Mihaela Stoops

There were two races in particulat that draw a lot of attention from West Maui Residents.

One was the race between Jo Anne Johnson and Alan Fukuyama for West Maui seat on the Council. Jo Anne Johnson, is a veteran with a Council and also quite famous/notorious for her opposition towards any new developments on West Maui, as well as for the moratorium on developing agricultural zoned land. Alan Fukuyama was newcomer to politics, but with a reputable past running a business on Maui, managed to gather 16,884 votes, that is 40% of the total number of votes that were casted! Surprising, I would say, given the fact that we hardly get to know Alan, while we got to know Jo Anne quite well...

The second most controversial race, that involved significant funds spent to entice the voters, was for the State Senate, between incumbent Roz Baker and Jen Shields. Roz Baker, a democrat with a long history and many accomplishments in politics faced the highly energized Jen Shields, very famous for her efforts to abolish the Certifciate of Need process for hospitals to be built on Maui. The hospital issue, in particular the lack of one on WEst Maui deserves a few books to be written about. In the end, people chose Roz, despite Jen's aligations that Roz could do, but did not do enough for our health. I am a big supporter of Roz Baker, who I have personally met at many voluteer events. Thus, I know my opinions may be considered biased and I will stop at just presenting the results.

To see full election results on West Maui as well throughout Hawaii, please check http://www.kitv.com/politics/feature.html

And in case you wonder, yes, more than 70% of us voted for Obama!

This program was coordinated by Hawaiian Islands Humpback Whale National Marine Sanctuary. Designated people walked along the coast line in pre-assigned zones to look and monitor Hawaiian Monk Seal.

The island was divided into 37 zones, with a team being assigned to each zone.

Equipped with binoculars and cameras, my friend Lori and I monitored the area/beaches between Kapalua Bay and Pohaku Park ( S Turns Park), between 10 am and 1pm.

We were not fortunate to see any monk seals, but we did see several turtles.

We dont know what the results of the whole event are, but this was a fun day.

I will post pictures of monk seals if any will become available, meanwhile, please enjoy these beautiful shots.

For more information about this program, please contact Nicole Davis, Maui Marine Mammal Response Program Coordinator, at nicole.davis@noaa.gov

Aloha!

If you are thiking about buying on Maui, please check www.westmauihome.com for daily updated listings.

Today, I learnt that as a matter of fact, almost one third of the total numbers of homeowners in US own their home( or homes) free and clear.

Also, only 2.5 % of the total mortgages out there are in default, the rest of the owners are paying their mortgages on time.

In "normal" times, and that include the times when people were rushing the buy property left and right, the normal foreclosure rate was 1.5%. Yes, 1.5%! And I wonder why are we pushed to believe that everything is so bad on the real estate market.

There are areas in this country, like Northern California, Arizona, Nevada and Florida where foreclosure signs have become part of the landscape. But, according to a Countrywide official, these are the same areas with the highest number of loans given currently. So, buyers are buying, demand is still there, money is available, what are we afraid of?

And of course, somewhere in the news, lost between all the negative things poluting our thoughts, we almost missed the fact that several areas in the Midwest and East Coast have seen an increase in the number of transactions and also an increase in medium and average prices.

So beauty is in the eyes of the beholder. And so is ugliness. We see what we want to see, we hear what we want to hear and we believe what we want to believe. And at the end of the day, our panic is posted at the New York Stock Exchange.

For good values and properties to be enjoyed for a life time, check my website, www.westmauihome.com

This is the question...In a really Shakesperean way!

For those who have not heard of this concept ( after all, it is used only in Hawaii and Utah, to the best of my knowledge), leasehold is a type of ownership.

Most typically, when one owns a condo, for instance, they own the condo itself ( that is the space between the walls) and also a share of the common elements (pool, roof, hallways and LAND). This is called fee simple ownership. In the case of a leasehold property, one does not own a share of that land that the condo sits on. Thus, one has to " rent" that land from whoever owns it and pay a lease rent. This lease agreement is valid for so many years from today and the rent is renegotiated every so many years. For example, the lease rent for a 1bd unit at Papakea is currently $90.00/month and it will be renegotiated in 2010. The lease rent at Maui Tradewinds, for a 2bd unit used to be $27/month , it was renegotiated in 2008 and it is currently aproximately $270/month. Wow!!! Most condominiums, like Papakea, have a certain formula that imposes a cap on the increase of the lease rent.

Given the limited amount of buildable land in Hawaii, the leasehold concept was created with the purpose of making certain properties more afforable. In reality though, the difference in price between fee simple and leasehold units that are in the same complex, varies from $18,000 t0 $200,000.

Examples: Kaanapali Shores, a complex with almost 400 units, a fee simple studio is listed for $10,000 more than a leasehold studio. While at Papakea, which is also a combination of leasehold and fee simple property, the difference can be as big as $200,000 for same size units.

So how can there be both leasehold units and fee simple units in the same complex?

At one point in time, the land owner offered to sell the fee, to all condominium owners. Some of the owners have agreed to purchase that fee and thus convert to fee simple, while others have decided not to do that.

Why would someone invest in a leasehold property then? Mostly because it is more affordable. It addresses the needs of the buyers that need to get their foot in the door at a reduced price and plan to upgrade later. The closer we get to the time the lease expires, the more that unit will depreciate. Which is exactly what certain investors with a tolerance to risk, wait for. They also wait for the opportunity for that property to convert to fee simple, eventually and instantly build equity in their property. For example, a 2bd Maui Sands unit with an ocean view is currently listed at $489,000. Comparable , fee simple, 2 bd units with the same type of ocean views at Paki Maui is listed at $629,000.

Initially, in the 60's, when this concept was created, most of the condos in West Maui were leasehold properties. Today, there are only a few leasehold properties left, the rest of them have converted to fee simple. And this trend will continue, especially given the tax brakes that are offered to land owners that will sell the fee ( that is the land) between 2008 and 2013. To the best of my knowledge, there are a few complexes where currently negotiations are carried on, to perform this conversion. Like Maui Sands, Hale Ono Loa and Napili Ridge.

A few red flags about investing in a leasehold property:

- the term the lease has to be bigger than the term of a mortgage. Thus, if the lease expires in 22 years from today, one can only get a 20 years loan, and thus be ready to deal with higher mortgage payments;

- the lease rent is not tax deductible;Please consult with your tax advisor on this issue!!!

- the more you approach the expiration of the lease, the more the unit depreciates in value;

- in the event that the lease expires, the owner of the land has the right to get his land back and the improvements on it.

If you have information on leasehold properties in other states than Hawaii, I would love to hear details.

Meanwhile, the question is still there: To Buy or Not To Buy>>>>