March 2021 Email Update
| Click to listen | The February median sales price for single-family homes soared to $917,500 (19.9% higher than February 2020), another record, and for condos was $457,500 (6.4% higher than February 2020). A lack of inventory continues to drive up sales prices as demand remains strong. The number of available single-family homes is 38.9% lower than the same time last year and the number of condos is 13.6% lower. The median days on market, the length of time it takes for 50% of the properties to go under contract, is a ridiculously low 9 days for single family homes and for condos has dropped to 18 days from a high of 40 days last summer. It is an extremely tough market for buyers.
The yield on the ten-year Treasury bills (T-bill) has risen roughly 0.75% over the past six months and 0.5% in February alone. Mortgage rates are heavily impacted by the 10-year T-bill yields because the average homeowner moves an average of every seven years. Mortgage rates rose 0.25% at the end of January and jumped 0.5% in late February. A mortgage interest rate increase of 1% raises the monthly mortgage payment about $50 for every $100,000 borrowed at current rates. At the current median prices on Oahu, that equates to a monthly mortgage payment increase of about $180 for a condo or $400 for a single-family home for a buyer obtaining a 30-year mortgage and putting a 20% down payment. Our website has a mortgage calculator that will calculate your monthly mortgage payment at different sales prices, mortgage rates, and terms. Follow the link below if you would like to estimate your monthly mortgage payments while searching for a home.
The University of Hawaii Economic Research Organization (UHERO) expects Hawaii’s economic recovery to start accelerating as national COVID-19 infection rates drop from their winter’s highs and more people become vaccinated. The economic damage from the pandemic related restrictions has been devastating with payroll jobs 16% lower than pre-pandemic levels. Household income is expected to fall this year as pandemic related support for the economy ends and tourism takes time to recover. The future is uncertain for many households that relied on government support to pay their bills through 2020. Here is a link to the public summary of UHERO’s report.
Governor David Ige has extended the statewide eviction moratorium for another two months and the state is preparing to distribute $200 million in federal aid towards rent relief. The most recently passed federal program allows both landlords and tenants the opportunity to apply for relief when the past program only allowed tenants to apply. Stott Property Management, LLC had several tenants that failed to apply for the first round of relief despite sending instructions to all struggling tenants immediately following the September rollout of the initial program. The state also announced that it will work with only one non-profit to distribute the funds when the previous program worked with both Aloha United Way and Catholic Charities to process the applications. The change will likely result in greater processing delays since the state struggled to provide tenants relief at the end of 2020 due to the large number of applicants. Governor Ige also announced that only the private sector will bear the brunt of the economic restrictions after he delayed furloughs and budget cuts that would affect state union workers. In a head-scratching bit of irony, he stated that the state would not implement an eviction moratorium for commercial property because it would unfairly favor one side. How does that same statement not apply to residential real estate? The governor subsequently extended the state of Hawaii’s eviction moratorium for failure to pay rent until April 13, 2021.
The governor has also resisted Lieutenant Governor Josh Green’s call to eliminate travel restrictions on United States residents that can show evidence of being vaccinated because “the science is still unclear.” Ige found himself on the wrong side of the “science” last year when he butted heads with Green who is a family physician and an ER doctor, and it appears that he just cannot resist keeping unnecessary government control over private citizens’ behavior.
The federal COVID-19 moratorium on evictions of tenants and forbearance protections for homeowners was extended through June 30, 2021. Homeowners with loans backed by the Department of Housing and Urban Development (HUD), the Department of Veteran Affairs (VA), and the Department of Agriculture may stay in their homes without paying their mortgages. Homeowners must resume their payments starting July 1st. The foreclosure moratorium is receiving some pushback as a federal judge in Texas ruled that the orders from the Centers for Disease Control and Prevention (CDC) temporarily halting evictions violates the Constitution. The judge ruled that Congress lacks the constitutional authority to grant the CDC the power to halt evictions nationwide and the order threatens to encroach on landlords’ rights under state law. Legal experts expect the ruling to be appealed to the U.S. Court of Appeals for the 5th Circuit. The judge did not issue a national injunction providing landlords’ immediate relief from the CDC order.
The Honolulu Star Advertiser runs a daily column by Christine Donnelly that helps citizens navigate the state of Hawaii’s byzantine bureaucracy. She has highlighted in February the struggle of many unemployed citizens to receive economic relief and victims of identity theft that the Department of Labor and Industrial Relations (DLIR) has yet to quantify. About 200 people protested outside the shuttered unemployment office on February 24th calling for the office to open to help the unemployed resolve issues with their claims. Governor David Ige has failed to make helping those suffering under his arbitrary restrictions a priority. DLIR’s glacial response to its failed information systems, continued understaffing of help lines, continued closure of its offices to the public, and refusal to address protestors’ reasonable grievances highlight the DLIR’s arrogance while failing residents in need.
A recent effort by Hawaiian Electric Company (HECO) partnering with Aloha United Way shows the sheer numbers and economic suffering caused by the restrictions placed on Hawaii residents and businesses. Hawaii News Now highlighted the new $2 million program, providing qualified residents with $750 to be used towards paying unpaid utility bills, on February 4th and the Kokua Line in the Sunday local section of the Honolulu Star Advertiser on February 7th. Aloha United Way started to take applications 8:00 am on Monday, February 8th, and the website had a message stating that the funds were depleted for Oahu and the Big Island when Tim checked on Tuesday, February 9th.
The island of Oahu moved to “Tier 3” on February 25th allowing gatherings of up to ten people, restaurants to operate at full capacity if operators maintain six-foot social distancing, indoor fitness classes with up to ten participants, and funeral services up to 25 people. Mayor Rick Blangiardi is working with Governor David Ige to modify “Tier 3” activities to allow for organized sports. Those changes are still a work in progress.
Mayor Rick Blangiardi released his fiscal 2022 budget that calls for no tax hikes or furloughs by freezing city and county hiring except for first responders. Blangiardi acknowledged overtime abuse by some departments, particularly the Honolulu Police Department that were funded by the federal Coronavirus Aid, Relief, and Economic Security Act. All city departments’ operating budgets will see reductions according to the mayor’s budget.
The Pacific Fleet Submarine Museum, previously known as the USS Bowfin submarine museum, opened on February 15th after a $20 million renovation. The museum memorializes the Pacific submarine force’s history through to the present day and consists of three main galleries, World War II, the Cold War, and the present-day fleet and fleet of the future. It is the last of the four Pearl Harbor attractions to reopen from the COVID-19 pandemic related shutdowns. The other three attractions are the USS Arizona Memorial, the Battleship Missouri Memorial, and the Pearl Harbor Aviation Museum. To learn more please click the link below:
Honolulu City and County’s announcement that it will remove the rusting metal platform at the top of Koko Crater to the surprise of non-profit partner Kokonut Koalition who had been providing the labor to repair and replace the deteriorated and missing tramway ties on the popular “Stairmaster from hell” trail. Photos show the rust and reason for concern and the project includes sealing off access to World War II era shafts, vents, and tunnels filled with dangerous debris. City Council Member Tommy Waters will investigate ways to provide a suitable alternative to the platform so that hikers can continue to enjoy the amazing view at the hike’s summit. To see pictures of Koko Head, please click the link below:
Kilauea’s fissure 8, the most prolific vent of the 2018 eruption, has a new name, Ahu’aila’au. The name refers to the altar of the volcano deity ‘Aila’au. Spouting lava 200 feet in the air at times, Ahu’aila’au was the main source of lava that fed a lava river that vaporized Green Lake, destroyed hundreds of homes, and filled in Kapoho Bay. It was the eighth of 24 vents that opened during the 2018 Kilauea eruption that is now marked by a 100-foot cinder cone.
Patch reefs in Kaneohe Bay were threatened ten years ago by from non-native seaweeds brought to Hawaii in the 1970s for experimental aquaculture projects. The seaweed escaped and spread when the projects were abandoned. A bio-control program breeding native sea urchins introduced by the University of Hawaii turned things around for Kaneohe Bay. Parent sea urchins are collected from local reefs and taken to a hatchery to spawn. The UH facility has as many as 15 million sea urchins growing at any one time and the young urchins are then planted where needed. The sea urchins are like goats feeding on the invasive algae that at one point grew as thick as two to three feet thick and smothered the reefs. A study in 2018 found that the sea urchins had reduced the invasive reef smothering algae by 85% and now are used to spot treat areas in Kaneohe Bay as needed. Kaneohe Bay is home to one of the only barrier reefs in the United States that shelters a wide variety of aquatic wildlife. UH plans on introducing the sea urchins to reefs off Waikiki Beach and officials in the Caribbean plan on using the strategy to protect their reefs. To learn more, please click the link below:
The University of Hawaii (UH) Rainbow Warriors volleyball team rose to the #1 ranking in the country after going undefeated during a four-game road trip over the last two weeks in February. The UH Rainbow Warriors look to finish as the top ranked team in the country after losing in the NCAA finals two years ago.
Love’s Bakery is closing its doors after almost 170 years in business. Hawaii’s largest bakery was already struggling when the COVID-19 pandemic restrictions reduced its revenue by 20% from lower restaurant, hotel, and other tourist-relates sales. The company was “seriously delinquent in rent” and failed to qualify for a second round of Paycheck Protection Program (PPP) funding. 231 employees will be laid off at the end of March and supermarkets are now scrambling to replace Love’s products that take up a significant amount of space in the bread and bakery section. Love’s delivers goods to 1,800 customers and bakes 400,000 loaves of bread weekly. To see pictures of Love's Bakery, please click the link below:
Pacific Links International has filed for Chapter 11 bankruptcy two years after hiring Tiger Woods to design his first Hawaii golf course. The company was doing business as Makaha Valley Country Club and partnered with a local developer to build 494 single-family homes and 152 condos around the country club and two golf courses. The company is seeking a buyer for the 644-acre property who currently owes roughly $600 million to various creditors. The Koolau Golf Course auctioned off its industrial lawn equipment on March 3rd after closing operations of the challenging 18-hole golf course in September 2020.