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July 2024 Email Update

Here is our 7/10/2024 e-mail update. We send the newsletter after the Honolulu Board of Realtors posts the preceding month’s statistics on their website. You can read past newsletters by visiting the link below.  Our quarterly newsletter includes valuable real estate information not included in our monthly updates

Past Newsletters
You may also listen to our Monthly Newsletter from our recently created podcast, Real Estate Tips of the Day & Quarterly Real Estate Articles by clicking the link below:
Stott Real Estate, Inc. Podcast

The June median sales price for single-family homes was $1,120,000 (6.7% higher than June 2023) and for condos was $530,000 (3.9% higher than June 2023). Constrained single-family home inventory continues to drive rising sales prices even with mortgage rates making homes less affordable. The median sales price for single-family homes fell just short of the record set in August 2022. Demand for single-family homes grew with 4.0% more houses selling and pending sales growing 9.5%. Demand for condos is dropping with 24.5% fewer condos selling and pending sales dropping 7.2% compared to June 2023. High sales prices have encouraged sellers resulting in 7.9% more single-family homes to choose from and 49.2% more condos. There is currently 3.0 months of single-family home inventory and 4.7 months of condo inventory.

The Oahu rental market appears to be returning to its pre-pandemic conditions with a growing inventory of vacant units for the first summer in five years. Stott Property Management, LLC had a larger number of tenants vacate at the end of May and June and move to the mainland. Companies emphasizing office work may be impacting the Oahu rental market by removing a percentage of tenants working remotely. Available inventory is growing on Oahu requiring landlords to compete for qualified tenants. Stott Property Management is seeing an increasing number of approved applicants deciding to rent other properties. Landlords should remember that potential tenants are looking at multiple properties when deciding and offering the best value is often critical to filling a vacancy.

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

Monthly Statistics

A June 9th front page article in the Honolulu Advertiser has a headline, “Low-income rental tower mostly vacant after October opening.” The article mentions the developer has lowered the asking rents for studios with about three hundred square feet of living space from $1,375 to $1,210 over the past eight months. The city reserves the 210-unit building for residents over fifty-five and only has thirty-four parking stalls available on a first-come first served basis. Reserving the units for people making $58,500 to $66,840 is the only part of the program that is low-income. Stott Property Management, LLC rents Waikiki studio apartments with parking and superior amenities (pool, gym, etc.) for $1,300 and $1,400 per month. To date, the city’s “affordable housing initiative” simply allows builders to bypass some building ordinances and offer low-income people market rate housing. There is nothing currently affordable about the city’s affordable housing. The City and County of Honolulu are pushing this program on other Oahu neighborhoods who resist due to the lack of off-street parking resulting in more street congestion.

The Department of Land and Natural Resources (DLNR) cited a Kahala beachfront property for unauthorized structures and materials previously on the property and have subsequently collapsed into the ocean. The Honolulu Department of Planning and Permitting (DPP) cited the owner for illegal geotextile fabric, chain-link fence, and cable fence in a setback area. DPP did note there is a 1992 permit for a cable fence in 1992. DLNR states the owner modified the fence as an unauthorized erosion control device. The owner had 21 days to remove the violations or could face fines up to hundreds of thousands of dollars. Ocean-front owners and potential ocean-front owners should note the city and state are getting more serious about enforcing violations resulting in shoreline degradation and/or destruction.

A June 23rd front page article in the Honolulu Star Advertiser highlights Hawaii’s continued failure to recognize legally permitted building of resort and condo-resort projects to try and force investors to rent their properties as workforce housing. Maui County is working on legislation to “ungrandfather” about 7,000 properties that received resort developmental approvals prior to 1989 in apartment zoned areas. The article methodically steps through the 1970 developments and their target markets. The new legislation was the brainchild of Governor Josh Green who helped push through Senate Bill 2919 allowing counties to “phase out” transient accommodations in any zoning district by county zoning regulations. The new state legislation provides cover for state and county officials who have failed to allow enough building over the last two decades resulting in a workforce housing crisis. The Maui Mayor recognizes owners will challenge the proposed legislation in court for violating the U.S. Constitution unless the county compensates the property owners for losses created by the proposed legislation. Unfortunately, state and county lawmakers would rather go to court to take away legally permitted business activity instead of allowing developers to build the housing Hawaii sorely needs. The article points out that even if the mayor and councilmembers prevail, the goal of affordable workforce housing will prove elusive, and the financial hit on county finances due to a loss of taxes from vacation rental related activity will be counterproductive. A well-known Hawaii economist, Paul Brewbaker, weighed in estimating 15% to 20% of all jobs on Maui would be at risk if the measure passes considering the multiplier effect vacation rental activity brings to the economy. Brewbaker noted the increased supply of rentals would come with an increased number of tenants that could not pay the rent. Vacation rental owners on Oahu should take note since Oahu has a similar problem with unaffordable housing and the City and County of Honolulu has rewritten the rules twice on previously legal business behavior.

Oahu residents have grown used to resetting the clocks in their home after brief power outages over the years. Recently, reliability is becoming more of a concern due to the aging infrastructure in Hawaiian Electric Company’s (HECO) grid, eliminating fossil fuel-based baseline power before reliable “renewable” power has been put in service, and most recently, HECO’s plan to shut off power in areas subject to wildfires when dangerous conditions exist. A Kokua Line inquiry to Honolulu Star Advertiser columnist, Christine Donnelly, mentioned six power outages in Waipio Gentry in April and May related to faults in underground power lines connected to overhead power lines subject to HECO’s new wildfire safety settings. HECO, the Public Utilities Commission (PUC), and Waipio’s state representative failed to respond to the resident, yet HECO finally responded to Christine Donnelly to avoid further embarrassment. HECO has announced starting July 1st, it may shut off power to about 2,700 Oahu residents, on the Leeward Coast, if weather conditions significantly raise the wildfire risk. Other areas include residents 45,400 residents on Maui and the Big Island.

Downtown Honolulu lost electricity for nine hours on June 13th before HECO restored power around 8:00 pm. The initial outage damaged an underground cable feeding power to the downtown area resulting in a substation becoming overloaded and shutting down. Downtown Honolulu receives power from underground cables installed in the 1960s and 1970s and most of the original cables are still in operation. A fire burned four underground circuits involving twelve high-voltage cables causing a second blackout within a week affecting residents and businesses in Chinatown for three days.

Power outage affects more than 2,800 customers in Downtown, Nuuanu

A new 42-megawatt solar farm with battery backup started sending power to HECO’s electric grid on June 7th. The 120,000 solar panels and batteries are located on leased land from the U.S. Navy on the Ewa Plain and can store up to four days of electricity produced by the panels. Illegal dumping marred the land and the project involved removing more than twenty tons of junk and sixty-six tons of scrap metal including abandoned cars, boats, appliances, tires, and construction waste. Grazing sheep will control the grass around the solar panels.

The Rim of the Pacific Exercise (RIMPAC), the world’s largest recurring naval exercise, began on June 27th and runs through August 1st. The multinational exercise involves forty warships from twenty-nine countries including the United States. With the aircraft carrier, U.S.S. Carl Vinson, as the flagship, the different navies will work through language barriers and different communication systems to coordinate activities in case there is a crisis requiring a multinational response, with or without the participation of the U.S. Navy. For instance, the Philippine navy assisted the Malaysian navy in a blockage when Islamic militants from the Philippines seized Malaysian territory. 

RIMPAC 2024 | Exercise Rim of the Pacific kicks off!

The Environmental Protection Agency (EPA) has started to try and disband the Red Hill Community Representative Initiative (CRI) after the CRI refused to bring in a mediator and establish ground rules for future meetings involving the U.S. Navy. The previous meetings to discuss the Navy’s Red Hill defueling plan have been contentious with federal officials complaining the CRI continues to go off topic and has been disrespectful while the CRI claims the Navy continues to dodge questions. The EPA met with the CRI on June 13th but officials from the U.S. Navy did not attend. During the meeting, the CRI accused the EPA of violating the consent order establishing the CRI and including the members in the defueling plan.

The U.S. Department of the Navy and National Parks Service turned over four hundred acres of land at Kalaeloa, formally known as Barber’s Point, to the City and County of Honolulu as part of the U.S. military’s Base Realignment and Closure act where the military turns over underused property to local communities. The land includes part of the shoreline, a campground, and cultural sites. The city does not currently have any official plans for newly acquired land.

The Honolulu City Council approved a resolution to cap the pay of council members to annual raises of 5% and prevent the city council from approving its own raises in the future. The resolution comes after the controversy surrounding the council members’ 64% salary increase in 2023 (three council members rejected the pay raise) and a March 19threcommendation from the salary commission to boost the pay an additional 3%.

The 2024 Festival of the Pacific Arts and Culture (FESTPAC) held its opening ceremony in the University of Hawaii’s (UH) Stan Sheriff Center with a formal parade of nations, traditional dances from Taiwan, performances from the Guam delegation, and hula kahiko performance (hula using traditional instruments and chants). Many people in the crowd had family or connections with the delegates from the twenty-eight participating countries and islands. The Tongan delegates were surprised by the number of enthusiastic fans who were Tongan children raised by Tongan parents in Hawaii. The ten-day cultural event which ended on June 16th, exceeded expectations with crowds five times the highest estimates attending the festivities.

The state Department of Transportation (DOT) announced it signed a 50-year lease with the U.S. Army to use Dillingham Airfield for civilian use, ending years of uncertainty for North Shore businesses. The airfield will continue to support military flight operations and ground maneuvers, and civilian aviation and sport parachute operations.

Columnist, Christine Donnelly, helped answer another question on Kailua residents’ mind by updating readers on the roundabout construction timeline by Kalapawai Market. The Honolulu Department of Transportation decided to take a summer break to prevent disruptive traffic delays during a busy visitor season. The final construction phase will begin after summer and the planned completion date is in February 2025. Construction workers uncovered Hawaiian ancestral bones, Iwi kupuna, and the contractor stopped work to allow experts to move the remains following strict Native Hawaiian protocol resulting in delays.

Eleven months after the wildfire destroyed Lahaina, the first Lahaina house has started construction. The U.S. Army Corps of Engineers have cleared 92% of residential lots and 31% of commercial lots of debris and toxic ash. The corps expects to complete the cleanup by January. The corps returns the lots back to the county when completing the removal allowing the owners to apply for new building permits. The Maui County of Public Works and Highways Division has been rebuilding the water and sewer systems aiming to complete access by the end of the year.

First home in Lahaina to rebuild

The Culinary Institute of America (CIA) partnered with the Culinary Institute of the Pacific (CIP) to create a five-day course at Kapiolani Community Center (KCC) which focuses on using Hawaiian-source ingredients in global cuisines. Chef Roy Yamaguchi, CIP Director, aims to raise the level of the Hawaiian culinary scene to attract more visitors and boost opportunities for Hawaiian residents.

Turtle Bay’s Kuilima Farm on the North Shore delivers eight hundred pounds of fresh produce weekly to the chefs at Turtle Bay Resort, sources makamai tea for guests, and rosemary and lavender for the spa. The solar powered aquaponics facility grows eight types of lettuce, 1,200 pounds per month, using 90% less water than soil grown lettuce and is free of pesticides. The farm is one of only thirty Hawaii farms food safety certified by the U.S. Department of Agriculture. The farm also sells produce to the public from a roadside stand and offers tours to educate visitors and residents on their farming techniques.

Caltech completed removing their submillimeter observatory from the Mauna Kea summit and graded the area to match the rest of the summit. Caltech will monitor the area over the next three years to observe document the return of local flora and fauna.

Kaiwi weaned Pa’aki, the latest Hawaiian monk seal pup to be born on Waikiki Beach according to the National Oceanic and Atmospheric Administration on June 12th. The mother seal will not leave the pup to forage for food while nursing for five to seven weeks. The mother will wean the pup when she uses up her energy reserves. Officials moved Pa’aki to a remote location on Oahu for the pup’s safety on June 13th after tagging her and immunizing her the previous evening at NOAA’s facility. The NOAA does not want to leave Pa’aki at the busy beach where she can grow accustomed to and eventually seek out human interaction. Fully grown seals can be dangerous.

Pa'aki, monk seal pup of Waikiki, officially weaned

Rocky, another well-known Hawaiian monk seal who also has raised pups on Waikiki Beach, has given birth to her 15thpup in a quieter public location, Sand Island State Recreation Area on June 20th. On June 24th, another monk seal was born on Mokulua Nui, one of the two small islands off Lanikai Beach. Officials have limited kayak landings permits to a small part of the beach at the “Mokes” while the pup nurses for the next five to seven weeks.

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

Another Day in Paradise: Windward Side 

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