Here is our 12/08/2016 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 prices on Oahu continue to rise due to a lack of inventory. The November median price for single family homes was $750,000 (4.8% higher than November 2015) and for condos was $395,000 (13.7% higher than November 2015). Competition among buyers for more affordable condos and houses has been fierce with multiple offers being the norm. Stott Real Estate recently had a client who was bidding against six other buyers on a more affordable condo in Mililani. Relief for buyers is not on the horizon since there is only 2.7 months of inventory for both single family homes and condos. Inventory has been slowly building at the higher end of the market now that affordability is becoming more of an issue. There is currently 6.4 months of remaining inventory for houses priced between $1 million and $2 million and 9.9 months of remaining inventory for condos priced above $700,000. The housing cycle is following historical trends where the higher end of the market continues to lead the lower end of the market. The slowing of the higher end could be a signal that prices will peak in the next year or two.
December 7th marked the 75th anniversary of Japan’s attack on Pearl Harbor. The 75th commemoration of the attacks on Pearl Harbor includes events and memorials dedicated to the USS Utah, USS Oklahoma, and USS Arizona. Both local and national newspapers have been documenting the heroics of those that died and survived on December 7, 1941 and of those 90 plus year old men and women that returned to take part in the numerous events honoring and remembering those heroes. Tim and Tracey sat down at Wailuna Coffee Shop in Waikiki with the son-in-law of a Pearl Harbor survivor on Friday, December 2nd. He shared that he had to drive his father-in-law home the previous evening when strangers kept buying scotch to thank him for his service. His father-in-law served on the USS Tennessee and woke up in a hospital bed after a torpedo struck the battleship and blew him into Pearl Harbor.
Visitor spending on Oahu has dropped 2% in 2016 even though the number of visitors continues to climb and set records. The Hawaii Tourism Authority points to a weakening yen being part of the issue since the highest spenders generally come from Japan. A second trend that Tim and Tracey have noted over the past few years is that returning tourists are venturing out from Waikiki to visit and experience other towns like Kailua. The trend has been helping out local businesses even though high end retail has suffered through declines.
Local election results in Hawaii show that the state continues to be dominated by one party rule. When Stanley Chang defeated incumbent Sam Sloan, a Republican, Hawaii became the only state in the nation with an entirely Democratic state Senate. Mayor Kirk Caldwell fended off challenger Charles Djou, and Brian Schatz, Colleen Hanabusa, and Tulsi Gabbard (all Democrats) cruised to victory. The domination of the Democrats in Hawaii runs counter to Republican gains in the rest of the country where Republicans have gained steadily since 2008. There are currently 33 Republican governors, Republican majorities control 69 of the 99 state legislatures, Republicans control both the House of Representatives and the Senate, and Donald Trump was elected President.
David Ige pledged in his January’s State of the State speech to cool 1,000 classrooms by then end of the year and was subsequently funded by the state legislation to the tune of $100 million. On November 15th, the Department of Education (DOE) had reported that they finished cooling 42 classrooms statewide. General contractors involved with the process have complained that the overly complicated project specifications caused significant delays and resulted in initial bids coming in significantly over budget. The DOE now projects that 1,000 classrooms should have air conditioning by the end of 2017.
The state Department of Land and Natural Resources purchased 635 acres of conservation land from Bishop Museum. The land includes portions of the Aiea Loop and Ridge trails, is a home to endangered plants and birds, and acts as a water catchment and filtration system for Honolulu’s groundwater supply. The primary goal is to preserve the area and protect endangered species. The popular trails are one of the few places on Oahu to see quality native forests and native birds in their natural environments. The trails are open for hiking and mountain biking.
State auditors have concluded that there is insufficient administration of the Department of Taxation’s film tax credit. One of the most interesting comments from the Hawaii Film Office who challenged the auditor’s conclusion that economic benefits to Hawaii were being overstated was that the Hawaii Film Office was going to request an accounting position within the group. How can you measure the effectiveness of a tax credit without the services of an accountant?
While computer and website hacking still attract most of the headlines, old fashion check fraud still costs businesses, non-profits, and banks. The latest example occurred when the Hawaii Visitors and Convention Bureau mailed a $1 million check to an advertising agency that was intercepted and cashed in Arizona. First Hawaiian Bank will end up suffering the loss if the Honolulu Police Department can’t locate the thieves and recover the money.
The 9th U.S. Circuit Court of Appeals ruled that three Hawaii counties may not regulate genetically modified crops or pesticides. As a result, Maui’s ordinance banning genetically engineered farming, Kauai’s notification requirements for pesticide use, and Hawaii County’s prohibition of open-air testing for genetically modified crops will not go into effect. The decision was a victory for seed companies Monsanto and Syngenta.
The Honolulu Police Department (HPD) earned some recognition for quickly responding to criticism from neighborhood boards and to an article by the Honolulu Star-Advertiser for failing to list violent crimes on its crime data map. HPD added ten new categories to the site including arson, assault, drug / alcohol violations, homicide, and robberies. The welcomed change now puts HPD’s crime mapping site on par with other departments around the country. You can check out the map using the following link:
The Honolulu Zoo is going to have to look once again for a new director. Baird Fleming, who was finally named director after serving as acting director when his three predecessors resigned, announced his resignation effective December 15th for a position back on the mainland. High director turnover was one of the reasons why the zoo lost its accreditation back in March. Fortunately, the zoo has not had to return any of the currently 90 animals on loan, which is a possible result of losing accreditation.
Customers wanting to install new roof-top photovoltaic systems (PV) currently have only one option available. Oahu reached the arbitrary grid-supply cap back in October and new systems must be self-supply. In other words, the new systems must come with battery systems to store any excess electricity generated during the day for night use. Hawaiian Electric Company (HECO) has received 322 applications as of mid-November and approved about 100 of those applications.
Century West condominiums recently installed a first of its kind energy system in the state that combines solar and battery storage resources through a purchase power agreement between EnSync Energy Systems and the condo unit owners. The system was installed to reduce the condo association’s electricity costs and provide electricity during power grid outages.
Outrigger Hotels and Resorts announced that it will sell its hotel portfolio to Colorado-based KSL Capital Partners who specializes in travel and leisure enterprises. Outrigger, which was founded in 1947, has been a local business leader in the hotel industry having a presence on all Hawaiian Islands and has more recently expanded to Guam, Fiji, Thailand, Mauritius, and the Maldives. While the sale of Hawaii’s hotel brand has surprised many, Outrigger’s business leaders appear to have come to the conclusion that new capital is needed to compete with the growing competition of world class destinations in Hawaii. The arrival of Disney and the expected construction of an Atlantis Resort complex in Ko Olina, and multiple luxury Waikiki brands have raised the stakes on Oahu, in particular.
Atlantis Resorts formed a new Hawaii business in the state in preparation for Atlantis Resorts’ first project in the United States. The 26-acre site next to Disney’s Aulani will be similar to Atlantis Dubai, which features a waterpark, aquarium, dolphin encounter area, a sea lion park, and is home to more than 20 restaurants, nightclubs, and spas.
Howard Hughes Corporations Ward Village reached a major milestone by welcoming residents to Waiea, the village’s first mixed-use residential tower. Waiea includes 174 condos and multiple dining and entertaining spaces. Amenities include an infinity edge lap pool, a fitness center, a private theatre, golf simulator, and spa. Anaha will open in mid-2017 with 317 condos, and Aeo will be completed in 2018 will include 466 condos and be home to Oahu’s flagship Whole Foods Market. Ke Kilohana is scheduled for a 2019 with 424 more condos and will host Longs Drugs flagship store. A fifth project, Gateway Towers is currently available for sale. When completed, Ward Village will be home to over 4,000 residences and over 1 million square feet of retail space.
Cinnamon’s Restaurant, a popular Hawaii breakfast restaurant known for its red velvet pancakes, is expanding to an affluent Las Vegas suburb. Cinnamon’s first opened in Kailua in 1985 and has previously expanded to Waikiki and Japan.
A summit was recently held at the state capital to try and cope with the threat of rapid ohia death that has killed about 50,000 acres of ohia forest on the Big Island. Supporters are asking the state for $10 million to deal with the threat over the next three years. Rapid ohia death is caused by two types of fungus that attack the trees through tears or cuts in the tree bark and block the flow of water through the trunk. The fungi are not found in any other part of the world. $4.4 million of the funding request will go to research while the remaining funds will be used for quarantine efforts and to help land managers detect the disease. Experts don’t expect to be able to eradicate the disease. They only hope to slow the spread and protect the forests that remain healthy.
Haleiwa’s John John Florence, returned to the North Shore to commence his quest for a third Triple Crown of Surfing title, after recently wrapping up his first World Surf League championship in Portugal last month.
The University of Hawaii Rainbow Wahine’s volleyball season came to an end in the second round of the NCAA tournament with a straight set loss to #2 Minnesota. Any realistic shot of upsetting Minnesota were quickly doused when Big West player of the year, Nikki Taylor, injured her left ankle three points into the match and had to sit out the remainder. The #12 ranked UH Rainbow Wahine finished the season 23 – 6.
Hawaii held its first women’s professional tournament, the Hawaii Open, over the Thanksgiving holiday, which featured the #23 player in the world as the number 1 seed. American CiCi Bellis, ranked #90 in the world, won her first Women’s Tennis Association (WTA) tournament by beating China’s Shuai Zhang, ranked #23 in the world, 6-4, 6-2. CiCi is only 17 years old and will take a 15-match winning streak into 2017 after winning two earlier International Tennis Federation circuit events October.
Thanksgiving Fun Fact: Tracey cooked her first turkey at the age of 50 for a gathering of Kailua friends. Tim and Tracey have enjoyed recent Thanksgivings in George and Mary Lou’s house, on a fast attack submarine, at friends in Groton, Connecticut, and at Tim’s parents in Granbury, Texas.
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