Here is our 12/11/2018 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.
November’s median sales price for single-family homes was $797,000 (3.0% higher than November 2017) and for condos was $420,000 (3.7% higher than November 2017). Demand continues to weaken with the number of single-family homes sales dropping 13.3% and the number of condos sales dropping 14.4% compared to November 2017. Pending sales, properties under contract but have not sold yet, have fallen compared to November 2017 20.3% for single-family homes and 21.0% for condos. Weaker demand is now starting up on the supply side with the number of active listings jumping 28.4% for single-family homes and 14.4% for condos compared to November 2017. Even though supply is increasing, the housing market is still relatively tight in absolute terms. There is still only 3.1 months of remaining inventory of single-family homes and condos when six months of remaining inventory is considered a balanced market.
The state Department of Business, Economic Development and Tourism has lowered its economic growth estimate to one percent this year, lowering its estimate from 1.5% growth in August and 1.9% growth in May. The state lowered its estimate when the U.S. Bureau of Economic Analysis reported that Hawaii’s GDP adjusted for inflation experienced zero growth in the first quarter of 2018.
A recent report by J.P. Morgan has ranked Hawaii among the most financially stressed states due to unfunded pension and healthcare obligations to public workers. The state currently has an unfunded $9.6 billion pension fund liability and a $9.53 billion in unfunded health care obligations. The report estimates that committing 15% of the states revenue towards the obligations is generally manageably and Hawaii would need to commit 37% of the states revenue each year to meet those obligations. Only Illinois and New Jersey have greater financial holes.
Hawaii once again ranks near the bottom of state business environments coming in at number 46 in Forbes’ annual ranking. Hawaii ranked 48th in business costs and 47th in regulatory environment. Forbes compared the states across seven metrics including business costs, labor supply, regulatory environment, economic climate, growth prospects, quality of life, and population.
The Central Ala Moana, a mostly affordable Honolulu condominium project opened its sales office this month. 60% of the units are designated affordable, meaning that the units are reserved for buyers who make 80% to 140% of the median income, must be owner occupants, and must attend a seminar. Studios start in the high twos, one-bedroom units start in the high threes, and two-bedroom units start in the low fives. 40% of the units are available at market rates. There are no market rate studio units, one-bedroom units start in the high fives and two-bedroom units start around $800,000. Please e-mail us at email@example.com if you would like more information.
The Aloha Stadium Authority has announced that it will hire a firm to develop a stadium master plan and issue an environmental impact statement (EIS) and the state legislature has appropriated $10 million for the work. The project includes studies and planning for the demolition of the existing stadium and construction for a new stadium. The study will consider mixed-use development of the entire Aloha Stadium Site and possible alternative sites. A new stadium is sorely needed since the most recent repair estimates for the existing stadium total $421 million while the most recent price tags for a new stadium run just under $200 million. This will be the third study completed in the past few years and hopefully result in concrete action.
The Hawaii State Legislature has hired Congresswoman Colleen Hanabusa to represent the state against two open-government groups that seek to end the practice of gut and replace in Hawaii. Common Cause and the League of Women Voters argue the practice of removing the contents of a bill once it passes one chamber and replaces it with different language when the bill is reviewed by the other chamber unconstitutionally removes the public’s ability to participate in the lawmaking process. The Attorney General represents the state and its interests in lawsuits and the move appears to be a slap at Governor David Ige’s administration. Governor David Ige defeated Congresswoman Colleen Hanabusa in the last Democratic primary for governor and she was supported by most of the top leaders in the state legislature.
A plan to speed up the building permit processing won final approval by the Honolulu City Council on November 14th for one- and two-family homes over the objection of the Department of Planning and Permitting that has taken up to a year to approve building permits. One contractor testified that he had to lay off 30 of his 83 carpenters over the past year due to delays in receiving approval of permit applications. In typical bureaucratic fashion, the department claimed that shortening the review time and relying on licensed professionals to do their job and serve their clients would result in lower safety and quality. The city council recognized that city government must get out of the way to allow the private sector to help solve the housing shortage and affordability crisis on Oahu. Mayor Kirk Caldwell announced on November 28th that he would allow the bill to become law in 60 days without his signature. He announced that the city will hire four new plan reviewers starting in December and bring back former or retired staffers on 89-day contracts to work through the backlog. He also stated a new policy of immediately rejecting incomplete plans and limiting the number of reviews for commercial and residential projects to three cycles. Caldwell also mentioned increasing the number of permits filed online for projects like installing solar hot water, or completing certain electrical work, plumbing, or repairs to single-family homes.
A separate panel highlighted the cost to businesses looking to build in Hawaii due to the delays in the building and entitlements process. It currently takes an average of two to three times longer to get the necessary permits to build on Hawaii than the rest of the country. Panel experts contend that the most expensive part of building on Hawaii is the process cost of gaining the necessary approvals from county and state government.
Mayor Kirk Caldwell vetoed a bill passed by the city council that would have given about 370 high rise condos without automatic sprinkler systems more time to conduct a safety evaluation and implement corrective actions. The current law requires the condos to complete the evaluations by 2021 and comply with the recommendations by May 2024. The city council passed the bill 8-0 because the condo associations and the Honolulu Fire Department have not yet agreed upon the standards to determine if a building needs to be retrofitted with automatic sprinklers.
University of Hawaii researchers have developed a potential Zika vaccine three years after the virus was linked to birth defects in Brazil. The virus is transmitted to humans from infected mosquitos and from human transmission through sex. The virus can cause microcephaly which delays brain development in newborns and is suspected of also causing miscarriages by killing the fetus. The vaccine has proved to be effective in protecting mice and monkeys and trials will continue with humans. The researchers us a protein from the virus made in insect cells to develop the vaccine. Clinical trials typically take about fifteen years and researchers hope fast tracking the vaccine will reduce the time.
The successful planting of a test crop of oysters in Pearl Harbor’s West Loch is prompting a nonprofit, Waiwai Ola Waterkeepers Hawaii Islands to explore expanding the program to Maui’s Ma’alaea Harbor and the Ala Wai Canal. Introducing oysters is not harmful to the animals whose feeding process naturally filters the surrounding water. The shellfish absorb almost anything including pollutants. The useful materials are absorbed and help grow the oyster’s shell and the remainder is contained in mucus that sinks to the ocean floor.
A North Carolina doctor and his wife have filed a class-action lawsuit against Marriott International and Kyo-Ya Hotels and Resorts for failing to inform them of the strike before they arrived for their honeymoon. By the time that the couple arrived at the hotel, the strike had been going on for about one month. Tim and Tracey were a little surprised that the Waikiki hotels embroiled in the strike with Unite Here Local 5 were not warning visitors ahead of time and were not providing room discounts to customers for the lack of service. It seems that some customers have arrived at the same conclusion.
The Unite Here Local 5 ratified a new contract on November 27 ending the 51-day strike. Untipped workers will receive a $1.50 per hour increase the first year, $1 per hour increase the second year, $1.76 per hour increase in the third year, and a $1.44 per hour increase in the fourth year. The average Local 5 housekeeper currently makes about $22 per hour.
Matson’s newest container ship, the Daniel K. Inouye, arrived in Honolulu Harbor to make its first delivery. The 850-foot long ship, the largest cargo ship ever built in the United States of America, can carry 3,600 shipping containers. The ship is the first of four ordered by Matson to replace its older ships in the fleet providing more cost savings and a more environmentally friendly shipping solution for Hawaii.
Bikeshare Hawaii reported that almost 101,000 rides occurred in the month of October, a 62% increase compared to October 2017. Members accounted for two-thirds of the rides and each bike is averaging 3.2 rides per day. The non-profit did not report any financials for the month. Bikeshare Hawaii plans on installing new stations in Iwilei, Makiki, and at the University of Hawaii at Manoa. A second company, Ride Sharee, received approval from the City and County of Honolulu to commence dock-less bike sharing operations in October. Ride Sharee’s business model conducts all transactions on private property and city property may not be used to park the bikes.
The Eddie Aikau Big Wave Invitational Surf Contest, known as “The Eddie,” is back with an all-Hawaiian group of sponsors. “The Eddie” was put on hold in 2017 due to a falling our between past sponsor Quiksilver and the Aikau family. The competition is held in Waimea Bay when surf heights are consistently forecast to be 20 feet or higher. The last competition was held in 2016.
The University of Hawaii (UH) football team finished the season at 8 – 5 after beating San Diego State 31 – 30, in overtime. It is the first time that UH has finished the regular season with a winning record in seven years. UH will play Louisiana Tech in the Hawaii Bowl on December 22nd at Aloha Stadium.
The UH Wahine volleyball team lost 3-2 in the first round of the NCAA tournament to Baylor University on November 29th after taking the first two sets and being up 18-14 in the fourth set. The disappointing loss was the first against a Baylor team. The Wahine finished the season 18-9, finished 2nd in the Big West Conference behind Cal Poly, and participated in their 26th consecutive NCAA tournament.
Some of Oahu’s bars have created speakeasies in a fun new trend for people who would like to enjoy cocktails and pupus in an intimate setting including Kailua’s Gaslamp, Kakaako’s Hi Brau Room, Harry’s Hardware Emporium, and most recently Backbar at the Sky Waikiki. Tim and Tracey recently visited Kailua’s Gaslamp for the first time with friends and had a fabulous time. Reservation holders give the hostess a password provided to gain access to the speakeasy in the back of the Kailua Town Pub and Grill. The hand crafted mixed drinks and food were excellent and the quiet dark atmosphere with a sax player in the background was an amazing contrast to the bright, lively, and noisy bar that you had to walk through.
Tim, Tracey, and Lynelle ate at Chef Roy Yamaguchi’s new Kailua restaurant, Goen Dining & Bar, at the Lau Hala Shops in Kailua. They were glad that they made reservations because there was a 90-minute wait at 6:30 for guests who did not make one. Chef Roy Yamaguchi was present at the restaurant overseeing the activity and greeting guests on the Saturday after Thanksgiving. The waitress’s recommendation, the ribeye steak, was excellent. The open-air restaurant and bar is a fun edition to the Kailua scene.
Hawaii’s own Bruno Mars returned home to play in three sold out performances at Aloha Stadium. Around 108,000 people enjoyed the show over three nights and fans were pleasantly surprised by the preparation that went into hosting the event. Offsite parking and shuttle service eliminated the anticipated traffic jam around Aloha Stadium that has plagued University of Hawaii football games in the past.
The World Surf League (WSL) has purchased $20,000 of coastal native plants and committed volunteers to plant them to help prevent further erosion at Sunset Beach. The erosion has gotten to the point where all of the event structures have been moved off the beach with the exception of two camera towers that get removed from the beach every day after the Van World Cup’s daily heats finish.