November 2015 E-Mail Update
This is our 11/10/2015 e-mail update. It is sent after the statistics for the preceding month have been posted on the Board of Realtors website.
Oahu’s October median price was $720,000 for single-family homes (4.3% higher than October 2014) and $370,000 for condos (4.9% higher than October 2014) as supply remains constrained. Oahu currently has 3.0 months of remaining inventory for single-family homes and 3.4 months of remaining inventory for condos. October marks the fourth time in the past six months that the single-family home median price was at or above $700,000 and the fifth time in the past six months that the condo median price was at or above $350,000. A recent forecast suggests that Hawaii needs to add 66,000 homes over the next ten years while recent trends show Hawaii only adding about 3,200 homes per year. If recent trends continue, Hawaii will be about 34,000 homes short of expected demand.
Virgin America completed its inaugural flight from San Francisco to Honolulu on Monday, November 2nd with CEO Sir Richard Branson aboard. The company will start with one flight daily between San Francisco and Honolulu, add a second daily flight from San Francisco to Maui in December, and expand the number of flights in the future.
Hawaii’s Public Utility Commission (PUC) ended the current net energy metering (NEM) program for new rooftop solar customers effective October 12, 2015. The discontinued program allowed rooftop solar customers to receive credits equal to the full retail value of excess electricity supplied to the grid. While Hawaiian Electric Company (HECO) claims that customers without rooftop solar paid a $38.5 million subsidy to rooftop solar customers, critics of the change counter that HECO benefited from receiving free electricity generation, lower utility fuel costs, and lower transmission costs because rooftop solar decreases the demand for centralized utility generation. Starting October 21, new rooftop solar customers can apply for fast-track approval under a “self-supply” option or a standard review for the “grid-supply” option. The self-supply option allows customers to receive the cost savings of using PV to meet their energy needs and allows a limited amount of excess electricity to be added to the grid for zero compensation. The grid-supply option is intended to provide customers with the option of exporting excess energy to the grid in exchange for energy credits equal to a fixed rate of 15 cents to 18 cents per kilowatt-hour depending on the island that the customer lives on. Customers operating under the old, discontinued, NEM agreement are not affected by this ruling.
Two of the solar leasing companies whose profitability depends on the solar tax credits and previous NEM program quickly filed suit against the PUC’s decision to modify the NEM program. The new ruling makes these solar leasing arrangements much less profitable for leased systems because the companies will have to install more panels on homes to provide similar savings. The leasing plans have recently become attractive because HECO’s electric rates have dropped with the price of oil. HECO currently charges about 25 cents per kilowatt-hour for electricity used in October. Electricity rates were as high as 35 cents per kilowatt-hour last year before oil prices collapsed.
Hawaii Gas is pressing forward with its plans to ship liquefied natural gas in bulk amounts to the islands starting in 2019. The company plans to build an off-shore floating storage facility since the option provides the lowest infrastructure cost and the lease cumulative economic impact of any option for supplying fuel to the islands. Hawaii Gas estimates that the shipments will save Hawaii consumers $2 billion in energy costs over 15 years.
The budget for Honolulu’s rail transit project seems to get worse every month. The projected cost of the project is currently $6.57 billion according to a report by KITV. The $1.4 billion dollar cost over-run equates to a 27% increase over the original plan sold to taxpayers. One city council member, Ernie Martin, has proposed to cap the amount of general excise tax that can be used by the Honolulu Authority for Rapid Transportation (HART) and use any excess funds for constructing affordable housing. He also proposes to shorten the planned route by one mile if costs continue to rise. Since the project started in Kapolei, then shortening the rail line would just result in fewer riders. Construction is currently progressing through Pearl City and the construction noise can be heard in some neighborhoods during all hours of the day and night. A few tenants have recently notified Stott Property Management that they are moving from these affected neighborhoods while construction continues.
Governor Dan Ige officially made homelessness a statewide emergency and about $1.3 million has been outlined to extend current outreach provider contracts through next July. One of the needs that have not been adequately addressed is the lack of shelter space for families and children. The governor’s announcement followed the final city and state sweep of the homeless encampment in Kakaako. The Honolulu Star Advertiser documented another issue in a recent article describing how a man from Florida purchased a one-way ticket to Hawaii without having a job lined up or place to stay ahead of time. The man ended up in a temporary shelter after running out of money. The state is working on ways to discourage this type of behavior.
State officials plan to enforce park rules at Kakaako Waterfront Park and nearby Kewalo basin in mid-November. Many of the homeless people that were removed by the city of Honolulu in October’s sweep of Kakaako, simply moved to these sites controlled and maintained by the state. The state coordinator on homelessness will lead outreach efforts to those individuals living at the two sites and try to place them in shelters and with nonprofits that help the homeless find more permanent solutions. The park areas are closed between the hours of 10:00 pm to 5:30 am.
630 acres of Oahu’s North Shore has been preserved in perpetuity according to a finalized agreement between the Turtle Bay Resort and the state of Hawaii. Turtle Bay Resort will retain the development rights to build 725 more hotel units, about 20% of the original plan in return for the preserved site. The coastline area, which represents about 4% of Oahu’s coastline, will be designated as a public park for recreational use.
Another Kakaako condo project has come under scrutiny because its glass is apparently too reflective. The Hawaii Community Development Authority (HCDA), a state agency, issued a notice of violation to the developer of 801 South Street Tower A after the developer filed a petition to waive the glass rule that became effective December 5, 2012. The regulation states that the glass on the first floor shall reflect no more than 30% of the light on the first floor and 50% of the light on the higher floors to minimize glare. The HCDA recently reached a $1 million settlement with the developer of the Symphony Honolulu condo tower after deciding that the new standard could not be defended. 801 South Street Tower A has already been completed and the new owners of the condos have moved in. The new condo association has already stated that the owners do not want the windows changed.
A bumper crop of bigeye tuna for Hawaii’s fisheries led to a two month shutdown of Hawaii’s long-line fleet on August 5th when the National Marine Fisheries Service determined that Hawaii had reached its 2015 limit. No other country had reached their quota and the Western Pacific Regional Fishery Management council reopened Hawaii’s fisheries by reallocating some of the allowable catch from the Commonwealth of the Northern Mariana Islands. Ahi prices soared during the closure of the fisheries.
The University of Hawaii Cancer Center received an anonymous $100,000 gift for cancer research. $20,000 is directed towards breast cancer research and the remaining $80,000 for other types of cancer. One study focuses on ductal carcinoma that can progress into invasive breast cancer. The study, which collaborates with the clinical community, hopes to create a risk prediction test to reduce over-treatment and lead towards a more personal management of breast cancer patients.
The University of Hawaii and fired basketball coach, Gib Arnold, agreed to a $700,000 settlement. $500,000 will be paid to Gib Arnold over three years and additional $200,000 will be paid to Arnold’s attorney. UH is still waiting on a ruling from the NCAA regarding violations that occurred during Gib Arnold’s tenure has head coach for the men’s basketball team.
The University of Hawaii fired head football coach, Norm Chow, after the Warriors embarrassing 58-7 loss to Air Force at home. The team’s record dropped to 2-7 and 10-36 overall under Chow’s leadership. UH has started looking for a replacement and June Jones is interested. June Jones left UH to coach at SMU after contract extension talks stalled in 2008. That was the same year that the Warriors were 12 – 1 with their only defeat coming at the hands of the University of Georgia in the Sugar Bowl.
WalletHub recently ranked Honolulu as the 5th “greenest” American city. Honolulu ranked #1 in lowest greenhouse gases emissions per capita, highest percentage of green space in the city, and largest number of farmers markets per capita. WalletHub analyzed the 100 most-populated cities across 13 metrics ranging from greenhouse gas emissions to smart-energy policies.
WalletHub also rated Honolulu as the 20th best foodie city. Honolulu tied for first in having the most gourmet-specialty-food stores, and ranked 5th for the number of coffee shops. Not surprisingly, Honolulu ranked 149th out of 150 cities in affordability.
Haseko, the Japanese developer of Ocean Pointe and Hoakalei, has been ordered to give $27 million back to homeowners as a result of Haseko’s decision to put in a swimming lagoon versus the marina back in 2011. Haseko’s stated that legal challenges, permitting delays, and changed financial conditions caused the company to back out of their commitment to a “world class” marina. Attorneys in the lawsuit estimate that homeowners should receive about $12,000 each.
Bubbies Homemade Ice Cream & Desserts, known for its mochi ice cream flavors, will close its shop near the University of Hawaii’s Manoa campus after nearly 30 years in operation. Bubbies made the decision since the shop’s lease is set to expire. Bubbies has transitioned from a retail enterprise to the world leader of manufactured mochi ice cream. Bubbies rapid growth in its wholesale business coupled with a tight labor market forced the owner to make the difficult decision. Bubbies maintains its factory in Aiea and a retail store in Hawaii Kai. Bubbies’ products can be found in Whole Foods, Foodland, Safeway, and other retail locations. A full list of products and locations can be found at www.bubbiesicecream.com. Tracey and our son, Mark, have been known to fight over Bubbies’ vanilla mochi ice cream and have agreed upon intricate rules on who can eat what flavors and when.
Longtime Hawaii retailer, Hilo Hattie, will vacate their flagship store on Nimitz Highway and move into a Kakaako warehouse as part of their plan to exit Chapter 11 Bankruptcy. The new warehouse will hold the corporate offices, and serve as a warehouse for their internet order fulfillment operations and their three remaining retail locations in Ala Moana Mall on Oahu, The Outlets of Maui in Lahaina, and in Lihue, Kauai. 35 employees will be laid off during the transition.
People who lived in Hawaii in the late 1970’s may remember a parody of a 1960 hit “Tell Laura I Love Her” titled “Fate Yanagi” by Rap Reiplinger. The Honolulu Star Advertiser had an interesting article about the woman who reveals herself as Fate Yanagi, and the singer who wrote and performed the song. Faith Tomoyasu knew James Kawika “Rap” Replinger when he was eight or nine years old and would assist her father during magic shows. Rap would call Faith, Fate or other words that began with “F” to get a reaction out of her. Late one night when Faith was in college, Rap tracked her down and sang the song to her using her real last name. He agreed to change the last name to Yanagi after discussing last names with her for about three hours. She was mortified when the song came out on an album and became a local hit. Tracey and several of the staff remember the song well and reminisced the comedy group Rap Replinger was part of, Booga Booga. The song is available on iTunes and videos of the song can be found on YouTube.
Our son, Mark Kelley, recently became a licensed real estate agent after successfully passing his licensing exams this summer. Stott Real Estate, Inc. may have a third generation working here some day.
If you need assistance buying, selling, or managing your Oahu property, we want to apply for the job of assisting you.