October – December 2011 Quarterly Newsletter

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In December, sales of both houses and condos on Oahu declined compared to a year ago. There were 268 sales of houses compared to 312 sales a year ago and 333 sales of condos compared to 356 sales a year ago. Far more meaningful is the year-to-date sales data (January through December). These figures have steadied out comparing 2011 to 2010. There were 2,974 sales of houses in 2011 compared to 3,057 a year ago (–83) and 4,029 sales of condos in 2011 compared to 3,977 a year ago (+52).

The median (midway) sales price for December for houses improved from $585,000 in 2010 to $605,000 in 2011 (+3.4%). The median sales price for condos for December was $285,000 compared to $300,000 a year ago (–5.0%). The year-to-date sales prices continue to reflect a somewhat slumping housing market. The median sales price data for calendar year 2011 compared to 2010 follows: houses $575,000 compared to $593,000 (–3.0%) and for condos, $300,000 compared to $305,000 (–1.6%). The last newsletter contained an article discussing the use of median data versus the mean or arithmetical average data. Looking at year-to-date data, the mean sales price went from $712,117 to $707,402 (–0.7%) and for condos $358,384 to $357,881 (–0.1%)

The Housing Affordability Index measures the affordability of an area. An index of 100 means the median household income was 100% of what is necessary to qualify for the median-priced home using prevailing interest rates (currently very low). The figures are year-to-date for both houses and condos for the past three years. A higher number means greater affordability Houses: 73/66/63; Condos: 133/122/113. The increase over the past three years reflects the fact that properties have become increasingly more affordable over the past couple of years because of the low mortgage rates. Page #6 of the newsletter is a copy of a Wall Street Journal article that discusses this in more detail.

A Mixed Plate of Talk Story

Known affectionately as the “beloved mother of the outcasts,” Blessed Marianne Cope, who ministered to Hansen’s disease patients in Kalaupapa, is one step away from being canonized as a saint, Hawaii’s second after St. Damien who was canonized in 2009. Soon, little Kalaupapa on Molokai will have been the home for two saints, as the required two miracles have been attributed to Cope who is now scheduled to be canonized in October 2012. In 1883, Cope, a 45-year-old hospital administrator, left her order in Syracuse to answer the Hawaiian kingdom’s call for religious health care workers to care for leprosy patients. When she arrived, Damien was dying, and she succeeded him as the spiritual and moral leader of the settlement for the final 39 years of her life. Currently, there are three Franciscan nuns remaining in the settlement to assist the remaining patients. A few years ago, Mary Lou and I had a very interesting day touring Kalaupapa.

Honolulu is the least affordable city for renters nationwide and the second to least affordable for homeownership (behind San Francisco) according to a December report on the housing market in 200 metropolitan areas issued by the Washington, D.C.-based Center for Housing Policy. According to the author of the report, Hawaii faces a lot of unique challenges because it is an island-state that is tourism-driven with a lot of those jobs tending to be service jobs that don’t pay very well.  Plus, there’s just not a lot of space to develop so that creates a lot of demand for a small supply of housing.  While housing is expensive in Hawaii, it is also expensive in some other areas like New York City and San Francisco; however, those areas tend to be more affordable because of higher paying jobs in financial and technology sectors. The solution for many local families is to live in multi-generational households or to rent out part of their homes.

Hawaii requires mandatory health care for employees. Therefore, the state tends to rank high on many health issues compared to other states. This past year, Hawaii’s health standing improved with the islands moving up a notch to No. 4 in a national ranking by United Health Foundation, a not-for-profit, private foundation. Hawaii had the highest pubic health funding per person. They also had a very low rate of uninsured people, preventable hospitalizations, low levels of air pollution and a lower prevalence of obesity and diabetes compared to other states. VT held the top spot on the list for the 5^th consecutive year followed by NH, CT, HI, and MA. The bottom five states were MS, LA, OK, AR, and AL.

Two-thirds of Hawaii public school teachers who responded to a recent union poll said they hold one or more outside jobs. Those with outside income said they started working another job in the past one to three years. According to the teachers union, the poll helps illustrate the significant toll that furlough days, pay cuts and increased medical costs have had on teachers’ salaries since 2009. Salaries for Hawaii public school teachers vary widely depending on education, certifications, years of service and whether a teacher is serving in a shortage area.

Throngs of deal-hungry shoppers flocked to Hawaii stores on Monday, December 26^th to take advantage of after-Christmas markdowns to snap up everything from discounted TV’s and electronics to clothes on what was a day off work for many. December 26^th has become one of the busiest shopping days of the year on Oahu as people redeem gift cards, make merchandise exchanges and seek out post-Christmas bargains. By mid-day, the 10,000 parking spaces at Ala Moana Center were full with lines forming outside some of the higher-end shops as stores limited the number of people inside at any one time. Some patrons anticipated the crowds and arrived 1-2 hours before stores opened to take advantage of discounts of up to 60-70% available at stores like Neiman Marcus, Old Navy and Victoria’s Secret.

A Christmas vacation in Waikiki can be a very merry occasion unless you have to rent a car. A survey by an online car rental search firm found the average daily car rental rate at Honolulu Airport is about three times higher at Christmastime. The increase in car rates was the highest among 30 cities surveyed by CheapCarRental.net. The American Car Rental Association said industry pricing is generally based upon supply and demand. So, prices go up as reservations rise and car inventory falls. Spikes can occur near big events or major travel holidays. They tend to be more volatile in Hawaii because rental car companies can’t routinely shift inventory between markets. If you have to rent a car at Christmastime, book months in advance of your trip and/or consider using a small, economic rental company.

The International Market Place, Waikiki Town Center and the Miramar at Waikiki Hotel will be demolished and redeveloped into a three-level retail, dining and entertainment center in 2013, expected to cost up to $300 million that will revitalize an aging but iconic six-acre block in Waikiki. Queen Emma Land Co. detailed the project’s expansive scope in an environmental impact statement filed in late-December.

Despite the addition of a number of new shopping centers and stores, Hawaii lost 3,200 retail jobs over the past five years according to an analysis of data from the U.S. Bureau of Labor Statistics. Hawaii was one of 44 states to lose retail jobs since the end of 2006, according to an analysis by On Numbers, an affiliate of Pacific Business News. Hawaii had 70,300 retail jobs in November 2006, however, that number fell to 67,100 by November 2011, which reflects the impact of the recession that started in December 2007. The state was ranked 14^th in the nation for number of jobs lost and 26^th in terms of the percentage of jobs lost (- 4.55%).

There’s magic stirring in the jungles along the coast from Kahana Bay to Waimea Valley but it’s not the bright and friendly kind. It’s magic with menace, the kind so terrifying you can’t turn away. And, if the creators of ABC-TV’s new series, “The River,” deliver on their promise to scare viewers, the midseason replacement could become a terrifying ratings hit. “The River” is the story of the search for a wildlife expert who has vanished deep in the Amazon. To fund the search, his family agrees to allow a documentary crew to come along. The show’s creative team includes movie mogul, Stephen Spielberg, and is scheduled to begin airing in March. ABC has considerable experience using Hawaii as a background, as their mammoth TV hit “Lost” was shot in Hawaii.

Getting considerable early Oscar buzz is “The Descendants” starring George Clooney. The movie is the story of Matt King, a Honolulu attorney suddenly forced to deal with a failed marriage, his wife in a coma and two rebellious daughters. King, played by Clooney, is a descendant of Native Hawaiian Royalty whose status among the landed elite provided him wealth and standing as soon as he was born. The director of the movie is Alexander Payne who brought Santa Barbara’s wine country to life in his marvelous 2004 movie “Sideways” earning him an Oscar. From the Honolulu Star-Advertiser movie critic: “This deceptively breezy film is a kind of wonderful journey through the shifting landscape of human emotion, ranging from the deliciously awkward comedy to heartfelt, transformative tragedy and all points in between.”

A record four Hawaiian monk seals were born on Oahu this past year. They are an endangered species with only about 1,100 remaining. About 200 of them live on various Hawaiian Islands. This is the first time four seals have been born on Oahu since experts started keeping records 15 years ago. An ongoing problem is young pups interacting with people and becoming overly friendly. At 300 pounds, people-friendly monk seals are a threat to swimmers and to themselves because they have trouble foraging for food and defending themselves from sharks.

Hawaii will become the first state to have official high school surfing championships in 2013 when competition begins. There’s even talk now about adding body surfing and body boarding down the line. Since statehood there has been talk about a homegrown sport that would add another hook to keep at-risk students who have little interest in other scholastic or extracurricular pursuits in high school.