May 2020 Email Update Oahu Real Estate
Here is our 05/08/2020 e-mail update. The newsletter is sent after the statistics for the preceding month have been posted on the Board of Realtors website. You can find previous newsletters by visiting www.stott.com/news.
The April median sales price for single-family homes was $809,000 (5.5% higher than April 2019) and for condos was $450,000 (7.4% higher than April 2019). Both the supply and demand of homes dropped sharply as a result of the disruptions caused by the Covid-19 pandemic. The number of single-family homes sales dropped 22% and the number of condo sales dropped 28% compared to April 2019. A 45% drop in new single-family home listings and a 40% drop in new condo listings has resulted in fewer available properties. There are currently 25% fewer single-family homes and 9% fewer condos available compared to April 2019. Tracey has talked to several prospective sellers who are waiting until the stay-at-home restrictions ease.
It is understandable if Sellers are hesitant to put their homes on the market during these uncertain times. However, the statistics suggest that this may be a great time for Sellers to put their property on the market if it is vacant or will soon be vacant. The median sales price crept up last month even though demand dropped. Even more important, new listings dropped by over 40% while sales only dropped by roughly 25%. Sellers currently have less competition in May than they did in April. Please call us at 800-922-6811 or e-mail us at [email protected] if you would like to discuss the possibility of selling your property.
The University of Hawaii Research Organization (UHERO) and the states’ various Chamber of Commerce Organizations have teamed up to survey Isle businesses about the impact of the coronavirus and the governments’ response. Stott Real Estate, Inc. participated in the survey. The results of the survey were not surprising and showed that the accommodations industry, retail, and food service were the hardest hit by layoffs and approximately 31% of the islands businesses saw their revenue plunge to essentially zero. The hardest hit employees were also the ones with the smallest savings in general.
UHERO distributed another article on ways Hawaii can take advantage from a breather in the states crushing tourism numbers to design a better way to improve both the tourists’ experiences and minimizing the negative impacts on residents’ quality of life and on the environment. Many of the proposed solutions involve the use of technology and implementing economic solutions to create a win-win-win for both tourists, residents, and the environment. Unfortunately, technology and economic development have been two of Hawaii’s weaknesses, particularly in the area of government. We shall see if the state can come out of this tourism shutdown with a better solution to create economic growth than by simply packing more planes with people and sending them to the islands. Here is a link to the article:
Another recent UHERO article paints a sobering portrait for Hawaii’s economic recovery. The study does rely heavily on assumptions that have a high degree of uncertainty. The research organization predicts by the end of the year, tourism numbers will reach 50% and the remainder of the economy will recover to 70% of the activity seen prior to the Covid-19 pandemic related shutdown. Here is a link to the article:
Announcements by Governor Ige have some residents scratching their heads with their plans to further restrict activity throughout the state and on Oahu despite seeing a peak in new cases back on April 3rd of 34 cases. On Friday, April 17th, Governor Ige issued a fifth emergency proclamation that further restricts Hawaii residents’ activity even though the number of new cases was twelve and existing restrictions appeared to be working. The governor closed all of Hawaii beaches preventing residents from walking or exercising on the beach forcing more people to walk and run on sidewalks and streets. The proclamation also prevents evictions for any tenants that fail to pay rent. The beach restrictions were relaxed on April 25th. There were four new cases reported on Monday, April 20th and only two new cases reported on Tuesday. None of the new cases were on Oahu. On April 27th, Governor Ige announced that florists would not be allowed to deliver flowers on Mother’s Day and that the mayors of each county must get his permission before making changes to the stay-at-home orders. He retracted that restriction based on the resulting outcry from residents and florists who were about to be stuck with undelivered inventory. The mayors have expressed concern that Ige’s order will reduce their flexibility in addressing issues impacting their counties while undermining their ability to lead during the crisis. Johns Hopkins University reported that Hawaii was tied for the lowest infection rate per capita in the nation. Ige appears to be comfortable with hiding behind his interpretation of federal guidelines instead of finding ways to safely loosen the stay-at-home orders that have wrecked the economy. Governor Ige was reported to have shrugged off a question regarding the protests over one weekend by those that feel the state has gone too far. Governor Ige is also hoping that federal funds will help him avoid cuts to public payrolls while the private sector has been devastated.
Lieutenant Governor Josh Green, an emergency medical physician, referred to one model that predicted that Hawaii would have seen 4,479 deaths by now to justify the state’s stay-at-home orders to this point. Even he appears to be questioning parts of Ige’s latest emergency proclamation. He has been providing daily Facebook updates on Covid related stats and Honolulu Star-Advertiser columnist, Lee Cateluna, highlighted one of his updates. In it he writes the following on a white board: Park OK, Ocean OK, Beaches WTF. Basically, it sums up the week of April 20th in a nutshell where Mayor Kirk Caldwell announced the city’s parks opened for exercise and that residents have been allowed swim and surf in the ocean. Apparently Ige recognized his new restrictions on beaches was being questioned by many when the local evening news was covering Green’s post. The beach restrictions were relaxed on Saturday April 25th so that people could exercise on the beach while maintaining social distancing.
Civil Beat highlighted the differences between Lieutenant Governor Josh Green’s approach and the Department of Health’s (DOH) approach under Governor David Ige. The lieutenant governor provides daily updates on the number of new infections, the number of hospitalizations, and the percentage of ventilators used, for example. The DOH’s stats not only lag the usefulness of Green’s statistics, it lags most other state health departments’ quantity and quality of data. Alabama for example, reports the data by county, gender, age groups, race, and ethnicity. The site also shows the number of patients currently in intensive care units and on ventilators. Louisiana tracks deaths by race which revealed that 70% of the people that died from Covid-19 were black despite making up only 35% of the population. Green’s attitude seems refreshing. He wants to put the data out there so people can make the best decisions regarding their individual circumstances.
State senators vented their frustrations with Governor Ige’s administration when Ige’s chief of staff could not answer many of the questions from the six members of the chamber’s special committee on Covid-19. The 30-minute meeting stretched to 90 minutes due to the chief of staff’s inability to answer questions during the session on April 13. Some of the questions that went unanswered were:
Why the DLIR did not take up the senators’ offer to use their staff members to process unemployment claims?
What are the state’s plans after the April 30 stay-at-home directive expires? How does the administration plan on getting Hawaii’s economy back on track?
Why is a web-based app that the state paid $65,000 to develop not being used on visitors’ cell phones to identify movements of tourists who are instructed to honor the 14-day quarantine order?
One of the senators summed up the chief of staff’s answers. The administration does not appear to have a Plan A, let alone a Plan B.
Tim has talked to many tenants in April who have lost their jobs or have been forced to shut down their businesses due to the stay-at-home, work-at-home orders. All of them have filed for unemployment, even the self-employed who are due financial relief from the CARES Act. The state’s antiquated unemployment system has failed to provide timely relief to the over 244,000 people that have filed for unemployment since the middle of March. Even when an unemployment claimant has finally received approval from the state, they have had difficulty getting back on the system to create an account in order to get paid. Additionally, the Department of Labor and Industrial Relations (DLIR) overwhelmed website prevents people from filing their weekly or biweekly deadlines to prove they are still unemployed resulting in disruption of their benefits. Self-employed people who are eligible for the federal pandemic unemployment assistance (PUA) through the CARES Act were originally told to file using the state’s existing unemployment website. The state DLIR director then switched gears and told residents applying for PUA that they must wait until at least mid-May for DLIR to develop a new system for processing PUA applications. The state opened a new web page for accepting PUA “pre-applications” on April 29th but will not start processing applications until additional features are added on May 15th.
Numbers provided by DLIR highlighted the state’s failure to provide financial relief. $2.9 million were paid out in the first three weeks, $4.1 million in the following two weeks, and $11.2 million paid out in the first two days of the week starting April 13th. The $11.2 million figure equates to paying 17,000 claims at $648 per week per claim compared to the over 244,000 claims filed. DLIR processed 82% (181,846) of the filings two weeks later (April 27th) yet had only paid claims for 27% of the claims (65,252). DLIR still processes unemployment claims on a mainframe that was purchased in the early 1980s according to an article by Civil Beat. The technology is so obsolete, the software predates the use of a mouse. State workers must use the keyboard to manually move the cursor to the appropriate field. Hawaii’s unemployment rate was 37% according to DLIR as of April 15th. Adding salt to the wounds, Hawaii’s unemployment fund will be depleted by May 10th and the state is looking to obtain a no interest loan from the federal government according to DLIR.
The Hawaii public school system may not ever reopen if the latest guidance from the superintendent is to be followed with some medical experts stating the Corona virus or some variant may become another periodic illness like the flu. Hawaii Superintendent Christine Kishimoto told the Honolulu Star Advertiser that she will not reopen the schools until Hawaii goes four weeks with no new Covid-19 cases.
Mayor Kirk Caldwell has extended Oahu’s stay-at-home, work-at-home order through the end of May. At least he is opening the city parks to allow exercise and admits that walking or running on the streets is not ideal. Mayor Caldwell also acknowledged that people do want to get back to work and stated that they are taking the first steps to opening small businesses where social distancing can be maintained.
Thousands of recently unemployed Oahu residents waited for four hours in a line of cars up to two miles long to receive 50 pounds of free food on April 30th. The City of Honolulu teamed up with the Hawaii Community Foundation and the Hawaii Foodbank to help feed an estimated 256,000 people over the next eight weeks. About 4,000 households picked up the free groceries during the Thursday event.
In another example of government overreach, the Maui County Liquor Control is investigating Maui Brewing Company for giving away hand sanitizer to customers purchasing food, alcoholic and non-alcoholic beverages, coffee and logo items. The company had produced 3,000 gallons of hand sanitizer at its Kupu Spirits distillery and had donated $25,000 of product to local charities and first responders since the start of the pandemic. The company started giving customers free 16-ounce bottles of hand sanitizer when they learned that some were paying as much as $20 for an 8-ounce bottle. No good deed goes unpunished. The company has pulled back all donations of hand sanitizer to county and state departments. The acting director of the county liquor department was not available for comment on the issue. Word of the investigation reached the Wall Street Journal and the newspaper ran an article detailing the government’s overreach.
The Association of Zoos and Aquariums’ (AZA) Independent Accreditation Commission accredited The Honolulu Zoo four years after revoking the accreditation in 2016. The AZA reviewed the zoo’s operations in areas of animal care and welfare, veterinary programs, conservation, education, and safety. Oahu residents provided a stable source of financing for the Honolulu Zoo in 2016 after the zoo lost its accreditation by passing an amendment to the City Charter dedicating 0.5% of annual property tax revenue to a special zoo fund. The zoo also has kept the same director for the past four years after numerous directors resigned in what seemed like a perpetual revolving door. The Honolulu Zoo hopes to welcome visitors back soon to enjoy the facilities and learn more about the animals. In another bit of good news, twin right-tailed lemurs were born at the zoo on Easter, April 18th. The pair of newborns are offspring of Remi, a 5-year old female, and Finn, a 4-year old male who separately arrived at the zoo in the fall of 2018. The parents also gave birth to Clark, at 10-month old brother of the newborn twins last summer. The International Conservation of Nature considers lemurs the most endangered mammals in the world.
A recent study by Wallethub reported that Hawaii has the highest percentage of businesses affected by the Covid-19 pandemic. Hawaii has the highest percentage of small businesses in high risk industries like restaurants, hospitality, and tourism. Hawaii also has the highest amount of small business loans per small business employee in the country. In a different study, Hawaii also ranked #1 in the states hardest hit by the pandemic’s impact on tourism. Tourism accounts for 29% of Hawaii’s economy according to the study.
The Board of Water Supply has agreed to Mayor Kirk Caldwell’s offer to acquire 200 acres surrounding the Haiku Stairs more widely known as the Stairway to Heaven. Hikers have played “cat and mouse” for years with the police and cutting through neighbors’ private property to climb the popular yet illegal staircase up the Windward side of the Koolau Mountains for the past 30 years. The Board of Water Supply has given the city 18 months to close on the transaction or it will proceed with removing the stairs.
Tori Richards started making fabric face masks when the Centers for Disease Control and Prevention started advising all people to wear masks when in public. Tori Richards is making masks accessible to the public for free via their website. Two other retailers are also making fabric masks, Island Slipper and Jams World. Tim recently purchased an “off-the-shelf” outrigger canoe from Kamanu Composites while Tracey special ordered one. Tracey must now wait longer for her special-order pink outrigger canoe since Kamanu Composites had to halt production since it is considered a non-essential business. Kamanu Composites has shifted production to making clear face shields and has been able to keep two-thirds of its original staff employed.
You may not currently be able to visit the Big Island, but you can still view some of the natural wonders that the island has to offer. KapohoKine Adventures is offering virtual tours of the Big Island’s most popular destinations by combining promotional videos over the past two years into two-minute videos. The weekly videos are titled Passport to Adventure on their website. A link is provided below:
Hawaii’s oldest and biggest dairy, Meadow Gold, will shut down its Oahu operations after a buyer backed out of a sale. Dean Foods, the bankrupt owner of Meadow Gold’s operations, has found a buyer for the neighbor islands’ facilities that will continue to operate under the Meadow Gold brand. Tracey has fond grade school memories of field trips to Meadow Gold and of Lani Moo.
The town of Kailua was caught by surprise when Navy explosion ordnance disposal technicians detonated two 100-pound gravity bombs a little more than halfway to the Mokulua Islands from Lanikai Beach on April 27th. The two bombs and other ordinance were discovered by a snorkeler and reported to authorities. The two bombs could not be removed because they still had their fuses and were dangerous to move. The bombs were believed to have been dropped during training exercises around World War II.
Researchers are taking advantage of the closure of Hanauma Bay Nature Reserve to study the reef ecosystem and what effects the throngs of tourists visiting the beach have. The researchers are measuring and observing fish behavior, reef sedimentation and turbidity, and coral larvae during the shutdown and will compare the data to data collected when the crowds return.
On another note, Tracey was inked recently during one of her ocean swims. No, she did not get a tattoo. She startled an octopus who in turn scared the living daylights out of Tracey when it emitted its ink cloud. Can you spot the octopus in the photo below? She took a video of another octopus that she saw a few days later. Finally, Tracey recently took a picture of a clumpy nudibranch. Tim and Tracey had fun with friends trying to figure out what kind of animal she saw. It took a friend with a doctorate in ocean biology to help us out.