November 2010 E-Mail Update

This is my 11/10/10 e-mail update. I send a monthly e-mail out after the statistical data for the prior month has been posted on the Honolulu Board of Realtor’s website. Our staff automatically adds new e-mail addresses to our database. To be removed, hit reply and send me an e-mail stating that. Please include your first and last name so it’s easier for us to find you in our database.

Median sales prices barely changed last month, however, the number of sales declined considerably after being pumped up last year by federal tax credits. The median sales price for houses in October declined 1.4% to $595,750 from $604,500 compared to October a year ago. The number of sales slumped 17% to 241 from 290 for the same month a year ago. The decline was even larger for condo sales, a 21% drop to 310 from 394 a year ago while the median sales price remained unchanged at $300,000. The numbers are not surprising when you consider that a year ago we were at the height of first-time homebuyer credit that stimulated sales. Typically, October is a slow month for sales (closings). But, last year there were more house sales in October than in any other month; condo sales were at the second highest month in October.

Foreclosures are up which will impact upon both future sales and prices. Hawaii’s 1,617 foreclosure filings in September were enough to rank the state as the ninth highest in the nation, a dubious honor and Hawaii’s worst ranking ever. The September count represented an increase of 67% from the same month last year and amounted to one filing for every 317 households. The two hot spots on Oahu for September were Ewa Beach at one filing for every 103 households and Waianae at one filing for every 194 households.

On to politics . . . Hawaii is a blue Democratic light shining in the middle of the Pacific that completely ignores the Republican political red on the Mainland. Democrats in Hawaii knocked down much of the Hawaiian Republican establishment, taking back the governorship and the 1st Congressional District and reducing the GOP legislative minority to the same all-time low it held in 1993, just seven members out of 76 and only one out of 24 Senate seats. While Democrats nationally lost the U.S. House, Hawaii added a second liberal, female Japanese-American lawyer to their congressional delegation.

Democrat Neil Abercrombie, a former member of the House who gave up his Congressional seat in order to run for governor, defeated Lt. Gov. James “Duke” Aiona, his Republican opponent., 58% to 41%. The current Governor, Linda Lingle, became Hawaii’s first Republican governor in forty years when she was elected in 2002. She subsequently held the office for the maximum of two four-year terms. Abercrombie became the Democratic candidate when he defeated Honolulu mayor Mufi Hannemann in the primary. Hannemann had given up the mayoral position in order to compete in the gubernatorial race.

Hawaii Democrats swept their three congressional races. Colleen Hanabusa ended Republican Charles Djou’s six-month U.S. House term, which he had won in a winner-take-all race after Abercrombie had vacated the position. Hanabusa and Ed Case split the Democratic vote allowing Djou with 40% of the vote to achieve his victory. Case, who was in third place subsequently backed out of the primary race thereby allowing Hanabusa to run essentially unopposed in the primary. Hanabusa and Djou ran neck and neck from the September primary; polls taken a week prior to the election showing their race to be a statistical tie. As a result, both sides received considerable Mainland advertising funds, most of it in the form of daily, negative attack ads. Hanabusa pulled away and at the end of the race and won 53% to 47%.

Rep Mazie Hirono faced only token opposition from John Willoughby for her house seat with Mazie winning 72% to 25%. U.S. Sen. Daniel Inouye cruised to a 9th term in the Senate defeating Cam Cavasso 75% to 22%. The Democrats continued control of the U.S. Senate, which means Inouye, as senior member of the Senate, retains his post as president pro tempore . . . third in line to the president . . . and Chairman of the powerful Senate Appropriations Committee.

More than 500 homes built for use by the military at Barbers Point Naval Air Station may be sold as condominiums under a new conversion that is being studied. The homes were sold to San Francisco-based Carmel Partners five years ago and have been used as rentals. The base area, now known as Kalaeloa, has three housing areas under consideration: Orion Housing, Orion Park, and Makai Housing. The Makai homes were built in 1973 followed by the Orion and Orion Park homes in 1994. The homes are generally in good condition and feature more spacious layouts and yards than most town home projects in Hawaii. However, some elements don’t comply with current city building codes.

Forbes has ranked Honolulu as the third safest city in the United States. To calculate which cities with populations above 250,000 were the safest, Forbes used 2009 violent crimes statistics from the Federal Bureau of Investigation along with 2008 traffic fatality statistics from the National Highway. The city of Plano, TX, was ranked #1 followed by Portland, Honolulu, San Jose, and Omaha.

Hawaii hotels held their own against other island and international destinations for the first three quarters of the year according to a report issued in late October by Hotel Consultancy Hospitality Advisors, LLC. Oahu was the island destination with the greatest hotel demand. However, it is one thing to have hotel occupancy recover and completely different to have room rates climb back from their steep discounting. Hospitality Advisors estimate that it may take another four years to have Waikiki hotels recover from the recent tourism downturn.

Hawaii entered their football game at Boise State a three-touchdown underdog. Both teams were undefeated in the Western Athletic Conference (WAC). However, Boise State was undefeated overall and ranked in the top 3-4 teams nationwide while UH had lost games against both USC and Colorado and was unranked. Boise State quickly showed why they were such a heavy favorite. Their QB Kellen Moore, a leading candidate for the Heisman trophy, was 39-for-37 for 507 yards and three TD’s despite not playing in the 4th quarter. The Broncos won 42-7. They rolled up a school-record 737 yards against the outmanned Warriors from Hawaii.

MidWeek, a Honolulu Weekly Newspaper, published a two page article 11/3/10 on the growing bed bug infestation on Oahu. The State Department of Health is being inundated with phone calls, as bed bugs have infested a Waikiki hotel and UH dorm rooms in addition to individual homes. Stott Property Management has already had to treat four properties we manage. Bed bugs usually travel to a new location by hitching a ride on clothes, luggage and furniture. They are resistant to most forms of over-the-counter treatments; therefore, pest control experts should be used. If your rental property is furnished, you might want to consider removing the furniture after your current tenant vacates. In most cases, furniture does not increase rental rates. If you have questions, contact my son-in-law, Tim Kelley, our property manager, at 254-1515 (locally) or toll-free at 1-800-922-6811 or via e-mail at tim@stott.com.