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September 2022 Email Update

The August median price for single-family homes was $1,125,000 (7.2% higher than August 2021) and for condos was $498,000 (0.3% lower than August 2021) as higher mortgage interest rates and sales prices continue to dampen demand.  The number of single-family homes sold in August was 314, 26.1% lower than last year, and condos sold was 508, 24.7% lower than last year.  The number of closed sales has returned to pre-pandemic levels.  Properties under contract but not yet sold have dropped even more with the number of single-family homes under contract falling to 312, 24.8% lower than last year and condos under contract falling to 654, 33.2% lower than last year.  The reduction in demand has exceeded the reduction in new supply resulting in slightly higher inventories.  There are currently 1.7 months of single-family homes and 1.8 months of condos available.

The home exemption filing deadline for the City and County of Honolulu is September 30th for next year’s property taxes.  The home exemption is particularly important for owner occupants due to recent changes that charge property owners that don’t have an exemption higher property tax rate.  You can file a homeowner’s exemption by using the link below.

DEPARTMENT OF BUDGET AND FISCAL SERVICES REAL PROPERTY ASSESSMENT DIVISION

The Honolulu City Council is considering increased shoreline setbacks that potential buyers should pay attention to before purchasing an oceanfront lot for future development.  The new rule would raise the 40-foot setback to a minimum of 60 feet and up to 130 feet should the erosion and sea-level rise impact the property.  The rate of the setback increase would equal 70 times the annual erosion rate of the property and is based on the average 70-year house lifetime.

Housing affordability, or the lack thereof, was headlined in August by the Wall Street Journal.  Rising interest rates and rising home prices have resulted in a $650 monthly increase in June 2022 mortgage payments compared to January 2022.  Sellers will have to temper their expectations as fewer buyers will result in fewer bidding wars on available homes.

Homeowners building plans will suffer continued delays as the Department of Planning and Permitting (DPP) reported a backlog 8,000 permits in the initial processing phase or department review despite announcements by Mayor Rick Blangiardi that he would make addressing the backlog a priority.  City councilors promise to streamline the process instead of removing DPP from the review process and holding contractors accountable for their work.  Residential and commercial permits currently take six months to two years to get approved.

Visitor counts have reached the highest level since the months just prior to the COVID-19 pandemic with July domestic visitor counts exceeding the July 2019 numbers.  International traveler numbers are still down with Japan serving as the largest market for international visitors.  Visitor spending rose 5.8% compared to July 2019 to $11.16 billion.

The state Department of Business, Economic Development and Tourism (DBEDT) lowered its growth forecast for 2022 and 2023 due to high inflation and the resulting rise in interest rates.  DBEDT lowered its 2022 growth forecast to 2.6% from 3.2% and its 2023 growth forecast to 1.7 versus 2.5%.  Ironically, the state predicts weakness in the housing industry even though sales prices are at record highs and state politicians constantly talk about solving the housing shortage on the islands.  Tourism remains the bright spot with visitor counts reaching 86.8% of 2019 numbers and spending has reached record levels as a result of inflation.  DBEDT predicts that a shortage of workers will constrain future growth as Hawaii continues to experience a net migration of people out of the state searching for better opportunities.

Department of Business, Economic Development & Tourism

A study by Grassroot Institute of Hawaii puts to rest the bogus claim that mainland buyers drive up Hawaii home prices.  Data shows that the percentage of out-of-state buyers dropped the years between 2010 and 2020, the percentage of local buyers trended up, and out-of-state buyers were not bidding on the same properties as local buyers.  The main culprit for rising home prices is the large number of government barriers to development in the form of land use, zoning, and homebuilding regulations.  The main reason for Hawaii’s housing shortage is that Hawaii leads the nation in regulations resulting in a severe shortage.

Condo owners have another financial headache to contend with as described in a Civil Beat article.  Honolulu has the second highest maintenance fees in the country behind New York City.  The average maintenance fee in Honolulu is $762 per month compared to the national average of $286 per month.  The average Honolulu maintenance fee is equal to a single-family home mortgage elsewhere making Honolulu condos as expensive as many single-family homes.  High insurance premiums, expensive maintenance items (elevators, central A/C, etc.), and wages drive the high fees and prices continue to rise as a building ages.

Hawaii residents lead the nation in life expectancy at an average lifespan of 80.7 years.  Hawaii is the only state to exceed the 80-year threshold and its average life expectancy is nine years higher than last place Mississippi.

A new state agency is not only developing affordable housing property for teachers on Maui, but it also redefined the term.  The Honolulu Star Advertiser reported that David Ige release $15 million to build housing in Lahainaluna.  Tim imagined an apartment complex with upwards of 50 units to provide much needed housing for Maui’s educators.  However, since public contractors are involved, Maui County projects that the money will build 10 to 16 homes at a cost of $937,500 to $1.5 million per home.  The per unit cost exceeds Maui’s median home price by over $100,000 at the lower estimate and begs the question?  Why doesn’t Maui County just go out and purchase homes on the real estate market?  There are many answers, and most are too snarky to include in this paragraph.  The state proves once again that it should just get out of the way and deregulate the housing market so private contractors can actually build affordable housing.

"A BILL FOR AN ACT RELATING TO LAND"

Governor David Ige signed a new emergency proclamation suspending the state licensing requirement for visiting nurses and doctors as the state’s hospitals are operating at capacity even though the COVID-19 summer surge is easing.  Staffing shortages continue as 800 to 1,000 healthcare workers are unavailable on any given day due to sickness.

The Honolulu Authority for Rapid Transportation (HART) started extensive operational testing on Monday, 8/29/2022 with much shorter delays than previous efforts.  The first test run started 10 minutes late because one of the stations was not ready to receive the train.  The next day’s test run started 5 minutes late due to delayed train maintenance.  The testing is expected to run at least 90 days and the system must pass 98.5% of the time over 30 days.  HART still has construction hurdles to resolve before the first leg of the project can be turned over to the city.  The Federal Transit Authority has not approved the shortened 18.75 mile, 19 station route and engineers must review the severity of cracks discovered in station supports.

Chinatown residents, encouraged by a smaller homeless population and an increased police presence, picked up trash and painted over graffiti on buildings on August 27th and August 28th.  The residents and businesspeople were joined by Mayor Rick Blangiardi, Honolulu Prosecutor Steve Alm, and Police Chief Joe Logan.  Neighbors hope that the new civic involvement creates the type of positive momentum that Chinatown has struggled to create over the past few decades.

Oahu’s first solar farm backed by batteries started selling electricity to Hawaiian Electric Company in August.  The 39-Megawatt facility is the first of seven projects slated to come online in the next couple of years as HECO scrambles to replace the power supplied by its coal-powered plant scheduled to close in September.  HECO announced it will raise residential rates by 7% to support its renewable energy push.

Mililani I Solar now sending clean energy to Oahu grid

The University of Hawaii is not waiting around for the planned replacement of Aloha Stadium to seat enough fans to support a Division I football program.  Too many steps are required to replace the rusted stadium and Hawaii has repeatedly failed to complete large projects on time, on budget, if ever.  The modification will increase seating to 16,909 in time for the 2023 football season.  The next hurdle will be convincing 16,000 people to attend a home game.

Hawaiian Airlines has teamed up with the University of Hawaii to expand its aviation maintenance certification and training program by donating $1 million per year and offering experienced employees to help train and educate students.  The initiative aims to double enrollment to 100 students per semester and shorten the apprenticeship timeline by two years.  The aviation industry is struggling with a shortage of certified mechanics and must hire an estimated 610,000 mechanics over the next decade to keep up with air travel demand.

The Honolulu Little League All-Star Team capped a championship run at the Little League World Series in Williamsport, PA with a 13-3 victory over Curacau on August 28th.  The team of 12-year-olds dominated the tournament winning six games by a combined score of 60-5 and won four games by the ten-run mercy rule.  The coach from Tennessee complemented the kids and head coach after his team’s 5-1 loss by stating, “they might be the best United States team that’s ever been through here.  I hate that they are so good, but I also hate that they are all so nice.  Their coach Gerald is so great.  Their kids are so well-mannered and very respectful.”  Congratulations to the boys.

Feral pigs have invaded the upscale Aina Haina neighborhood whose population has exploded during the COVID-19 pandemic ruining landscaping and threatening residents.  Pigs have been important part of Hawaiian culture and is still an important source of protein.  Early in the pandemic, neighbors started feeding the pigs mangos and other scraps.  Well-fed pigs will reproduce prolifically, and a sow can deliver two litters per year often totaling thirteen piglets.  The neighborhood board has asked residents to refrain from feeding the pigs.

As Hawaii’s feral pig population grows, a ‘non-toxic’ birth control could offer a solution

Waikiki Elementary School fourth graders named Rocky’s latest son, Koalani which means heavenly warrior in Hawaii. The children claimed that it fits Koalani’s independent nature and may be appropriate as the son of a seal named after a fictitious boxer in Philadelphia.

Koalani was weaned on August 18th and relocated by the state Department of Land and Natural Resources to a remote Oahu beach where he can grow up in the company of other monk seals.  He received is flipper tags and a morbillivirus vaccine before being set free.  A pup’s naivete’ and curiosity helps reduce stress during the relocation process.  While Rocky was nursing Koalani, Rocky’s granddaughter, Imikai, gave birth to Rocky’s great-granddaughter, RQ88.  RQ88 is the fifth known monk seal to be born on Lanai since 2014.  Hawaii monk seals are one of the most endangered seals species and receive both federal and state protection.

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

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