay because temporary workers like traveling nurses stay for less than six months and might have trouble finding a place to live as a result. The proposed bill will only allow short-term rental operations in resort zoned areas like Ko Olina, Turtle Bay, Makaha, and parts of Waikiki. One individual Tim met late last year asked why Oahu residents just lay down and accept ever increasing restrictions and Tim responded stating the city council decides what they think is best regardless of the feedback given. True to form, most of the public testimony was against the measure, yet the city council voted to move the bill forward. Not surprising, the hotel industry supported the measure. A representative from Expedia asked why the city council considers the bill when the Department of Planning and Permitting never fully implemented the 2019 law regulating short-term rentals. Here's an official update:
The special attorney for the U.S. attorney general continues an investigation into allegations of law enforcement, elected officials, and their business supporters of conspiring to abuse their positions and punish their opponents. A federal grand jury probed campaign donations in late January and questioned a past city council member and U.S. congress member under oath about donations received by a Honolulu engineering executive and his family. The special attorney successfully prosecuted former Honolulu Police Department (HPD) police chief Louis Kealoha and his then wife, former Deputy Prosecuting Attorney Katherine Kealoha. Federal prosecutors delivered target letters notifying former city Prosecutor Keith Kaneshiro and two of his deputies that they were under investigation.
The special attorney recently indicted three top officials in ex-Mayor Kirk Caldwell’s organization allegedly conspiring to divert $250,000 in government funds to pay then-indicted Honolulu Police Chief Louis Kealoha in a retirement settlement. Federal prosecutors allege that the three convinced the Honolulu Police Department (HPD) to pay for the settlement out of funds to pay police salaries and then lie about the source of the deficit to use funds from a program using federal funding to fill the shortfall without involving the Honolulu City Council. One of the accused officials allegedly explained to HPD that they must conceal the source of the budget shortfall to avoid bringing the issue in front of the “nine bananas” (city council members). The decision to pay a settlement to the indicted police chief raised eyebrows at the time and the court eventually sentenced Kealoha to seven years in prison for conspiracy, fraud, and obstruction of justice.
The U.S. Navy has announced that it will begin draining the underground tanks at the Red Hill fuel storage facility in compliance with the state of Hawaii’s emergency order. The Navy has stated that it has already spent $250 million on cleanup efforts and housing military families that no longer had access to potable water in their homes. While the Navy is temporarily housing military families in Waikiki during the cleanup, residents in Ewa Beach’s Kapilina neighborhood are still stuck living in rental houses with fuel contaminated water. Rental managers initially told the residents the neighborhood consisting of former military housing did not receive water from the Navy’s contaminated Red Hill water shaft, but that information turned out to be untrue. Several residents experienced serious illnesses from drinking and bathing in the contaminated water. Residents have sued the San Francisco based company that owns Kapilina Beach Homes because they have been slow to release residents from their leases and have continued to charge rent in violation of the state of Hawaii’s landlord tenant code. Here's a small clip from Hawai'i Public Radio about this matter:
The University of Hawaii (UH) Board of Regents approved an updated master plan for the summit of Mauna Kea for the next twenty years that calls for reducing the number of telescopes from thirteen to nine by 2033. The board supported the construction of the controversial Thirty Meter Telescope (TMT) provided that a fifth telescope is retired. Most of the public comments during the meeting came from vocal Native Hawaiian activists who reject any plan that includes TMT construction. Attempts to restart construction will likely result in more protests and confrontation on the Big Island.
Proponents of continued astronomical activity on Mauna Kea’s summit highlighted astronomy’s $110 million contribution in direct spending and an overall economic contribution of twice that amount. Telescope operations have injected into the state’s economy over the past fifty years. Scientists fear that astronomy in the Northern Hemisphere will suffer a major blow if Hawaii removes the telescopes from the summit as some state legislators are considering. Limitations of spaced based telescopes still highlight the need for high altitude land-based infrastructure.
Maui’s Kaanapali Beach Resort is contending with the same beach erosion challenges as Waikiki and has teamed up with the state Department of Land and Natural Resources (DLNR) to fund a $11 million sand replenishment project. The beach is half the size that it was three decades ago and hope the project will restore the beach for the next twenty years. Contractors will collect the sand from an 8.5-acre sand deposit about 150 feet offshore and transfer the sand to the shore using a bridge system. Narrowing beaches will threaten infrastructure built close to the shoreline including hotels and roads. Here's a summary from Office of Conservation and Coastal Lands:
Who would have thought Hawaii would be running out of black cinder, a particular volcanic rock version that fountaining lava expels and then the rock cools before significant exposure to oxygen? Hawaii’s $80 million flower and nursery plant industry, landscapers, gardeners, and coffee farmers heavily use black cinder. Hawaii’s current commercial supplies are becoming depleted, and the state will pay a research team to search public and private lands for large deposits of black cinder. Regulators require farmers exporting potted plants from Hawaii to use black cinder as the planting medium.
Cultural site impacts and rising costs have doomed two planned solar farms on Oahu expected to produce electricity to power 57,000 homes. The solar farms included the two largest proposed battery systems storing electricity produced during the day to provide power during peak usage in the evening. Hawaiian Electric Company (HECO) must provide enough renewable energy to offset its planned September 2022 shutdown of Oahu’s coal fired main base-load power generator. The facility provides 16% of Oahu’s peak power needs.
The loss of starting UH football players to the National Collegiate Athletic Association (NCAA) transfer portal created a messy transition when UH Warriors head coach Todd Graham resigned on January 14th over player complaints about his leadership style. UH captains, quarterback Chevan Cordeiro and linebacker Darius Muasau, will be playing for different college football teams next year along with several other UH starters. UH first offered the position to previous head coach, June Jones, but wrote in his contract that UH could veto June Jones’ hiring decisions, require Jones to mentor his replacement, and step down in two years. June turned down the offer after reading the first few pages of the proposed contract. Mayor Rick Blangiardi, a former UH player and coach, publicly criticized UH leadership for failing to hire Jones. UH hired past UH quarterback, Timmy Chang, who accepted the position. Chang coached with June Jones and Southern Methodist University (SMU) and plans to install a version of the run-and-shoot offense that he thrived in when breaking the NCAA passing yardage record in 2004. June Jones was quick to voice his support for coach Timmy Chang and Chang expects to seek Jones’ counsel as he takes the reins. To learn more about UH Athletics please click the link below:
Sea Life Park is reopening its seabird sanctuary and rehabilitation facility after closing it for renovations in September 2021. The public will name the first two residents, a brown booby and a wedge-tailed shearwater. Conservationists release some birds to the wild after treatment and a health assessment while others become permanent residents due to chronic injuries. Permanent residents include wedge-tail shearwaters, a brown booby, a sooty shearwater, and a great frigate bird. You can read more about Sea Life Park’s conservation programs by clicking on the following link.
Humpback whale activity has been very active this winter with 278 whale sightings across the state from 9:00 to 9:15 am on Saturday, 1/29/2022. Cooler artic water temperatures have resulted in a larger number of whales making the trip to Hawaii’s breeding grounds. Tim and Tracey have spoken to friends who saw humpback whales outside of Kailua Bay as they were paddling in their one-man canoes. One individual quickly paddled away when spotting a calf without the mother to avoid separating the two and spooking the mother. To Tim and Tracey’s disappointment, they did not spot any whales when paddling outside Kailua Bay, but they do think they heard whale spouts while enjoying their time on the water.
Tim and Tracey just returned from a three-day weekend on Kauai and witnessed the increased whale activity firsthand while boating off the Napali Coast. They watched three sets of mothers with their infants and watched a newborn repeatedly breach as it played in the ocean swells. Weekend activities included a kayak and hike to a spectacular waterfall, and a hike through Waimea canyon. Tim and Tracey saw the same valley on the Napali coast from a ridge and from the water. The link below includes a short video of the adventures.