Here is our 04/07/2017 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.
Median sales prices continue to hover in record territory as demand continues to be strong with limited supply. March’s median sales price for single family homes was $752,000 (3.7% higher than March 2016) and for condos was S400,000 (3.9% higher than March 2016). The number of closed sales grew modestly and there are currently only 2.7 months of remaining inventory for both single family homes and condos. Demand will likely remain strong since the number of pending sales (properties under contract that have not yet closed) is 30% higher for houses and 24% higher for condos in March 2017 as compared to March 2016.
Hawaii’s unemployment dropped to 2.8% in February, the lowest rate since July of 2007. Tim and Tracey noticed the open sign was lit at the Nico’s Kailua, the new restaurant sharing the parking lot with Stott Real Estate, Inc. and stopped by. They met the owner who is planning a soft opening in April. He lamented that he has not found any employees as of yet to work in the restaurant. The tight labor market can make things frustrating for employers but it is a good sign for the economy.
The state Department of Transportation had awarded a contract to build a $73 million maintenance and cargo facility at the Honolulu Airport six years ago. The facility should have been finished in 2015 and is now languishing as the state, contractor, and sub-contractors sue each other over the construction debacle. The construction delays have effectively stalled other airport improvement projects that can’t begin until the maintenance and cargo airport project have been completed. In 2013, state officials predicted that the $739 million airport modernization project would be completed next year. Hawaiian Airlines is now being asked to take control of the project from the state to complete the project. Hawaiian Airlines has reported that the work completed so far has been pretty shoddy and they are most concerned about the significant cracks that have appeared in the hangar’s concrete flooring. The cracks could be the result of the foundation settling. Hawaiian Airline’s CEO estimates that the final bill for the hangar project will be about $120 million, about 65% over budget. The Honolulu Airport Modernization project was initially announced when Linda Lingle was Governor and the entire project was expected to take four years. Neil Abercrombie took office in 2010 and he ordered a pause in the plan for a review that delayed the project for a couple of years. It looks like Hawaii taxpayers will be footing the bill.
The Honolulu Star-Advertiser reports that a consultant has warned in a report that the 43-year-old Aloha Stadium has “served its useful life and is now a liability for fan experiences, a potential danger to public health and safety and a financial burden for maintenance and operations.” The report notes that inspections have identified pieces of the building that have fallen into public areas of the facility highlighting the risks to the public. The appointed nine-member authority is not bound by the reports. Can you imagine what would happen to a rental property owner if they received a report from a structural engineer citing immediate risks to a tenant’s health and well-being? Stott Property Management has seen the City and County of Honolulu withhold rent payments for arbitrary and minor inspection deficiencies. It appears that there is a double standard.
One state board has taken arrogance to a new level by skipping its own hearing on proposed rule changes. Several dozen people attended the hearing regarding changes to rules affecting affordable housing in Kakaako by the Hawaii Community Development Authority board. The HCDA board hired an attorney to listen to the testimony. 70 people submitted written testimony and ten people testified in person. A couple of developers were upset that the board was not present to hear what people said and ask questions of those people that showed up to testify. One developer asked a great question. “How do you move to decision making when you’re not here to listen to testifiers.”
Hawaii was the second worst state in nation behind North Dakota in managing taxpayer dollars according to a new report by WalletHub. The website looked at 23 metrics to compare the quality and efficiency of state-government services across education, health, safety, economy, and infrastructure & pollution. The study reports that Hawaii taxpayers pay the 3rd most state taxes in the nation while receiving below average service in all categories measured with the exception of health.
The contested case hearing for the Thirty Meter Telescope project (TMT) concluded in March after 44 days of witness testimony. 71 people testified in the case and it is estimated that it could take court reporters five to six weeks to complete the written transcripts. Once the written transcripts have been completed, the parties in the case have 30 days to submit their proposed decisions, followed by a two-week period in which the parties can object to the other party’s proposal. After the process is completed, the hearings officer will make the decision on whether TMT will receive the permit to begin construction. Even if the hearings officer approves the permit, another judge ruled that another contested case hearing should have been held over the project’s sublease with the University of Hawaii. TMT is taking concurrent steps to build the telescope in the Canary Islands on the same time scale. TMT’s international board is making the case that the mountain in the Canary Islands would be an excellent alternative and Spanish lawmakers have embraced the project. TMT officials have reached an agreement to build their giant telescope on the island of La Palma in case they are unable to begin construction on Mauna Kea next year. It would be a shame if Hawaii’s governments’ focus on bureaucratically driven, politically correct processes once again get in the way of a project that receives strong support from a majority of the residents. Remember the SuperFerry?
Tesla Energy, a division of Tesla and SolarCity, completed its major solar power farm and energy storage project with a blessing ceremony. 55,000 solar panels and 272 Tesla Powerpacks were installed on 50 acres of land near Lihue on the island of Kauai. The system is believed to be the first utility scale solar powered system that can provide electricity from solar energy on demand, even at night. The project brings Kauai Island Utility Cooperative (KIUC) renewable energy generation to over 40%. KIUC signed a 20-year power purchase agreement from the project at 13.9 cents per kilowatt-hour, cheaper than the current cost of oil generated electricity.
A new community being developed on the Big Island will be off the electric grid. The resort community in Waikoloa will consist of 350 single family homes and 60 condominiums that will have rooftop solar energy systems and Blue Planet Energy’s Blue Ion battery storage systems. Waikoloa gets less than 11 inches of rain per year, making it a great location to harness solar energy. If an individual homeowner needs more energy than the home produces, additional power will be available from a community storage system for a fee lower than current utility rates. The community microgrid will also be tied into a central backup power supply to ensure continuity of power.
Two University of Hawaii medical school researchers warn against following some methods of treating box jellyfish stings on WebMD and the Mayo Clinic’s website. First aid for box jellyfish requires two steps. The tentacles and their stinging cells must first be inactivated and removed, and then the venom that is already in the skin must be treated. Less than one percent of box jellyfish stinging cells on a tentacle fire when a person is first stung. Vinegar is the best home remedy for inactivating the remaining stinging cells and helps dislodge the tentacles. The remaining tentacles can then be safely removed with tweezers. Using a heat pack or submersing the effective area in hot water substantially reduces the venom’s activity that has already been injected into the skin. Scraping tentacles off with a credit card, submersing the area in cold water, and rinsing with seawater actually make the sting worse and potentially life threatening. The best solution was actually developed by one of the researchers, Sting No More spray and cream. The Department of Defense had the remedy developed and the contract required the resulting solutions be commercialized for public use. The state of Hawaii puts out warnings when box jellyfish are expected to threaten beaches. Your best course of action is to heed those warnings and stay out of the water during those times.
Don’t expect to use Uber or Lyft if you fly into any of Hawaii’s airports. The two ridesharing companies are still not allowed to conduct business at the airport. Uber and Lyft drivers can drop departing passengers off at the airport; they just can’t pick up any arriving passengers at the airport.
A new activity on Oahu will begin this summer with the arrival of Semisub, Inc. The 85-foot boat was built in California and can shift from a catamaran capable of traveling 40 knots to a semi submersible in about six minutes. The ship, which can hold up to 149 passengers, will offer four daily tours with meals served by Chef Chai. Some of the farm-to-table menu items include apple banana bread, a king crab cake burger, and miso sea bass.
Turtle Bay now has 15 miles of biking and hiking trails after a $45,000 renovation. The trails will house sporting tourism events including the largest overnight running relay series this month. The Ragnar Trail Relay will take place on April 21 and 22. It is expected to bring 2,600 participants to the new trail, which includes six miles of land reserved for mountain biking. The first phase was finished in 2015 and the recently completed second phase will open after the relay. The trails are the only designated Bike Park on Oahu and will offer resort activities alongside annual memberships for kamaaina. Membership prices will range from $49 to $99 per year and will help fund ongoing trail maintenance since the trails are a private venture.