January 2019 E-Mail Update
Here is our 1/11/2019 e-mail update. It is sent after the statistics for the preceding month have been posted on the Board of Realtors website.
The December median price for single-family homes was $788,000 (5.1% higher than December, 2017) and for condos was $398,500 (1.6% lower than December, 2017). Demand in the form of the number of sales and pending sales continues to drop and supply continues to creep up compared to December 2017. The number sales for single-family homes dropped 28.3% and for condos dropped 4.6% while the number of pending sales for single-family homes dropped 23.7% and for condos dropped 12.7%. The number of active listings for single-family homes rose 17.3% and for condos rose 12.9%.
January 15th is the deadline for appealing your property tax assessment if you think that the market value that the city determined is too high. The assessed value must exceed the agreed upon market value by more than 10% for a successful appeal. You may either file your appeal online at www.realpropertyhonolulu.com or mail in your appeal. If you mail in the appeal, it must be postmarked no later than January 15th. The form can be downloaded from the forms section of the website.
The University of Hawaii Economic Research Organization (UHERO) predicts slowing economic growth over the next few years and sees no signs of an “imminent downturn.” The visitor industry will experience further gains in visitor arrivals but inflation adjusted spending growth will drop. Most gains will come from the Continental United States as a shrinking population will limit visitors from Japan and lower oil prices will affect Canadian numbers. China has not developed into a major source of tourism as many had hoped over the past decade. Hawaii has seen the departure of a large number of military personnel and personal income is expected to grow a meager annual rate of 1% over the next few years despite record low unemployment. That will result in negligible purchasing power even with low inflation.
Hawaii’s population shrunk by a little more than 3,700 people in 2018, the second straight year of declines. 12,430 residents left the islands for the mainland seeking better opportunities in states with stronger economies. Hawaii’s workforce continues to shrink even faster as Hawaii’s population ages and people retire from the workforce. Stott Real Estate, Inc. and Stott Property Management, LLC see this manifest itself most noticeably in the amount of time it takes contractors to start and finish their jobs.
Two fires that occurred on the same day in January reveal the risks of owning property that is not properly monitored or managed. One house in Palolo was owned by a trust and the sole occupant lived in the house without electricity and had broken out all of the windows according to the neighbors. The fire destroyed the house on January third and the occupant was taken to the hospital. The second house was abandoned and the owner had filed for a demolition permit but allowed squatters to move into the property. Ironically, the city had not approved the demolition permit that was filed in November. The fire could have been prevented had the demolition permit been quickly approved and the house torn down. Tim and Tracey have been involved with several properties that the owners through willful neglect have allowed their properties to fall into serious disrepair by failing to take corrective action against troublesome tenants or allowed squatters to take over a vacant home. The best security for a single-family home that is not owner occupied is renting it to a responsible tenant and having it managed by a competent individual.
Past Honolulu Police Chief Louis Kealoha and past Deputy Prosecutors Katherine Kealoha’s legal troubles have now ensnared Honolulu Prosecuting Attorney Keith Kaneshiro and two other deputy prosecutors. A Honolulu businessman has filed for an impeachment petition against Honolulu Prosecuting Attorney Keith Kaneshiro after media reports circulated that Kaneshiro received a target letter from federal prosecutors stating that he is a target of a grand jury investigation. The businessman has circulated a petition online and has collected 861 signatures eclipsing the required 500 signatures to submit a petition to the courts. The impeachment petition has been submitted to the Circuit Court and the judge will likely ask the state Office of Elections to certify the signatures. The first hearing was initially scheduled for January 8, 2019, but it has been postponed until February 14, 2019 because Kaneshiro has not obtained legal counsel. In a shocking display of arrogance, Kaneshiro failed to show up at a December 28, 2018 conference and a city deputy counselor only showed to repeatedly state that he did not represent Kaneshiro. The businessman who filed the petition was indicted twice for distributing sweepstake machines that Kaneshiro’s office deemed illegal gambling devices and seized the machines from arcades around Oahu. Katherine Kealoha had filed both indictments and state judges dismissed both indictments. The businessman is seeking the return of the machines and is also suing Kaneshiro, Kealoha, and the city for malicious and retaliatory prosecution. The businessman claims that he was the only person indicted because he was the only person to ask for the return of the machines. The impeachment process is likely to drag out for months since the city and state processes or poorly defined.
Mayor Kirk Caldwell’s comments during a news conference announcing the changes in building permit reviews at the Honolulu Department of Planning and Permitting (DPP) have caused concerns in the building industry that the city would deflect responsibility for the delays by blaming applicants and third-party reviewers versus taking a more customer centric approach and streamlining their processes and reviews. One contractor came to the conclusion that the mayor and DPP plan on reducing the backlog by simply rejecting applications. Some of the challenges that DPP faces are that their department is spread over five floors of a municipal building and their computer systems and inspection tools are antiquated. Tim and Tracey have experienced the permitting delays first hand for a simple six-foot moss rock wall at the front and back of their property. The wall was completed in July and the building permits have still not been closed. DPP stated that some “soil inspection” was still required before the permit could be closed.
The Honolulu Authority for Rapid Transportation (HART) hoped to gain some savings in 2015 by splitting up the build of nine stations in West Oahu and the original bids did come in about $43 million less than the lowest bid to build all nine stations. Change orders totaling $36.5 million have already been approved for delays and now having to inspect all nine stations at once (a charge directly attributed to splitting up the bids). Land acquisitions and condemnation for the rail project continue to be a struggle. HART has still not acquired the land from the Department of Hawaii Homelands in Oahu for the already built 43-acre operations center and the U.S. Department of Interior may not approve the land-swap for the city to own the property. The center was built even though former board chairwoman, Colleen Hanabusa, flagged the change in ownership as potentially a big issue in 2015. In some rare good news, the Federal Transit Administration (FTA) stated that the city and HART have met all the requirements to proceed with a review of HART’s recovery plan. If approved the project could secure the remaining $744 million of federal dollars committed to the project.
The Honolulu City Council opened 2019 with only eight of its nine members as the Hawaii Supreme Court asked election officials to respond to questions raised by Tommy Waters, who lost to Trevor Ozawa by 22 votes, and his supporters. The council has delayed its selection of officers since Ozawa was expected to become chairman.
A regional coordinator for the U.S. Interagency Council for Homelessness has reported that the state and county officials and law enforcement have stepped up their games to address homelessness since the “lawless days” of 2015 when the Kakaako encampment, one of the nation’s largest, was making daily headlines. The coordinator pointed out an example where a police officer in Chinatown worked with social workers to help move people off the streets and into shelters and where the state’s homeless coordinator arranged shelter space for a homeless couple who wandered into the state Capitol. While the coordinator sees improvement, the state and counties have much more work to do.
Hawaii’s homeless population dropped nine percent for the second straight year. Even with the drop in numbers, Hawaii still has the highest per capita rate of homelessness and Honolulu has the largest number of homeless when ranked against other smaller cities in the United States.
The City of Honolulu has hired security staff to close 59 parks nightly on Oahu to reduce vandalism and illegal homeless activity at night. The move comes after nighttime vandalism has destroyed many park bathrooms depriving the neighbors’ use of the facilities. Residents have expressed support for the measures after witnessing the endless cycle of vandalism quickly destroying repaired park facilities over the past few years.
The state Department of Health (DOH) concluded its investigation into the escape of Randall Saito in November of 2017 from the Hawaii State Hospital. Saito was committed to the hospital in 1981 after he was acquitted by reason of insanity for the shooting and stabbing death of a 29-year old woman in the Ala Moana Center parking lot. No state employee working during the escape was disciplined despite the fact that the staff did not call 911 until over eight hours after the escape. Former state Senator Jill Tokuda was incredulous that the report failed to detail how Saito got the means to escape and that no one was held accountable.
Anyone that has recently visited many of the state’s public schools recognizes the magnitude of deferred maintenance that has accumulated over the years. The Department of Education (DOE) could not even accurately account for the total price tag. The DOE reported a backlog early last year of $293 million and the figure has jumped to $868 million during a recent report. The report noted that 20% of the Hawaii schools are more than 100 years old.
About 20 Pearl Harbor Survivors and about 40 World War II veterans attended the ceremony commemorating the 77th anniversary of the Japanese attack on Pearl Harbor. The youngest survivor was 95-years old.
Four Pearl Harbor Nonprofits and the Hawaii Tourism Authority (HTA) have been paid to keep the Arizona Memorial open through January 11th while the partial federal shutdown continues. The nonprofits have spent about $18,000 per day from December 22nd through January 6th, another $11,000 per day for reduced operations through January 11th, and the HTA has contributed $126,000 to the effort.
Hawaii returned to the top spot as the nation’s healthiest state. The annual report examines behaviors, the community and the environment, policy, clinical care, and outcomes to measure overall health. Hawaii has been in the top spot six of the past seven years.
Howard Hughes Corporation officially opened a privately owned public park in December, one month ahead of schedule with the introduction of a light garden consisting of 2,300 artificial flowers illuminated by about 25,000 LED lights that react to visitors walking by and to wind and sound. The one and half acre park will eventually be expanded to three acres and with walking paths, shade pavilions, and water features and host community events like yoga classes and outdoor movies. Howard Hughes also completed construction on its third tower, Ae’o, in December and new owners started moving into the condos priced an average of $1 million.
Hawaii Gas commenced operations at its new $5 million biogas collection facility in Ewa Beach at the Honouliuli Wastewater Treatment plant. The system collects natural gas from sewage and is expected to generate about $1.6 million in annual revenue from biogas (methane) sales.
Maui Brewing Company opened its newest restaurant in Kailua on January 4th after several weeks of construction delays. The restaurant will offer 20 to 24 taps of beer and is the company’s fourth restaurant. Tim has been eagerly awaiting the opening of the restaurant since a sign went up in December promising a late 2018 opening.
Some parasailors received a scare on December 12th when a military training jet splashed down in the ocean nearby after the pilot ejected from the aircraft. The pilot was taken to the hospital and received back surgery the following day. The cause of the crash is under investigation.
A two-toed sloth gave birth to her fourth baby at the Honolulu zoo. The Honolulu Zoo participates in the Association of Zoos & Aquarium Species Survival Programs and the two-toed sloth is part of that program. Live births of sloths are pretty rare at zoos. Mother and baby were seen moving pretty slowly after the delivery.
A 32-year old monk seal named Lambchop passed away in December, one of the oldest known Hawaii monk seals. Rescuers brought Lambchop to Sea Life Park in 1987 as a severely emaciated two year old and nursed back to health by park officials. She contributed to the development of the morbilli-virus vaccine. The morbilli virus killed tens of thousands of seals worldwide since the 1980s. Lambchop was a fan favorite at Sea Life Park for three decades.
A record 30 Hawaiian monk seal pups were born in the main Hawaiian isles this year creating excitement among beachgoers. Eight of the pups were born to first-time moms.
About 25,000 people participated in the 46th annual Honolulu Marathon in December. Two Kenyans won the men’s and women’s race this year.