Hawaii Real Estate Daily

Prices of single-family homes fell in the second quarter, but at a slower rate than in the previous three-months, an economic analysis company said Thursday.

The median price of a U.S. home slipped at an annual rate of 5.3 percent in the second quarter, up from a 6.6 percent decline in the first quarter, according to the House Prices in America study by Global Insight Inc.

The most severe declines were in California, Florida and Michigan, representing 43 of the 50 worst-performing metropolitan areas.

Other cities in the bottom 50 include Las Vegas, Phoenix and Washington, D.C.

Just six markets were overpriced by 35 percent or more, down from 51 in 2005, Global Insight said.

This “extreme overvaluation” was limited to Hawaii, Washington, Oregon and Utah, the study said.

Weak demand, rising foreclosures and fewer sales of expensive homes have hurt prices in the sagging housing market.

But the slowdown in price declines and the amount of extremely overvalued markets are signs that the housing “bubble” has burst, the company said.

Still, real estate markets are not ready to recover, and there remains a glut of unsold homes on the market—a situation made worse by foreclosures, the company said.

The study examines 330 markets and bases its regional valuations on factors such as current and historic home prices, interest rates, household incomes and population density.

“Although the markets that were extremely overvalued two years ago are seeing expected price declines, other areas are seeing price declines due to weak economic conditions,” said Jeannine Cataldi, senior economist and manager of Global Insight’s Regional Real Estate Service.

“The market has a lot of inventory to work through before prices will change course.”

Credits: Chicago Tribune

Two groups have volunteered to renovate four vacant units in Lanakila Homes public housing in Hilo rather than let them be demolished, said Chad Taniguchi, executive director of the Hawaii Public Housing Authority.

The private Office for Social Ministry and state Rep. Clifton Tsuji each agreed to provide volunteer labor to save one duplex rental building, constructed in 1951 and still structurally sound.

The renovation plan, which the agency hopes will extend to all 62 units remaining in 31 duplex buildings, is a reversal of a decision in 1998 to demolish all 230 units in Lanakila.

“They were perfectly good to live in,” Taniguchi said. “The planning wasn’t far-seeing enough. There were bad decisions,” he said.

All of the low-income tenants were evicted, leaving units idle while some were replaced with new buildings.

Out of 230 units, 136 were eventually replaced.

But the process was slow, and the agency, then known as the Housing and Community Development Corp. of Hawaii, was plagued with problems.

After years of inaction, the agency resumed the demolition of 32 units recently, but in the process, Taniguchi realized the buildings were sound. Some are built with 1-inch-thick redwood siding, others with three-quarter-inch thick redwood, he said.

There is dry rot in some places, but it is minor, he said.

The 32 units were carefully dismantled, and the wood was reused. “The wood is all good,” he said.

In the 10 years since the demolition began, the economics of housing have changed. New units would now cost $300,000 each, but Taniguchi thinks the old ones can be renovated for $150,000 each.

Tsuji said there is a “dire” need for public housing on the Big Island.

Mayor Harry Kim said that out of a population of 165,000 on the island, one third are either homeless, one payment away from losing their home or doubled and tripled up in the homes of relatives.

Credits: Star Bulletin

The nationwide credit crunch has taken a toll on Hawaii’s commercial real estate sector, which saw sales volume plunge 58.5 percent in the first half of the year, according to a new report.

Local real estate deals, affected by more stringent lending requirements and a disconnect in pricing between buyers and sellers, fell only 7.3 percent from 113 transactions in the first six months of 2007. But year-to-date sales volume plummeted to $536 million from $1.2 billion, according to the latest investment market report released today by Colliers Monroe Friedlander Inc.

Large deals over $25 million were affected the most by the credit crunch with major hotels, shopping centers and office building sales falling to levels not seen since the late 1990s, before the state’s latest economic boom.

Hawaii’s commercial real estate sales volume plunged 58.5 percent in the first half of the year, following the severe downturn in the U.S. market, according to a new report.

The number of local real estate deals, affected by more stringent lending requirements and a disconnect in pricing between buyers and sellers, fell only 7.3 percent from 113 transactions in the first six months of 2007, according to the latest investment market report released today by Colliers Monroe Friedlander Inc.

But year-to-date sales volume plummeted to $536 million from $1.2 billion in the first half of 2007, with the greatest declines in high-priced hotel and retail deals, which saw sales volume drop by 87.5 percent and 76.6 percent, respectively.

Large deals over $25 million were affected the most by the credit crunch with major hotels, shopping centers and office building sales falling to levels not seen since the late 1990s before the state’s latest economic boom, according to the report.

While Hawaii’s residential real estate market has not been as substantially affected as the mainland by the credit crunch and subprime mortgage troubles, investment funds have lost significantly in mortgage-backed securities and have curtailed acquisitions in Hawaii and on the mainland, said Mike Hamasu, Colliers’ director of consulting and research.

“The large transactions are not occurring; you have a whole bunch of sales prices that are small in comparison to last year,” he said.

Last year’s transactions included the $575 million purchase of the Makena Resort on Maui by the Dowling Co. and Morgan Stanley Real Estate, the $85 million sale of the Pacific Park Plaza in Honolulu and the more than $50 million acquisition of the former Gold Bond building in Kakaako.

The average hotel sales price has fallen a staggering 75 percent to $21.6 million from $86.3 million last year, while the sales price for retail properties dropped to $2.5 million from $9.9 million.

The market has reversed itself from last year’s period of abundant capital with no money down to 25 percent to 50 percent equity requirements. This has resulted in other major deals being re-traded or pulled off the market altogether.

The mainland owners of ResortQuest’s flagship Waikiki hotel pulled the property off the market earlier this year, as did the California owners of the Hotel Hana-Maui and Honua Spa and Fairmont Orchid Hawaii hotel on the Big Island.

“Even for solid investment opportunities based on strong supportable income factors, financing is difficult to secure,” the report said.

However, sales remain strong for properties priced below $5 million, the buyers of which have an easier time securing financing through local banks. These properties - industrial condominiums, land sales and smaller apartment buildings - comprise more than 70 percent of the total number of transactions.

The commercial real estate market is not expected to rebound in the near future until major investment firms identify the magnitude of losses and other financing sources become aggressive on lending, Hamasu said.

“Hawaii is unique in many other factors, but in this particular situation you have significant similarities with other markets in the country,” he said. “One of the contributing factors for the downturn in the economy is this situation on Wall Street. Until that, plus other factors, get corrected, we’re not going to see a turnaround.”

For the year, transaction volume is anticipated to drop by 50 percent to 60 percent as more owners wait for alternative financing in the capital markets. Sales volume in Hawaii is anticipated to total $1.3 billion to $1.6 billion, a 50 percent decline from last year’s total of $3.04 billion.

Credits: Star Bulletin

Homes for low-income families, versus protecting preservation land - it’s a dilemma brewing at a Windward Oahu golf course, the site of the proposed project.

It would be at the Bayview Golf Park in Kaneohe off Kaneohe Bay Drive. Project leaders unveiled the plan to residents for the first time on Thursday.

Some fear that constructing new affordable homes on the golf park will mean losing what they call priceless, protected land.

From 18 holes to nine, there’s a proposal to scale back the front nine of the Bayview Golf Course to make way for more than 100 affordable homes, and or senior housing.

It’s all very preliminary, but it’s already raising a red flag in the community.

“There’s only one land for us and we all need to be able to share it and we need to take into consideration what we do to the land because once it’s gone, it’s gone, and I just don’t want to see another parking lot in paradise,” said Kaneohe resident Amy Osborne.

The proposal started after the state asked the owner of the course and the developer to help out with Oahu’s affordable housing crunch. Part of the concern is the area is currently zoned for preservation land.

“It involves our environment, it involves watershed, it involves historic preservation, this is right on the hawaiian fishpond area. It’s going to impact traffic, our sewer,” said Osborne.

“My suspicion is it might as well be a series of homes, and more congestion and more difficulty so I would not like to see that happen,” said Kaneohe resident James Brough.

Another concern is communication. Residents say they received a flyer only a day before the public hearing Thursday night. Critics say they’re not no-growth, they’re for smart growth, and question if transforming the course is the green thing and the right thing to do.

Project leaders say the plan is in extremely early stages and could change depending on community input. They met with residents at Thursday night’s Kaneohe Neighborhood Board meeting, at Windward Community College.

Credits: KHNL

Kai Ani Village, a condominium home community, recently held a grand opening for its sales center at the corner of South Kihei Road and Lipoa Street. The project will feature 79 “home-style” condos and 20 live/work residences, with seven different open floor plans. According to the company Website, the project is designed as a “true village setting that blends multiple free-standing buildings, quiet lanes, winding walkways and pleasant greenbelts.” Two- and three-bedroom plans are available, with sizes ranging from 886 to 1,901 square feet. Individual condo prices start in the high $400,000 range.

Credits: Maui Weekly

Two years after being adopted, Hawaii’s unified public school calendar is expected to be changed tonight.

The state Board of Education will meet on Kauai at 7 p.m. to consider extending the summer recess by two weeks while pulling away one week each from the winter and spring breaks.

A school board committee unanimously approved the proposed calendar in June, and several key members said yesterday they expect the board will approve the change tonight.

The goal is to give schools that have been unable to cram summer programs into seven weeks more time to offer credit-recovery and enrichment courses.

A statewide school calendar — featuring seven weeks off in the summer, a week in the fall, three weeks for Christmas and two weeks in spring — was launched in the 2006-07 academic year. It was intended to accommodate the schedule of parents whose children attended different campuses, streamline payroll and prevent kids from forgetting what they learned during summer breaks that lasted 10 weeks or more.

If approved, the new calendar would take effect in the 2009-10 school year.

Summer break at Hawaii public schools would increase to nine weeks from seven while the winter and spring breaks would each lose a week under a new calendar likely headed for passage by the Board of Education tonight.

School Calendar
The state Board of Education meets tonight on Kauai to consider a new, statewide public school calendar that would increase the summer break to nine weeks from seven.

Proposed
School starts around July 30.

» One-week fall break

» Two-week winter break

» One-week spring break

School ends around May 26.

Source: State Department of Education

Current
School starts July 28.

» One-week fall break

» Three-week winter break

» Two-week spring break

School ends June 8.

The Department of Education is proposing giving schools more time off in the summer to offer students credit-recovery and enrichment courses and to allow teachers to take professional development classes.

Meanwhile, students returning from the winter break would have two extra weeks to prepare for exams generally taken in the spring, including the Hawaii State Assessment and advanced placement tests, said Robert Campbell, director of the Education Department’s Office of Program Support and Development.

A school board committee voted unanimously in June to recommend the proposed calendar to the full board, which meets today at 7 p.m. at Hanalei Elementary School on Kauai. Several key members said yesterday they expect the board will approve the change tonight.

If approved, it would take effect in the 2009-10 academic year.

Despite the committee’s preliminary endorsement of the calendar, school board member Breene Harimoto said he plans to vote against it or ask that a decision be postponed so that teachers and parents have an opportunity to react to the plan.

“It feels like there is almost no input, so that tells me people are not aware of the change,” he said yesterday. “I’m just fearful that after we make the change, then people will come out of the woodwork.”

A statewide unified school calendar — featuring seven weeks off in the summer, a week in the fall, three weeks for Christmas and two weeks in spring — was launched two years ago under a legislative mandate.

The goal was to accommodate the schedule of parents whose children attended campuses using different calendars and streamline payroll and other administrative tasks. The traditional summer break, some lasting 10 weeks or more, was chopped to seven weeks to prevent students from forgetting what they learned while away from the books.

But schools have been struggling to find teachers to volunteer for a summer program that now needs to be crunched into 30 instructional days, education officials have said, noting some teachers prefer to use the time off to relax and prepare for the coming school year.

In 2007, for example, only 41 schools plus the online e-School said they would have summer classes — down from 53 in 2006 and 76 the year before — because of the brief summer. About 5,600 isle students are in summer credit recovery programs, according to the Education Department.

“There certainly seems to be a growing consensus that a little bit longer summer would make it easier to provide meaningful learning opportunities,” Campbell said.

Demand for remedial classes could also rise as graduates of the class of 2010 will need 24 credits to earn a diploma, up from 22 credits, said school board member Eileen Clarke.

“We would like to provide every opportunity for kids to succeed. That’s our goal, despite the fact that it might not fit into people’s vacation schedules,” said Clarke, who missed the school board’s committee meeting in which 10 of 13 voting members backed the calendar changes. “With the options we have now, that’s educationally the most sound.”

Not everyone agrees.

For teacher Corey Yasuda of Kaleiopuu Elementary in Waipahu, the current calendar’s longer breaks spread throughout the year prevent teachers from burning out. He said teachers can take professional development courses during semesters and that schools should focus on ensuring every child is passing instead of worrying whether they will have enough time in the summer to help those falling behind.

“We need to better utilize our breaks throughout the year while we are working, as opposed to when we are on our summer break and we don’t have students,” Yasuda said.

Dole Middle School Principal Myron Monte said long summer breaks require teachers to spend more time revising lessons from the previous school year. But he said his school, which has not had summer instruction because few students have signed up, would not be able to offer the courses in seven weeks.

“It’s a conflict in the pursuit of academic achievement,” he said. “It’s like a no-win situation.”

Credits: Star Bulletin

Kaua’i residents looking to purchase their first homes are invited to sign up for free homebuyer orientation classes.

The classes are held monthly, 6 to 7 p.m. at the Lihu’e Civic Center, Pi’ikoi conference room. The only exception is the Aug. 4 session, which will run from 5 to 7 p.m.

The classes will be offered Aug. 4, 8 and 29; Sept. 5 and 19; and Oct. 3 and 17.

Participants will be given an introduction to financial literacy, home ownership, assessment of homebuyer readiness and a description of the home-buying process, according to a Kaua’i County news release on the program.

“There are a number of affordable housing projects that are expected to be completed over the next few years, so I strongly encourage anyone who’s interested in buying a home to register for an orientation class,” said Kaua’i Housing Director Ken Rainforth.

“I enrolled in a homebuyer education program years ago and found it to be very beneficial,” Rainforth said..

The classes are run by two well-established nonprofit agencies, Hawai’i Home Ownership Center and Hawaiian Community Assets, whose mission is to help residents become successful homeowners.

For more information, call Hawai’i Home Ownership Center at their Lihu’e office, 808-245-5860, or toll-free 1-877-523-9503, or Hawaiian Community Assets, 808-632-2070.

Credits: Honolulu Advertiser