Oahu is a safer place to live!

The Honolulu Advertiser gave us some great news today. Great news for Oahu residents and home buyers: "crime on O'ahu fell 3 percent last year — the fourth straight yearly decline — to the lowest total since the state started tracking the data 33 years ago, the FBI reported yesterday."

"The Honolulu Police Department and our partners are committed to keeping Honolulu the safest major city in the U.S.," said police Maj. Frank T. Fujii. "Like anything else, it's been a collaborative effort with the community, different law enforcement agencies as well as private businesses.

So when people ask me if Oahu is a safe place to live, I can say whole heartedly, "YES!"

Aloha Airlines shuts cargo - you should be living on Oahu

Yesterday Aloha airlines closed its air freight business after its lender, GMAC, cut off financing. Aloha was responsible for 85 percent of all goods flown between O'ahu and the Neighbor Islands.

Everybody on the neighbor islands is going to be massively impacted by this. The Big Isle, Maui, Kaui, Moklokai, Lanai, everybody except Oahu. Retailers and wholesalers of baked goods, produce, meat, medical supplies, newspapers, auto parts, construction materials, and just about anything on those islands that comes from Oahu, which is just about everything!

Who will step in? Hawaiian air maybe? The Hawaii Superferry is an option for for some, but so far only serves Maui and O'ahu, so what about Kaua'i and the Big Island?
Grocers were flying in fruit and vegetables from O'ahu everyday. Before the late 1980s, so people will have to go back to the way it was - slow and expensive.

Even if another air carrier comes into the market, they are likely to charge higher prices.
And THIS is why you should live on Oahu and not the neighbor islands. Sorry to our friends on Maui, Kauai and the Big Island, we wish you the best and hope everything works out.

Molokai gets bad news, Oahu real estate is more stable as always

This morning's paper reported that Molokai farms is shutting down, taking 120 jobs away from the sparcely populated island. On an island with only a few thousand people and nowhere else to work, that is huge news.

People ask me everyday which island they should live on and start a business, and I always tell people that Oahu has the most stable economy and infrastructure. If you move to Maui or Kauai and try to start a business, you're going to be in for a rude awakening. In most areas of Maui, Kauai, the Big Isaldn, and Molokai, there aren't enough people to support a new business, and if you don't know anybody you'll have a hard time getting the word out. Traditional advertising doesn't work very well on those islands.

Oahu has nearly 8 times the population of other islands, with new people and new businesses springing up all the time. The closing of one business doesn't effect our island's economy the way it would effect a smaller island.

Oahu has a very deep and diversified economy that allows newcomers to easily get started and thrive. And that is exactly why Oahu real estate has been more stable than the other islands in this current market. While the neighbor islands' markets have dropped dramatically, Oahu real estate has been one of the most stable markets in the entire country.

Honolulu real estate The March 4th Hawaii real estate stats are out!

Honolulu real estate statistics were released yesterday for February 08.

In Metro Oahu, what we call "core Honolulu", home prices actually rose by 9.4%, while the number of sales fell by 35.5%. In East Oahu real estate, the highest priced area on Oahu, and the most desirable to most, the median prices of homes rose 1.5%, while the average price rose an astonishing 25% to $1,520,669.

If it seems strange that prices can rise while the number of sales falls, let me explain for you. When the market was red hot, people were not only buying more than now, people were selling more than now. People who had made massive price gains in a quick period of time were "cashing in," and now that the market has slowed, a lot of people who were previously on the market are now just living in their homes, content to watch the market go on without them.

Here are some numbers that prove this point: Last month only 163 single family homes were sold on Oahu, and while that sounds like bad news for the Honolulu real estate market, our inventory was barely any higher at the end of the month, only 1924 homes available. The previous month there were 1876 Oahu homes for sale.

The number of new listings however, was 565. So if only 163 homes sold, where did the rest go? They are off the market completely. Sellers are sitting tight. Another good sign in our market is that the number of days on market actually DECLINED from 61 days to 59 days. Homes are selling 2 days faster!??!?!

Now of course, the big news is that the median price on all of Oahu real estate fell from $600k to $599k. It's the first time we have been under $600k in several years. But all that means is that cheaper homes are selling while more expensive ones are not. It doesn't mean prices are dropping all over Oahu.

Case in point - in Moanalua and Kalihi, the median price is up 21% since last year. In Hawaii Kai, prices are up 19%. In Kapahulu and Diamond Head, prices are up 9.9% since last year.

But while prices in some areas of Oahu have gone up, other areas have seen buyers getting incredible deals as prices drop. In the Ewa Beach area, prices have dropped 10.4%, and there are certain neighborhoods that have dropped more like 15%.

December 07 Hawaii Housing sales statistics are out

Each month the Honolulu Board of Realtors puts out the housing sales statistics for the entire island of Oahu. Once again, while the entire mainland seems to be going through the worst housing market in many years, the Oahu market remains strong. In fact if you're a buyer in any area except Ewa Beach and the West side of Oahu, it's still hard to find a good house.

A total of 593 properties sold on our tiny island last month, with a median price of $610k for single family homes and $320k for condos. And while homes around America are taking months to sell, the average home in Oahu takes just 51 days to sell, and condos take 47 days.

You might notice I'm saying Oahu specifically, and that's because the markets on Maui and Hawaii are much slower these days. Investors and second home buyers have all but left the market, which really hurts the neighbor isles. Here in Oahu though, where jobs are a plenty and the market is far less dependant on tourists and investors, our market looks great.

One special note - last year I moved from Hawaii Kai to Aina Haina, about 2 miles down the road, and prices here have skyrocketed ever since. The median price in Aina Haina last month was $1,228,600, as compared to $816,000 in November. Island wide, Aina Haina prices are up more than any other area, with a 7.3% increase since last year.

Another sign of strength in the Oahu real estate market is the declining inventory. Yes, it's declining! We had 1874 homes on the market in December, compared to 1952 in November. The number of condos available was down also, to 2346. Here's the best part - the inventory of total available properties is lower today than it was a year ago!

The one area of Oahu that is lagging is the North Shore, with 123 homes for sale and only 3 sales last month. That region is getting hit hard because most of the buyers there are from California.

Hawaii population grows. Running out of real estate in Oahu!

The Star reported this morning that "Hawaii's population rose at its slowest pace in seven years as nearly 10,000 residents left the islands in the year ending July 1, according to the U.S. Census Bureau... Since July 2006 the state added 4,753 U.S. residents for a population of 1,283,388, a 0.4 percent increase. There were 19,265 births and 9,269 deaths, as well as 4,112 new residents from other countries. But 9,673 people moved away."

When I look around at the homes and infrastructure of Oahu, it makes me wonder how we could possibly add 4753 people to our little state. Sure, some of those people moved to Maui and Kauai (probably 20 people or so moved to Molokai and Lanai) but Oahu is certainly where most of those people are now living.

Did we add 4000 new homes? Nope. Did we add new streets, sewers, utilities, and other infrastructure? Nope.

So as the state, for some reason, wants to continue to grow its population, where do all the people live? Honestly it beats me. We don't have any more room for new construction, except in Kapolei and Ewa, which means that the prices of homes in East Oahu and Honolulu are going to continue to rise and push the lower level income people out toward West Oahu, meaning Ewa Beach.

At some point very soon, it seems like the island just won't be able to sustain any more growth. The amount of water, power, and other utilities we use just won't sustain us. At some point we're going to have to adopt a slow growth program so that housing doesn't completely run and out and turn our island into a mess.

As of now we have about 800,000 people living on Oahu, which has already created a housing shortage and very high prices. If you want to live in a nice house on the East or Windward sides of Oahu, it's going to cost about $900,000. Seriously, you can't buy anything decent in Kailua or Hawaii Kai for under that price.

When my clients call and describe what they want, I think they imagine that a million dollars should buy something decent in Oahu, like maybe Mariner's Ridge in Hawaii Kai or Kailua Bluffs, but actually a million dollars is just a plane old average house nowadays.

So while the population growth might be "good" for the economy, it's going to cause more problems in the housing market (read: higher prices, less inventory.)

My advice - if you want to own something in Hawaii someday, buy it now before prices go even higher and the market prices you out forever.

November Hawaii home sales stats are out

The monthly Oahu home sales statistics were released this week, and the numbers were mixed. The total number of sales for the entire island of Oahu are down 11.3%, and the median price was back to $610k, after the high of $685k back in June. However, I should note that last January, the median price was $600k, and all of this year we have been up and down around this price.

The most interesting number to me is the number of days on market. It takes 53 days for the Hawaii average home to sell, and only 42 days to sell a condo. That is very fast! Around the rest of the country it's taking more like 6 months.

With 245 single family homes sold in Oahu in November, there is still a very good number of transactions. The one place that seems to be slowing rapidly is the North Shore.

East Oahu median prices are down about 7.1% since last year, while overall Oahu is up about 6.3%. So as I said, the numbers are mixed. Also, the number of homes on the market has actually dropped since last month, which was surprising. Usually in a slowing market the inventory racks up pretty quickly, but last month the inventory was 1973, while November 30th we only had 1952 homes for sale in Oahu.

For the whole island of Oahu, there were 7.4months of single family home inventory remaining.

The bottom line is that Oahu real estate remains strong, even while the rest of the country is experiencing massive slow downs and price reductions.

For me personally, 2007 has been my biggest year ever, which just shows that it's not the market, it's what you make of the market.

New construction in Oahu Hawaii! Royal Kunia is back!

On the West side of Oahu is one the best places to get an "affordable" newer home for about $600,000. Royal Kunia is a great master planned area just north of Ewa Beach. You pay more than in Ewa because there is way less traffic, and you get a couple great shopping centers and a fantastic golf course.

There are currently about 1900 homes in Royal Kunia, and more new homes that means adding a lot of infrastructure before it begins, but The Advertiser reported today that the developers of Royal Kunia 2 expect to break ground by the end of next year and complete the first of 2,000 new homes as early as 2010.

That's great news for some, and bad news for others. The Ewa, Kapolei, Makakilo region is going to grow by more than 10,000 new homes over the next few decades. More traffic and more problems with the infrastructure. That many news homes will require a lot of new sewers, utilities, streets, schools, stores, etc.

The developer is required to put in more and better roads, a new school and a new recreational center with a community pool, which the residents will enjoy in the hot West Oahu summers.

Also, the developer has to make 30 percent of the units affordable for those making between 80 percent and 120 percent of Oahu's median income.

When you look at the prices and quality of homes in Royal Kunia, it's pretty amazing how much farther your money goes than in East Oahu, Hawaii Kai, Kailua, and Diamond Head. $600k won't even buy you a tear down in East Oahu, but it buys you a near new 1800sqft home in Royal Kunia. Sure the beach is farther and the summers are hotter, but if you have a limited budget and you can deal with more traffic into town, Royal Kunia is a great option.

When the new school and community center are built in a couple years, that will make it all the better.

Want to buy real estate in Kailua and run a B&B?

You might be thinking that you want to run a B&B in Hawaii. Well, so do lots of other people, and it may soon get easier to buy real estate in Kailua that allows for a B&B.

The Advertiser reported today that "the controversy over bed-and-breakfast operations on Oahu has resulted in measures that could increase the number of such accommodations but impose new requirements."

The City Planning Commission wants to 1) lift the ban on new bed-and-breakfast homes and 2) limit them to residential neighborhoods and 3) required more information about them in advertisements.

A Kailua resident against the proposal said "The only beneficiaries are the few people who would destroy our residential character and turn it into a resort."

Some Kailua residents don't like B&B's because of problems with parking, too many guests, loud parties, late-night arrivals. But one amendment calls for the repeal of the present B&B law, allowing them in residential neighborhoods under a conditional use permit, and provides an avenue for neighbors to block the operation.

These issues are exactly why a legal bed and breakfast in Hawaii is so valuable. It adds so much dollar value to the property because they hardly ever get listed for sale. I can't even quantify exactly how much value it adds, but a B&B is basically just an income property with massive income. On a really good B&B, you can get triple the monthly income that you would on a long term rental. Awesome.

This new law would allow for a lot more homes to get the conditional use permit, which means that those homes would increase in value as well. While neighbors may not like the new laws, it will certainly help the property value of those B&B's, while potentially it could hurt the neighbors'. Would you want to buy a home next to a tiny hotel with people coming in and out all day and night?

Both Kailua and the North shore have lots of these little bed and breakfast homes, which means these new laws could be pretty impactful. A lot of the B&B's are right on the ocean, with prime locations for getting high rents. If you're thinking of buying one, you better buy a legal one, because an illegal ( or should I say, non-legal) B&B could get shut down by the City at anytime.

The cost of living in Hawaii is about to get a little worse

A lot of people ask me how much our electricity bills are here in Oahu, probably because they have heard that it's expensive to live in Hawaii. Actually our power bills are about the same as CA. The typical bill is about $139 according to Hawaiian Electric company (HECO).

However, Star Bulletin reported today that the state Public Utilities Commission let HECO increase its rates by 4.96 percent immediately while it considers granting an even larger permanent increase.

The effect on a typical bill will be that it goes up $6.61 a month, to $143 from $139.39. The effect on HECO will be that they get Extra revenue of $70 million per year. Holy cow. Can I raise my rates to get $70 million extra please?

The bottom line is that our power bills are not much higher (or not any higher) than many cities in the country. We don't actually run our AC's most of the year, because it's just not that hot most of the time. If you live on the West side of Oahu, it's going to be a little hotter.

Power bills are higher in Ewa Beach, Waikele, Makakilo, and Kapolei, since it's hotter over there and the wind doesn't blow as much. In Kailua and Kaneohe, the wind and rain keep it nice and cool so you'll have a cheaper power bill. I guess it's only fair since you pay so much more for real estate on the Windward side anyway. It's doesn't even out though, not even close.

Top RE/MAX agent in Hawaii!

Wow, I couldn't believe it - I just received a sales award for July for being the highest selling RE/MAX agent in the entire state of Hawaii, and #39 for all RE/MAX agents in Hawaii and California combined!

There are thousands of RE/MAX agents in California and Hawaii, so I'm extremely surprised by the news. Thanks to God who gives all good things!

Thanks also to my clients for their business!

Honolulu welcomes bicycle riders! Wins award!

This article was published in the Star this morning. "The League of American Bicyclists awarded Honolulu an honorable mention in its Bicycle Friendly Community program."

I've never thought too much about it, but I do see a lot of bicycles on this island. It seems like every few weeks there is some major race. Last weekend was the century ride, in which people ride 100 miles around Oahu. That must be one heck of a ride.

"The city recently released a sustainability plan that calls for the completion of an islandwide Bikeway Master Plan by 2008. City planners are also integrating bike paths into proposed development around rail transit stations. "

Disney in Oahu! Great news for Oahu real estate!

The Advertiser reported today that Disney has just decided to build a luxury resort at Ko Olina beginning next year.

Here are the highlights that are pertinent to Oahu real estate:

• The resort is expected to open in 2011 and provide 1,000 jobs.
• There are absolutely no plans for a theme park.
  Lingle said the project will add jobs and help the community.
• Ko Olina master developer Jeff Stone said he was elated by the news. "It's a dream come true."
• It will actually increase public access to the beaches at Ko Olina becayse this development will add parking.
  This development should help in the larger plan of nurturing Kapolei as a secondary urban center, creating the true "second city."

Whenever new jobs come to Oahu, and national attention is brought to our island by a big name like Disney, it's sure to help the real estate market in Oahu. Particularly, in this case, the market in Ko Olina and Kapolei. With Kapolei so close and hundreds of properties at Ko Olina, thie new resort can only help the cause.

As a side benifit, the new jobs will mean more people driving to Ko Olina, and less people driving to town. That should help with the traffic from the west side into town. Great news!

This is really a great thing for Oahu real estate. And also for my kids.

Nationwide new home sales fall, Hawaii real estate sales slow but steady

This morning a report came out that nationwide new homes sales dropped in August to the lowest level in seven years.

Sales of new homes dropped by 8.3 percent in August from July, the Commerce
Department reported, driving down sales to a seasonally adjusted annual rate of
795,000 units. That was the lowest level since June 2000, when sales clocked in
at a pace of 793,000

However, August numbers were right in the middle of the credit crisis news, which kept many buyers on the sidelines. Since then the Fed dropped rates 50 basis points to make money more avaialable to banks.

On the flip side, The Commerce Department also reported Thursday that the economy grew at a 3.8 percent annual rate in the April-to-June quarter, the strongest showing in just over a year.

The Associated Press said last week that the odds of a recession are now higher than one-in-three but are still under 50 percent. In another report, fewer people signed up for unemployment benefits last week, raising hopes that the recent weakness in the jobs market won't be long lasting.

As usualy, the nationwide data is worse than the news in Hawaii. Most real estate in Oahu is selling just fine, but there is one builder in Ko Olina, Centex, that is having a hard time selling, and sales in Ocean Pointe have slowed enough for the builder to offer about 3% in concessions to the buyer, plus full upgrades.

New City Ferry Means Less traffic in Oahu's future

Traffic has been a growing problem in Oahu for some time now. Actually there is pretty bad traffic in the entire state. Especially bad are the commutes from Ewa Beach and Kapolei to Honolulu. Recently I've noticed that it's getting worse and worse from Kailua and Kaneohe to town too. It can take about 40 minutes to get from Kailua into town, and depending on where you're going in town, it can take a while once you get into town too.

To relieve the traffic a bit, the The city of Honolulu has launched its new ferry which will take people from the west side into town. It's called simply, "TheBoat." The new Oahu commuter ferry service started serving the public last Monday.

From the Star:

TheBoat now makes three weekday trips in each direction between Barbers Point
Harbor in Kalaeloa and Aloha Tower. The ferries is linked at Barbers Point to new bus routes serving. From Aloha Tower, buses will go to the University of Hawai'i-Manoa and to Waikiki via Ala Moana. A single fare pays for the one hour ferry ride and the buses at each end

The one-way fare for adults is $2, and bus passes also will be honored. Fresh-brewed coffee and a "grab-and-go" breakfast will be available for purchase on TheBoat, and restrooms are also available.

How many people will actually take the ferry? I'm not sure, but if you have to drive from Barber's point all the way to town each day, I'm sure it would be nice to sit on a boat instead, assuming you don't get seasick. The traffic driving from Waianae and Ewa Beach is pretty bad, so any relief we can get would really help. In fact, I'll go out on a limb and say this: if the traffic problem in Ewa was completely resolved, home prices there would skyrocket.

I know it's not just the traffic, but that is the biggest issue for Ewa Beach. That's why this ferry and also the train that is supposed to be built in 15-20 years will be huge for that community. If there was a lot less traffic, retailers would be willing to build down there, and way more people would be willing to live there.

What I don't understand is - if the city is willing to spend hundreds of millions of dollars on a train, why not just spend a fraction of that widening the roads in and Ewa and Kapolei? Homes in Ewa and Kapolei are of great quality, and being newer, larger, and cheaper, they are markets that have alot of potential if the infrastructure would support it.

On that topic, now that the new courthouse is coming to Kapolei in a couple years, there should be quite a bit less traffic coming all the way into town from the west side. I don't know how many people come to the courthouse in Honolulu everyday, but it has to be in the thousands. I've been there at 7am and there is a line at every door.

If you think about the number of people coming all the way from the west side to the courthouse, and even the people in Aiea and Pearl City going to court, you realize that the new court and all the surrounding things that will come with it are going to be great for west side real estate prices.

The more Kapolei grows, the more that West Oahu real estate will benefit.

Nationwide, housing declines. Oahu real estate bucks the trend.

NAR reported this morning that nationwide Housing markets continued to decline in August. The number of existing home sales dropped for the 13th straight month.

Sales fell 4.3 percent from July. Sales have fallen 12.8 percent since last August's pace of 6.31 million homes.

Lawrence Yun, senior economist for NAR, blamed the loss on the mortgage market crisis. "The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales, with many buyers having to search for other financing when loan commitments fell through," he said in a statement.

Some good news - prices broke a 12-month decline. The national median existing-home price for all housing types rose 0.2 percent to $224,500 in August from a year ago, when the median was $224,000.

Wow, I am so happy to be in Hawaii real estate and not anywhere else in the US. Although yesterday I was told that the market in NY is pretty great if you're in or near Manhattan. A friend of mine had to stand in line to buy a 1bedroom condo for about $550k. Amazing prices and markets in both Honolulu and NY!

Target is coming to Hawaii and bringing hundreds of jobs. Every job helps Hawaii real estate!

The Honolulu Advertiser reported today that "Target plans to open a 135,000-square-foot store at the former Costco site in the Bougainville Industrial Park and a larger store in Kapolei in March 2009. The Minneapolis-based company will employ between 200 and 300 people per store."

Ok so most of the jobs will be lower level jobs that pay very little, but there are also management jobs, corporate jobs that will bring new people into the state, and other related work with the construction, advertising, and logistics of bringing 2 new Targets to Oahu.

My wife cannot wait. I think she will camp out.

The point is, with 500 new jobs, there are certainly going to be some people moving into the state to do some of the upper level management. Even 10 new buyers in our market is a good thing, on an island where only a few hundred properties need to sell each month.

As Oahu continues to grow, it continues to be the place to own real estate in America. With our limited supply of homes and the ever growing demand, the prices of homes in Oahu can only go up!