September 2018 E-Mail Update
Here is our 9/11/2018 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.
Oahu’s median prices continue their steady climb, as supply remains tight. The August median price for single-family homes set a record at $810,000 (3% higher than August 2017) and the median price for condos was $427,000 (1.9% higher than August 2017). Demand fell both in terms of the number of sales in August, 2.2% fewer single-family home sales and 9.4% fewer condo sales, and in terms of pending sales, 15.3% fewer single-family homes under contract and 12.4% few condos under contract. Even with the drop in demand, supply remains tight with only 2.8 months of single-family homes available and 2.9 months of condos available at current demand levels.
The latest report by website portal Zumper revealed that median rents for a two bedroom Honolulu condo dropped 8% over the past year and median rents for one-bedroom condos have started to drop (just 0.6%).
The deadline for filing for the Honolulu County Home Exemption is September 30th. The home exemption has become a much more valuable tax saving feature since the passage of the Residential A property classification and the higher tax rates associated with Residential A. To qualify, a homeowner must own the property before September 30 of this year for the new tax year in January. You can find the home exemption form by accessing the link below.
The lawsuit by Hawaii’s four counties to strike the state’s proposed amendment that would allow the state Legislature to create a “surcharge” on property taxes for “investment property” failed. The 1st Circuit Court judge refused to issue an injunction preventing the state from placing the measure on the ballots that was sent to the printers on September 7th. There are many stakeholders that are very concerned that the wording is too broad and could have serious consequences to both taxpayers and county revenues if it passes.
Hurricane Lane became the first major Hurricane threat to the state since Hurricane Iniki struck the island of Kauai 26 years ago. The category five hurricane approached from the south and the Big Island of Hawaii, Maui, and Oahu closed down and braced for Lane’s impact. Fortunately, the cooler water around Hawaii and the trade winds broke up the eye and Lane was a category one storm by the time that winds and rain reached the Big Island. Hurricane lane dropped about two feet of rain on parts of the Big Island and caused a wildfire in Lahaina, destroying over twenty homes. The remnants of Hurricane Lane then drenched Hanalei with twenty inches of rain as the area was still recovering from floods earlier this spring. Hanalei Valley suffered major flooding for the second time in six months. Oahu was fortunate to escape any severe weather.
The Hawaiian Volcano Observatory lowered its alert level for Kiluaea on August 17th, 11 days after lava stopped flowing from Fissure Eight and 15 days after the last collapse event occurred at the Halemaumau crater. Sulfur dioxide emission rates from Kiluaea have declined to the lowest levels since 2007. Geologists have warned that the lower activity could just be a temporary lull and residents need to remain vigilant. Lava recently covered the crater floor of Fissure Eight, but has not left the cone.
The Big Island may finally start turning the corner after the devastating eruption in May and flooding from Hurricane Lane. Hawai’i Volcanoes National Park is scheduled to reopen on September 22nd. Non-potable water has been restored to the Kilauea Visitors Center and park officials are trying to find a viewing area where people will be able to see the changes that have occurred at Halemaumau crater since Fissure Eight essentially drained the lava lake resulting in the collapse of the crater floor and surrounding walls. Approximately sixty collapse events have caused seismic events equal to a 5.0 magnitude earthquake. The reopening of the park will be modest with a few limited areas open to the public and restricted hours. The reopening will not include Jaggar Museum located next to the Halemaumau crater. The building has suffered significant structural damage from tens of thousands of earthquakes since May and the rim of the crater is extremely unstable.
Hawaii set a new one-month record for visitors in July. 939,360 people visited the islands, a 5% increase, and tourists spent about 5% more while here. Growth came from the U.S. and Canada while visitors from Asia, including Japan dropped.
Hawaiian Airlines is cancelling its three times a week nonstop service to Beijing after four years of operation. Apparently, tourism demand from China has not grown as expected.
State officials are giving Uber and Lyft the green light to operate permanently at Daniel K. Inouye International Airport in Honolulu after operating under a pilot program since December 1st. The state has received positive feedback from a majority of individuals during a series of public hearings in Honolulu, Kahului, Kona, and Lihue. The rule changes are still in the works on the outer islands.
There is some good news for pet owners moving to Hawaii. The state has revised its rabies wait period for those pets that have had their blood tested and received the necessary vaccinations from 120 days to 30 days prior to arriving to the islands. The expedited quarantine program, known as the 5 Day or Less Rabies Quarantine Program, allows owners to avoid having their pets subjected to the 120-day quarantine. Pets that do not receive the necessary blood testing and vaccinations must still be quarantined for 120 days after arriving on the islands. More details are available at the following website.
Honolulu won the 2018 Little League World Series thirteen years after Ewa Beach thrilled Oahu by bringing home Oahu’s first title and ten years after Waipio won the title. Honolulu won five straight games over four days, four games by a shutout including an 11 game thriller in the first game of the series Georgia.
The run and shoot offense has brought excitement back to University of Hawaii (UH) football fans for the first two games of the season. Quarterback, Cole McDonald, has accounted for eleven touchdowns (nine passing and two rushing) in his first two games against Colorado and Navy and UH has scored 102 points in those two games. The UH / Navy matchup generated so much interest on the island, that the University of Hawaii should seriously consider inviting the military academies to Oahu on a regular basis due to the military’s large presence on the island.
The state Department of Land and Natural Resources (DLNR) has reopened the Kaiwa Ride Trail, better known as the Lanikai Pillbox Trail after closing it for two months to replace rusted rebar, repair concrete spalling, and seal the roof of the pillboxes. DLNR recently held the first of three community meetings aimed at getting reducing the impact to the environment and community from thousands of hikers making the trek up the ridge every day. The numbers have exploded over the past five years as social media has made the hike a “must do” activity for those visiting Kailua. An estimated 1,200 people make the hike every day and new paths have exposed more bare soil increasing erosion and sediment on Aalapapa reef at Lanikai Beach.
A recent survey by Thumbtack, an online service company that connects businesses with local professionals surveyed small business owners across the country asking questions in eight categories relating to business friendliness. The results help reveal why it is difficult to maintain an investment property that provides a consistent rate of return. Honolulu ranked 56th of 57 cities and the state of Hawaii ranked 49th of 50 states in terms of business friendliness. Both Honolulu and the state of Hawaii received letter grades of “F” for licensing requirements, tax regulations, ease of hiring, and government websites. Hawaii joined Illinois as the only two states to fail the survey of small business owners.
Island Energy Services (IES) is shutting down its refinery operations and selling some of its assets to Hawaii’s one remaining refinery, Par Pacific. IES invested significant capital into its refinery business over the past two years and did not see an adequate return on investment. The closing of one refinery was not a surprise to many as the states regulatory agencies shift the focus of Hawaii’s energy needs away from fossil fuels.
Chick-fil-A appears to be finally coming to Hawaii. The fast food chain registered with the Hawaii Department of Commerce and Consumer Affairs to do business in the state following its July announcement that it will expand to Hawaii. The company plans to open its first restaurant on Oahu and will be owned and operated by a local resident like all other restaurants.
Hawaii’s low unemployment has created major issues on the Big Island resulting in a ten percent drop in coffee production. Farms literally had fruit rotting on the trees because there were not enough people willing to harvest the beans.
Waikiki is losing another landmark as the 24-hour family diner, Wailana Coffee House, closes its doors after 49 years in business. The restaurant has been a favorite for both local patrons and tourists, and Tim & Tracey met several clients at the diner over the years. Don Ho and other Waikiki entertainers frequented Wailana Coffee House in its prime. The restaurant will close on September 30th.