The ban on smoking in your own condo unit may be coming.  The latest newsletter I received from Hawaii Community Associations had an article that states that this is on the very near horizon. Read Prohibiting Smoking In Condo Units.  There are several article posts from a local Condo Association Attorney Richard Ekimoto on this very issue that is interesting to read.  What do you think?  Are you for or against it?

“I’m going to sell my house this summer. I know how important it is to price your home right. So I plan to get 3 agents’ price opinions and then hire the agent in the middle? Is this a good idea?”

So, in case I wasn’t clear regarding you idea of choosing the agent with the middle price: don’t do it. Choose the best agent and choose the price that the market data supports.

“On foreclosures, I’d like to get an idea of how much the bank has into the property. Is there any way to find out the loan balances on the foreclosures?”

***ANSWER:
I know what you’re thinking…that if the bank has say 500K into a property, if they sell it for $535,000 and break even, they’ll be happy.

Unfortunately, you’re wrong on two counts.

First of all, banks have tremendous expenses when they foreclose. All told, it can be 25-30% of the value by the time escrow closes.

Secondly, banks are not pricing their foreclosures based on the “UPB” (the insider’s term for “Unpaid Principal Balance.”) Once they own the property, they want close to market value so they can maximize revenue from the sale

So, yes, you can get the loan balance at the time of foreclosure. But it won’t do you any good…

Do you have a particular home buying or selling questsion? email me and I will be glad to answer it for you.

The Fed News Is Good News.

However, speaking of inflation, the Fed’s most favored measure of it - the Core Personal Consumption Expenditure Index - arrived on Thursday, showing core inflation at 2.1%, just a whisker above the Fed’s desired range for inflation of 1 to 2%. This read wasn’t great news for inflation-sensitive Bonds…but the resulting market action was nothing, compared to what happened when the Jobs Report arrived on Friday morning.

Talk about a real mover and shaker…the Jobs Report brought word of 20,000 jobs lost in April, which was better than market expectations of 75,000 jobs lost. Initially, Stocks rallied higher and Bonds worsened dramatically, as the headlines were so much better than had been anticipated. But when the details of the report were unpacked, showing prior months worsening revisions - as well as a sobering realization that 20,000 jobs lost is still lousy news - the markets quickly reversed direction, helping Bonds and home loan rates improve once again. Another ultra volatile week - and when the dust settled, home loan rates improved by about .125% overall.

Always an interesting read and you can sign up for the free newsletter by clicking on this link and subscribing in the upper right hand corner.

Looking for assistance with buying a home? 

For a second year in a row, the state is making more federal mortgage tax credits available to people with low or moderate incomes in an effort to reduce the cost of buying a home amid a more restrictive financing market.

The Hawai’i Housing Finance and Development Corp. yesterday said it’s accepting applications for $20 million in credits, a record amount that’s up from $15 million in credits given last year.

The tax credit, called the Mortgage Credit Certificate, was created by Congress in 1984 and has been available and administered here by the state since 1989.

Another option is the Hula Mae Program.

Want to know if you qualify? Just contact me and I can help.

I will throw a few articles that came up this past week out at you.

For Hawaii, the loss of Aloha Airlines and ATA, means fewer airline seats available for visitors to arrive on. 15% to be exact.  Brewbakermentioned that the other airlines in the industry may make up for their loss, but in the short-term there will be a small effect.  that coupled with the higher than expected inflation recently, leading to minimal economic growth this year, or no growth.

There was an interesting article about the value of the dollar recently than is worthy of reading, especially since Hawaii is a hot-spot for foreign investors.

Treasury Secretary Henry Paulson speaks in the article titled Worst of U.S. Credit Crisis May Be Over.

A good sign of the economy can be tracked back to retail vacancy rates, which is highlighted here.

Do you want an emotional roll-coaster ride of ups and downs and a headache due to confusion? All you have to do is listen to or read the various reports on this months housing statistics.  They are all over the place with their reporting.

Why do I say this?  Well, the Honolulu Advertiser reported in their headline: Oahu Median Home Prices Down 3.9% in April.  I heard another report on the radio that said, “Home Prices Are Up $11,000 from last month.”  Now that doesn’t make since, does it?

The Honolulu Advertiser compared the Median Price this month to the Median Price in April of 2007 which was $665,00. 

The Radio was comparing Median Home Prices of this month to last month.

So which is more accurate? Neither.  Comparing one month to another month in separate years, is obviously not as accurate as comparing several consecutive months of data in two separate years.  What I like to look at is the “Year-To-Date” numbers.  What has gone on from the beginning of the 2008 to present compared to the same time in 2007.  Here are the Statistics for April 2008.

On page 3 of 20 we have the Year-To-Date numbers: The median sales price for a single family home on Oahu Year-To-Date is $625,000 compared to the same time last year which was $630,000.  That is a .8% decline. 

The number of sales is a different story as single family home sales are off by 23%.

For condos The Year-To-Date median sales price is up 2.2% to $329,000, however the number of sales are off by 24.7%.

On page 7 of 20 the median number of days-on-market was 43 days for SFH’s and 33 for condos.  Those are very good numbers. Better than I had expected.

On page 14 of 20 we have the inventory of active listings.  We see SFH inventory increased slightly and condos did so as well.

The big number is the Months-of-Inventory-Remaining. This. of course, is if we didn’t bring anymore properties on the market, how long would it take to sell all of the inventory.  Keep in mind 6-7 months of inventory is a balanced market.  Since our numbers of sales increased last month and this month, the months of inventory remaining dropped back down to the balanced market level.  For SFH there are 6.9 months of inventory remaining and for condos there are 6.7 months of inventory remaining.

You can also read Harvey Shapiro’s Article on this months stats.

Median prices paid for Oahu properties in April were $639,000 for single family homes and $327,000 for condominiums.  Note that these prices have been quite stable, unlike many Mainland markets, particularly in California. The medians for the entire first four months of 2008 are $625,000 and $329,000, almost the same as the same time period in 2007.

To view all past market stats go to The Resource Center.

Almost yawning news as it was expected….again.  Read economists Harvey Shapiro’s post on it.  There were a couple of very interesting comments from his post.

1. Because of the weakening dollar, it’s important to realize that Honolulu properties are inexpensive when compared to real estate in parts of the Mainland and in foreign countries, especially in Europe and Japan. This contrasts with the sticker shock that visitors had when comparing O`ahu housing prices to those back home as recently as the mid-90’s. Honolulu prices were the highest in the US and were $100k higher than the second place city, San Francisco. Now, we’re fourth or fifth from the top.

2. There needs to be a discussion of the US dollar in light of the beating its been taking.  Except for some minor fluctuations last week, the dollar has been consistently losing ground to all major currencies over the past few years. This translates into more expensive imports, including oil, and higher cost international travel.  On the other hand, the weakness in the dollar could add demand for exports from the US and, hopefully, will promote more investment from overseas.

By the way…The Fed Cut Rates As Expected

As mentioned before we are anticipating the easing of tourist visa restrictions in various countries in Asia.  Well…in the Honolulu Advertiser we see:

Hawai’i’s visitor industry is getting ready for an expected surge in tourists from South Korea once visa restrictions are eased, which could come as early as year’s end.

Hotels and other players in the visitor industry are now joining the effort launched by state tourism officials several years ago to market Hawai’i to South Korean visitors.

The power of the global economy has put Hawai’i in a great position to generate meeting and incentive business from Korea, and HVCB is seizing the opportunity,

There really isn’t a lot to cover in this article other than the POTENTIAL.

I was contacted by someone I hadn’t seen or heard from in nearly 12 years via email the other day and of course they asked how I ended up in Hawaii and how is it living out here.   I would rather not write a novel to someone trying to explain how great and different life is here, so I jumped on the Internet and started digging up pictures and video of the various things I do and enjoy. (I usually lose friends at that point since it comes of as if I am rubbing in the lifestyle that we live here) It made me realize that I have not posted a Why We Live Hawaii category post in a while.

Well, I came across this website that had some video of the Eddie Aikau Big Wave Classic held in 2004.   There is a great explanation of what “The Eddie” is and it goes into the Background of “The Eddie”.   Check out the video here.

This day was especially memorable because it was my first Eddie contest (the have the holding period for it every year but if waves don’t remain consistantly above 25 feet they don’t hold it so it only happens once every few years) and I was getting ready to fly out to North Carolina in the dead of winter and wanted some surf and sun before I went back to freezing cold weather.  I remember hearing on the news the night before that as long as the wind cooperated then the Eddie was a go for the next day and that waves were expected to be upward of 50+ feet, possibly 60. (I start losing my lunch when the surf gets above 10 ft.)

Myself and a buddy of mine left before the sun was up to make the trek to the North Shore for the Eddie.  As we made the hour long drive the radio stations were all reconfirming what we already knew, that the Eddie was on and that the surf was massive. The waves were coming across the roads during the night in some spots.

We pulled up “near” Waimea Bay about 7:15 and could not believe how far away we had to park.  We had to park more than a mile away and walk, since there were cars already parked on both sides of the road all the way down to Waimea.  Traffic is grid-locked and the waves begin to come across the road in certain spots when the waves get to be this size.  The Eddie definitely brings out a lot of people and the beach was packed along with any upper viewing vatange point from the cliffs above.

Being able to watch all the pros that are invited for the contest is an amazing sight and a special event.  The video above is a great watch, it also captures what surfer magazine deemed the worst wipe-out of the decade, which you can watch here in the first scene (Flea’s Wipe-out Video), along with some other nasty spills.

Also Bruce Iron’s winning wave had the crowd on the beach giving a standing ovation as Bruce put his hands in the air during his close-out barrel in the Waimea Shore break.  This is one thing you definitely don’t see elsewhere in the world.

Have any stories with pics you want to share?  Email them to me at scott@kahalaassociates.com