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March 2024 Email Update

The February median sales price for single-family homes was $1,075,000 (8.9% higher than February 2023) and for condos was $512,500 (6.8% higher than February 2023). The Oahu real estate market appears to be recovering from the interest rate increases of 2022 and 2023 with both supply and demand showing modest growth. 3.5% more single-family homes sold in February compared to February 2023 and 2.8% more condos sold.  The number of new single-family homes available in February grew 26.6% and the number of condos grew 15.1% as more sellers are deciding to get off the fence.  There is currently 2.8 months of single-family home supply available, and 3.6 months of condo supply available.

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

Monthly Statistics

A new tenant screening law passed in the 2023 legislative session will go into effect May 1, 2024. The law requires landlords to limit the application fee to only cover costs associated with credit checks, criminal background checks, and obtaining information through personal reference checks. If requested, a landlord must provide the applicant a breakdown of the costs covered by the fee and return any excess charges. The link below provides Frequently Asked Questions (FAQs) for the new law.

FAQS FOR TENANT SCREENING FEES

Governor Josh Green is taking a page from a tired Hawaii playbook in blaming out of state property owners for the state woes instead of fixing the bureaucratic mess that stifles building new homes. Researchers and housing experts have repeatedly pointed to the fact Hawaii has the most heavily regulated residential housing industry in the country and it is primarily responsible for “Hawaii’s housing crisis.”  The governor is threatening to temporarily ban vacation rentals in West Maui if enough landlords do not offer Lahaina residents currently living in hotels a long-term lease. Green claims Hawaii has a housing crisis “because we’ve got 89,000 short term rentals in the state of Hawaii of which only 14,000 are legal. That’s 75,000 units in our state that are not available. If you recall, we’ve said on many occasions that if we had 50,000 units in our state available, our local people wouldn’t be pressured to leave.”  Why not fix the zoning and permitting mess and allow the contractors here in Hawaii to build housing? That would be a win-win solution. Tim and Tracey know of contractors who have left the state because they cannot get permits to build new houses or accessory dwelling units (ADU). A couple of container ships carrying single-wide manufactured homes could temporarily house Lahaina survivors if the state would provide land and provide utilities. It is frustrating for Tim, who has been in the Hawaii residential real estate business, managing long-term rentals for 18 years, to listen to state politicians posturing instead of fixing the problem.

The state legislature is trying to make matters worse by creating an elected community board to govern the rebuilding of Lahaina despite heavy public opposition and little support. One Lahaina resident stated, “As a resident of Lahaina, a real property owner, and someone who lost a home, place of work, and a sense of self on August 8th, I find this proposition shortsighted, coercive, and manipulative in both language and agenda.”  Governor Josh Green has “some concerns about the bill.”  

Maui community members divided on electing another board to make decisions on rebuilding Lahaina

January saw a 3.6% drop in visitors compared to January 2022 and a 4.5% drop in total spending, equal to a $1.8 billion reduction. Industry experts point to a “halo effect” from government officials and celebrities after the Maui wildfires and increased competition from other tourist destinations now that most countries have dropped the pandemic related restrictions. Media images of Lahaina Strong camped out at Kaanapali Beach to protest housing shortages and state legislators looking at raising the transient accommodations tax and implementing a $25 environmental fee create headwinds for the visitor industry. One businessperson who caters to tourists commented on the impression of visitors by stating, “that’s the kind of messaging coming out. If the intent is to limit visitors to Hawaii, it’s working.”

The Hawaii visitor industry yearns for the return of the Japanese tourist after the COVID-19 pandemic decimated the sector. The Japanese share of the visitors dropped from 15.4% in 2019 to 6% of visitors in 2023. While Japan’s slow easing of pandemic related restrictions is part to blame, inflation and the strong dollar also prodded Japanese tourists to visit other destinations like South Korea and Europe. Hawaii Tourism Authority (HTA) representatives hope a full recovery of Japan’s visitors to Hawaii will occur by 2026. Fuel surcharges on a Hawaii round trip ticket have dropped from $1,000 to $400. The HTA will have to overcome headwinds caused by social media posts of $30 bowls of Ramen from recent Japanese visitors.

Another 11,193 residents moved from Hawaii last year making total outmigration over the past five years 36,789 residents. The Honolulu Star-Advertiser reported on the loss of tax revenue due to population loss, and the state legislature is contemplating minor tax breaks for “affordable housing,” yet no one is talking about reducing the amount of red tape involved with building a home. The article also neglected a subtle, hard to quantify effect. People leaving Hawaii are taking their skills with them, leading to a shrinking supply of services people rely on. Hawaii will likely continue to lose people in search of better opportunities until lawmakers ease housing regulation or Hawaii loses enough residents that the current housing inventory becomes sufficient.

The Board of Water Supply (BWS) began drilling a second test well to determine contamination levels in the aquifer from the Red Hill fuel leak. The well will be about 320 feet, 100 feet below the water table, taking three months to drill. The team has currently drilled 50 feet and has not found any signs of soil contamination, but the lab has not tested the samples. Testing from the first well has not found signs of contamination, but the lack of understanding of what is happening underground means opening the Halawa shaft will wait until BWS is confident that any undetected contamination will not foul the rest of Oahu’s water supply. Monitoring will include drilling additional test wells and the entire process will take between three to five years.

BWS drilling 2nd monitoring well to check for Red Hill contaminants. But who's paying for it?

Mayor Rick Blangiardi announced on February 12th he will run for re-election as Mayor of Honolulu. His focus for the next four years will remain the same, housing, homelessness, and public safety. Neighborhood board members in Waikiki and Chinatown have given Blangiardi and his staff credit for crime, street violence, drugs, and homelessness. The jury is still out on if he can fix the shortage of housing due to in large part, the dysfunctional Department of Planning and Permitting (DPP).
 
A city auditor completed a follow-up audit of DPP and found DPP had completed four of the original sixteen recommendations from the first audit, was still working on five recommendations, had not resolved two recommendations, and dropped four recommendations because the risks associated with the recommendations no longer exist. DPP has stopped repeated review cycles for building permits causing significant and costly delays for building permits. DPP is also measuring and benchmarking performance data on the permitting website. Permit applicants can go to the website and see where in the review cycle their permit application sits and how long each step takes. DPP currently tracks six steps in the process:
 

  • Days in Pre-Submission Queue:  Number of days application was waiting for pre-screen to begin.
  • Days in Pre-Submission Review:  Number of days for the application acceptance.
  • Days in Plan Review Queue:  Number of days for DPP to begin the plan review.
  • Days in Plan Review:  Number of days for entire plan review completion.
  • Days Waiting for Pickup:  Number of days after plan review completion for applicant to pay for and pick up permit.
  • Total Days to Issue:  Measured from application acceptance to permit issued dates. Note that DPP does not include the first two measurements in the Total Days to Issue measurement.

 
Tim and Tracey applied for a permit to expand their garage and build an addition on top. The architect submitted the application with building plans on October 2, 2023. The application is still waiting to start the pre-submission review (138 days as of February 17, 2024).
 
Researchers from the University of Hawaii (UH) have released initial findings from their “Maui Wildfire Cohort Study,” which are disturbing. Almost 75% of the 224 survivors studied show signs of respiratory issues with half showing signs of mild to severe lung obstruction and a third suffering from compromised lung function. More than half of the participants are showing signs of depression. While not surprising, the rates were higher than expected and raise concerns of long-term complications down the road.

Researchers host recruitment events for study analyzing health impacts of Maui wildfires

Maui County is considering a measure to streamline building permits to speed construction in the wake of the wildfires. The proposed changes would amend the Maui County Code to allow for expedited reviews of multifamily projects and commercial projects. Only single-family homes are currently eligible for emergency approvals to rebuild. The changes would combine plumbing and electrical permits so builders would not have to open two separate permits and owners could rebuild buildings constructed in the last five years using the earlier plans without having to get a new approved permit. Construction crews must remove debris and restore essential services before gaining approval. The amendment falls well short of Kauai’s emergency procedures allowing homeowners to rebuild existing structures without new permits when recovering from Hurricane Iniki. The island’s population did not recover from that disaster for ten years.

The state opened Ka Malu Koolau kauhale on February 9th in Kaneohe as part of Josh Green’s attempts to reduce homelessness. Kauhale means tiny home village. A nonprofit planned and constructed the $1.3 million facility, reducing the cost by about $700,000 using pro bono construction labor and donated building supplies. The kauhale will provide housing for 34 people, 24/7 security, restroom facilities, shower trailers, laundry area, access to daily meals, and provide peer support. A local practitioner blessed Ho’okahi Leo, Hawaii’s third kauhale in Governor Josh Green’s term on February 15th and will house 50 homeless people on middle street. The state established the first kauhale of Green’s term off Punchbowl. Josh Green’s goal is to reduce homelessness 50% by the time his first term ends on 12/7/2026. He has a long way to go considering the 2023 Point in Time Homeless Count totaled 6,223 homeless people in Hawaii.

Blackstone, a private equity firm, gave past residents of Kapilina Beach Homes an unwelcome surprise by turning the tenants over to collections for failing to pay rent and utilities during the Red Hill water contamination crisis. One past tenant who lives in Texas received a collection notice for over $30,000 and a second past tenant who lives in Florida received a collection notice for over $8,000. Both families have suffered health consequences from the contamination. Blackstone purchased the rental complex last year and would not confirm the number of past tenants they turned over to collections.

The Nature Conservancy announced it renewed its coral reef insurance policy through the end of 2024. The insurance covers more reefs around Hawaii’s eight main islands, has a minimum payout of $200,000 and a maximum payout of $2 million for the year and $1 million per storm. Private donations fund the policy which cost $106,000 this year. The policy will pay for reef damage occurring during a storm with sustained winds greater than 50 mph. Recovery workers must reattach broken corals within a few weeks, or the coral is likely to die. Once the wind speeds during a storm have been confirmed, the payout process begins so there is little delay in funding. Recovery crews can start assessing any damage as soon as the ocean is safe to enter after a storm. While new to Hawaii, this type of insurance has successfully funded reef repairs after hurricanes off the coast of southern Mexico, Belize, Guatemala, and Honduras. A major hurricane can damage up to 50% of the coral in a reef system and a quick response is critical to minimizing future flooding from ocean activity.

Nature Conservancy boosts Hawaii reef coverage with enhanced insurance policy

The Surfer Foundation issued the 2023 “Hawaii Water Quality Report” and identified seven sites on Oahu and seven sites on Kauai where half of the water samples taken exceeded the U.S. Environmental Protection Agency’s (EPA) threshold for enterococci bacteria threshold of 130 per 100 milliliters of water. Fecal matter contains Enterococci, and the report indicates that most of the sites are near streams bordering cesspools or bays and shore breaks near cesspools. The Oahu sites are Kaupuni Stream, Waiahole Beach Park, the “Chocolates” surf break at Haleiwa Beach Park, Heeia Stream, Hakipuu Boat Ramp, Kuliouou Stream, and Kahaluu. The seven sites exceeded the state health standards more than half the time and the state considers the water unsafe for swimming.

Hawaiian Airlines received its first 787 Dreamliner aircraft from Boeing on February 14th, starting a modernization project announced in 2018, identifying the Dreamliner as Hawaiian’s new flagship aircraft. The carbon fiber fuselage is lighter than older aluminum frames making the plane 25% more fuel efficient and extending the range to 8,000 miles on one load of fuel. Hawaiian equipped the new aircraft with 34 lay-flat seats due to the popularity of the first-class offerings when it retrofitted their Airbus A330 aircraft with 18 of the lay-flat seats in 2015. Hawaiian has 12 firm orders for the Dreamliner and expects two more deliveries this year. Hawaiian will assign the aircraft to the Honolulu and San Francisco route first, then rotate it with Honolulu and Los Angeles and Honolulu and Phoenix.

Hawaiian Airlines welcomes its biggest aircraft Boeing 787-9 Dreamliner

The University of Wahine finished the Big West Conference regular season in first place and earned a bye in the Big West Tournament held in Henderson Nevada starting March 13th. The Wahine were 15-3 in conference play and 18-9 overall. They are going for their third straight Big West Tournament championship and the resulting automatic bid to the NCAA Tournament.

Honolulu Zoo has come a long way since losing its accreditation in 2016. USA Today named the zoo one of the nation’s ten best for its displays of Hawaii’s biodiversity in addition to attractions showing the Sumatran tiger and African wild dog. 

Times Supermarket in Kailua is closing and will be replaced by the first Tokyo Central market. The chain offers seafood, fresh vegetables, and fresh cuts of Japanese-style meat along with popular Japanese grocery products like snacks, beverages, ice cream, liquor, and toys. The addition helps fill a void of Japanese products offered in Kailua when Target replaced Don Quijote a few years back.

Captains and coaches of the Lahainaluna football team attended the coin toss at the beginning of the Superbowl to acknowledge the teams’ spirit of completing their football season after the August wildfires that destroyed their town.

Tim and Tracey added an early morning paddle to their weekly routine and mother nature rewarded them with some extremely calm ocean conditions and some amazing sights. A manta ray swam around and under their canoes one morning and they saw humpback whales breaching for close to thirty minutes a second morning. Lucky to live in Hawaii.

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

Another Day in Paradise: Skydiving

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