November 2018 E-Mail Update
Here is our 11/09/2018 e-mail update. It 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 median price in October for single-family homes was $800,000 (6.4% higher than October 2017) and for condos was $390,000 (1.9% lower than October 2017). Sellers are losing some of their negotiating power as higher prices and higher interest rates are pricing some potential buyers out of the market and giving pause to buyers who still can afford to purchase a home. 13% fewer single-family homes and 9.4% fewer condos sold in October than the previous year and pending sales dropped 20.3% for single-family homes and 18.2% for condos. There is currently 3.0 months of remaining inventory for single-family homes and condos, the highest inventory for available homes on Oahu in about three years. Sellers and potential sellers will have to compete more aggressively for the shrinking pool of buyers and provide more concessions to buyers.
The Hawaii Supreme Court invalidated the question asking voters to approve an amendment to the Hawaii Constitution that would allow the state to tax property in support of education because the wording on the ballot question was ruled unclear. Hawaii law requires that the language of a proposed amendment be neither misleading nor deceptive. The voting booths had notices stating that any votes for or against the measure on the ballots would not be counted.
The Hawaii Supreme Court ruled in favor of allowing the Thirty Meter Telescope Project (TMT) to begin construction once the necessary requirements of the state conservation district use permit are met. The state Office of Conservation and Coastal plans must approve TMT construction plans before construction can begin. The construction plans will be reviewed to make sure that they are consistent with the permit conditions and adhere to the Maunakea Comprehensive Management Plan that includes control of invasive species and attention to cultural protocols and training. Opponents of the project have already announced that they will make another stand on the mountain to halt the construction.
Howard Hughes Corp. broke ground on its fifth mixed use tower, the 751-unit Aalii, at Ward Village in Kakaako. While several of the other towers were aimed at the luxury and ultra-luxury market, the Aalii will offer more “moderately priced” units. Prices start in the $500,000s for a 300 square foot studio, in the $700,000s for one-bedroom units, and $1 million for an 850 square foot two-bedroom condo. An interior design firm was hired to provide turnkey furniture packages for some of the studios. While visiting the sales center, Tracey learned that part of the maintenance fee goes to power washing the Ward Village sidewalks every evening and for security on the grounds. Not surprisingly, Ward Village in Kakaako does not currently have any issues related to homelessness. The sales people have noticed a migration of some property owners in Waikiki, where the homeless population and crimes by homeless individuals have risen over the past decade. E-mail us at [email protected] if you are interested in the new developments at Ward Village and would like more information.
Hawaii visitors unfortunate enough to stay at five Waikiki hotels owned by Kyo-ya Hotels & Resorts have had to essentially fend for themselves and listen to aggressive Unite Here Local 5 union workers picketing the hotels. Sheraton Waikiki, Royal Hawaiian, Westin Moana Surfrider, Sheraton Princess Kaiulani, and Sheraton Maui are the first five of twenty hotels whose workers are represented by Unite Here Local 5 that have contracts that expire this year and the union hopes to set the standard for the remaining contracts. Tourists paying pricey room rates have had to do without housekeeping services and were forced to put out towels and trash in the halls. The hotels have closed most restaurants, room service, and bar service. While some guests have shown support for the workers, a growing number of out-of-state visitors were angry with the workers when they were informed of the lack of service after checking into the hotel. Guests have been awakened as early as 5:30 in the morning by chanting strikers picketing in front of the hotel and surrounded by picketing workers while trying to enjoy themselves on the beach. One woman left a message with the Honolulu Star-Advertiser stating that it was ridiculous that the hotels were expected to pay more than $50,000 per year for unskilled labor. She made less than the workers and saved years for a vacation ruined by the strike. The strike soured the American Dental Association’s (ADA) convention; the state’s largest during the last week in October and the ADA may consider a different venue after dealing with the disruption. Local politicians have shown how much they take the tourist industry for granted by showing support for workers while failing to apologize to visitors who have had their Hawaii vacations ruined. Both Kyo-ya Hotels & Resorts and Unite Here Local 5 have failed their guests.
Honolulu City Council Chairman has introduced a bill to require the Department of Planning and Permitting Department (DPP) to process applications for one- and two-family dwellings within 60 days of receiving them. About 100 members of the Building Industry Association of Hawaii held a rally in front of Honolulu Hale in support of the bill. One president of a construction company testified that he had to lay off 30 carpenters because of the delays in the permitting process. He testified that his company is booked into September of next year with jobs but the permits have not been approved. Another builder testified that he routinely waits nine months or longer to obtain approval for a common building permit. Tracey recently had a house that she has listed fall out of escrow when a contractor informed the buyer that it could take up to a year to acquire the permits needed to remodel the home. Tim and Tracey still have two permits that have been open for more than six months for simple lava rock walls built bordering the front and back yards. The bill calls for an expedited permit process when the completed plans are reviewed just once as long as the homeowner agrees to abide by any decisions made by DPP officials.
A religious organization’s effort highlights the difficulty in providing shelter to currently homeless individuals even when the mayor states that it is a top priority. Mayor Kirk Caldwell asked faith-based communities for help with solutions and it took two years to obtain zoning changes and permits to situate 12 prefabricated domes on church property that will house nine homeless families. Homeless families are expected to move in soon.
Mayor Kirk Caldwell introduced a third bill to license a limited number of bed-and-breakfast establishments (B&Bs) and transient vacation units (TVUs). The Honolulu Planning Commission gave a favorable recommendation to the Honolulu City Council. A bill can pass the city council on a simple majority vote if the commission provides a favorable recommendation while a supermajority of six votes is required to pass the measure without the commission’s recommendation. The city has been unsuccessfully grappling with the issue of short-term rentals for decades while unlicensed TVUs have proliferated in Oahu’s beachfront communities. The commission gave the bill its blessing when the rewritten bill capped the number of permitted TVUs and B&Bs to one percent of all dwelling units in each of Oahu’s eight designated regions. Oahu has currently 816 licensed B&Bs and the number of licensed vacation rental homes would grow to about 4,000 under the proposed bill. The bill will raise penalties for violations and may encourage underground operators to seek the permits. The caps are not expected to satisfy the demand for permits. The issue is very controversial generating passion among the local community from both sides. Even Tim and Tracey don’t see eye-to-eye regarding the licensing initiative. The new bill comes as the Hawaiian Tourism Authority reported that Hawaii vacation rental homes continue to grow in popularity and hotel use has been declining in 2018.
Hawaiian Electric Company (HECO) has launched NEM Plus, a new program that allows existing net metering (NEM) customers to add solar storage and other non-exporting equipment to their existing rooftop solar systems. The program could be cost-effective for customers who are consistently paying for energy delivered to their homes from HECO but NEM customers who routinely pay the minimum bill won’t benefit. The NEM program plus generous tax breaks helped bring almost 500 megawatts of electricity to the grid from 2001 through 2015. The link below provides additional information about the new program.
Kamehameha Schools agreed to an $80 million settlement for students that suffered sexual abuse by a psychiatric consultant that worked at the school from the late 1950s to the early 1980s. The consultant committed suicide in 1991 after one of the former students confronted him about the past abuse.
The federal government evicted former Honolulu Police Chief Louis Kealoha and his wife, former deputy prosecutor Katherine Kealoha from their home in September so that it could be sold to stop the mortgage balance from growing. The Kealohas stopped making mortgage payments in February around the time that they were charged with bank fraud and for framing Katherine’s uncle with stealing their mailbox and lying to federal investigators. The Kealohas are believed to be the most powerful couple in Hawaii’s history to be charged for corruption.
The Volcano House, the one hotel in Hawaii Volcanoes National Park, fully reopened on October 25th, five months after Kilauea’s eruption forced both the park and hotel to close. The restaurant and lounge were the last pieces of the hotel to open because of issues related to the rapid evacuation of the site. The hotel needed to replace flooring and some appliances before the restaurant and lounge could be reopened. The Volcano House brings back many great memories for Tim and Tracey. They stayed there to celebrate their first anniversary and decided to travel for every anniversary. Ashley was born the following October and that decision was overturned. Tim and Tracey returned in 2000 with both Ashley and Mark, and Mark finished his first hike at the age of three without having to be carried. Hawaii Volcanoes National Park is one of those places that you can visit repeatedly and find some new adventure every time.
Big Island officials are struggling with finding a way to allow visitors to safely see the newly formed cinder cones when lava from Kilauea opened 24 fissures in Lower Puna destroying 720 homes and burying or isolating 1,600 acres of farmland. The Big Island Mayor is trying to find a balance between Leilani Estate residents who want their privacy and the thousands of people who are interested in viewing the now world famous Fissure Eight.
The Honolulu Zoo veterinarians decided to euthanize the rescued wallaby after eight months of trying to bring it back to health. The wallaby’s latest setback convinced those caring for the animal that it would not recover and they decided to end the animals suffering. Three of the animals were brought from Australia back in 1916 and a male and female escaped from the local zoo where they were being kept. There are an estimated colony of 40 wallabies in Kalihi Valley.
Hawaii-based Navy divers successfully removed 250,000 gallons of fuel oil from a captured World War II German cruiser that capsized and sank at Kwajalein Atoll after surviving two atomic tests in 1946. The 697-foot warship lies partially submerged about 200 yards off shore from a smaller island near Kwajalein. Using a procedure called “hot tapping,” the divers were able to drill holes and install valves on the fuel tanks without any fuel leakage.
Looking to add a little conservation project to your Oahu vacation? Gunstock Ranch in Kahuku has teamed up with Hawaiian Legacy Reforestation Initiative to combine tree planting with Utility Vehicle (UTV) tours of the ranch. The initiative that will eventually reforest 500 acres is still in phase one to replant the first 80 acres. The initiative looks to establish the King Koa, Royal Sandlewood, Milo, and the Ohi’a tree to various sites in Hawaii. The King Koa no longer exists in the lower elevations and used to cover large parts of the island. The trees reach heights of 100 feet and diameters of four feet. The largest trees were used to make dugout canoes. The Royal Sandlewood forests were all but eliminated in the early 1800s when the sweet smelling wood was discovered by the outside world. You can learn more about the Hawaiian Legacy Reforestation Initiative at www.legacytrees.org. You can learn more about Gunstock Ranch at www.gunstockranch.com.
Another Hawaii microbrewery has experienced success and growth over the past two years. Beer Lab HI is the brainchild of three Pearl Harbor engineers who love beer. They opened their brewery and tap room on University Avenue in 2016 and have since expanded to two other locations in Waipio and Pearl City. The company brewed 200 barrels of beer their first year and are projected to brew between 700 and 800 barrels this year. Patrons are encouraged to bring their own food because the three founders are all about the beer. The three engineers still work full-time jobs at Pearl Harbor Shipyard and then focus on the brewery after their jobs end at 3:00 pm in the afternoon.
A Hawaii non-profit’s attempt to maintain a 75-acre parcel of land in one of Oahu’s priciest neighborhoods has come to an end. The non-profit purchased the land located between Aina Haina and Hawaii Loa Ridge last year for $380,000 and planned to keep the land a preserve. The cost of maintaining the land and addressing community concerns became too expensive. The non-profit has put the parcel on the market for $1.1 million in an attempt to recoup the costs of trying to establish the reserve.
The Retail Merchants of Hawaii have reported that shoplifting on Oahu has increased over the past three months since the county forced retailers to charge a fee of 15 cents per bag. While the measure has reduced the number of bags being used (Tim no longer uses bags and just takes items out in a shopping cart to his car), merchants are complaining that some customers are filling up their own bags with items and leaving without paying. While retailers support finding ways to reduce waste, they are the ones contending with the unintended consequences of the county’s recently passed legislation.
Tim and Tracey are flying to Lanai this weekend to celebrate their 25th wedding anniversary on November 12th. It has been 25 years since they stayed at the Lodge at Koele for their honeymoon. This time around, Tim and Tracey will be staying at The Four Seasons Manele Bay because the Lodge is still undergoing renovations.