According to report commissioned by First Hawaiian Bank, Hawaii's tourism is in crisis mode. As a small example, last night I met some friends from California at a wonderful chinese restaurant, the Hong Kong Cafe, and we were the only people in the restaurant for about two hours. The downturn effects the entire state and the vendors whose business is geared mostly to tourists are affected the most. On the other hand, for those who are planning trips to Kauai, the travel values have not been this good in years. From activities, to accomodations, you can save a bundle these days as vendors compete for the business. Here is the article that appeared yesterday in the Pacific Business Journal:
Hawaii’s tourism industry is in “crisis mode” and is underappreciated, according to a new economic report.
The report, “Assessing Tourism’s Contribution to the Hawaii Economy,” said that tourism touches jobs, tax revenues and other areas of Hawaii’s economy, and the downturn in the visitor industry is impacting the rest of the local economy.
First Hawaiian Bank commissioned economist Leroy Laney to produce the report.
“Foremost, the tourism industry has an overwhelming economic importance for Hawaii,” Laney said in a statement. “It is imperative that all possible actions be taken to remedy the situation. If that does not happen, or until it does, the Hawaii economy will remain anemic. Employment in all sectors will be down, as will tax revenues, business profits and overall economic well being.”
Tourism touched an estimated 74 percent of jobs in Hawaii in 2007, according to the report.
State taxes attributed directly to the visitor industry in 2007 accounted for 25 percent, or $1.2 billion, of general fund revenues, the report said. And based on Council on Revenue estimates, the downturn in tourism caused a 2.5 percent decline in the general fund in 2008.
Laney said in the report that local attitudes toward tourism vary, but it is underappreciated by many. Residents view visitors as competing with them for resources. “There is often a strong, unfounded perception of competition (versus partnership) between visitors and residents over limited resources,” Laney said. “Residents often identify the tourism industry with the higher cost of living in Hawaii, and also with traffic congestion. There is little appreciation that tourism enhances the quality of life of our citizens and the economic development of other industries. Marketing efforts that are internally as well as externally focused can help alleviate this problem.”
Laney also said Hawaii’s infrastructure — parks, roads and other public facilities — need to be upgraded and maintained so that visitors can feel safe in comparison to other destinations.
The report forecasts that over the next three years the visitor industry may return to positive growth, but the growth will be slow. Laney estimated a 1 percent and 3 percent growth in visitor arrivals for 2010 and 2011, respectively.
Spring is here and our market is definitely picking up. Hooray. There were 49 transactions that either went into escrow or went into escrow and sold in the month of March. That's a pickup in activity for kauai real estate. That is far more volume than we've seen in January or February. Buyers are sensing the good values to be had and are making their moves. Interest rates are still at historically very low levels. This week I heard rates of 4.75% on a 2nd homes (better rate than a pure investor rate), and 5.25 on a jumbo loan with 30% down on the jumbo loan. Jumbo loans(non-conforming) for Kauai are under $722,000.
Of the 53 sales, over 80% of the sales were under $500,000. As our affordability index improves, owning a property in the islands becomes more doable all the time. And with the first time home buyer's tax credits and great FHA programs, first time buyer's have a better chance than in a long time to purchase their first homes on the Garden Island.
Take a look at the chart below which tracks the number of sales of Kauai real estate the first quarter of 2009 as compared with sales in 2008
While the sales volumes are down from 2008, and the prices may still be retracting, it's clear that there are more and more buyers out there when properties are correctly priced. Some listings sit on the market for a year and never sell, but others are sold in less than a week when the deal is attractive. Notice in the graph below that while numbers of transactions are down from last year (when credit was easier to get and lenders were more flexible) there is a spike upwards in March and i suspect April and May will demonstrate more of the same. You may also notice that the residential segment, single family hoes, makes up the largest percentage of sales, while land sales make up the smallest number of sales.
If you've been thinking that the pricing is getting attractive on Kauai, well it is. Let me know what type of properties you wish to monitor and you can receive an update whenever there is a change in the portion of the market that most interests you.
The U.S. Supreme Court ruled Tuesday that the 1993 Apology Resolution did not strip the state of its authority to sell or transfer 1.2 million acres of ceded lands. The court’s unanimous decision overturns a previous ruling by the Hawaii Supreme Court that blocked the sale of land conveyed to Hawaii when it became a state. In essence the Supreme Court decision sends the onus of resolving this issue back to the Supreme Court of Hawaii. While the Office of Hawaiian Affairs would have preferred a dismissal of this issue, they reportedly find the decision workable and this by no means is the end of the situation.
Pacific Biz Journal and the Star Bulletin both have very good articles on this issue. On Kauai radio yesterday morning, passionate Hawaiians expressed their frustration and disappointment with the ruling. Having read the articles throughout the state, the issue has really yet to be decided. The US Supreme Court put it back in the hands of the state where it belongs. As a realtor on an island where affordability is still a big challenge, i do not understand why the government does not provide more opportunities to local residents with the massive amounts of land that they already own.
Read the Honolulu Star Bulletin report on the SUpreme Court's Ruling
Read the Pacific Biz Journals view on the Supeme Court ruling
Read the Maui News version of this important story to the Hawaiian people
Well, March is looking to be the best month yet this year as there are more buyers and more deals on the island of Kauai. Kauai REO foreclosures continue to grow and these seem to be becoming the best values in our market.
With one week left in the month of March, 42 properties are in either contingent escrow or "under contract", meaning that the contingencies have been removed, or, in the cash of something like an all cash sale, there are no contingencies.
It's also intersting to note WHERE in the marketplace the sales are occurring. Of the 42 properties currently in escrow, only FIVE of them are for properties listed for over $1 million dollars. In fact, the most prestigious condo address in the Princeville real estate market, PUU POA, has couple of units in escrow, and unit was listed at $1,099,000.
You can see from the graph below the trend of our median prices over the last seventeen years. Already our median price through March of 2009 is down to $414,000, quite a bit lower than at the end of December 2008. When you look at a graph over this long period of time, it's easy to identify the market correction that is occurring.
Here are a couple of examples of properties with good value that are in escrow:
This private home in Kalaheo was listed for $290k. It is bank-owned and now in escrow.
This Anini Beach home, just across the street from the beach, listed for $1.25 million and
went into escrow in two weeks.
Five of the homes or roughly 12% of March's current sales are REOs, foreclosures on Kauai that are now owned by the bank. Banks want to sell. Banks list at good prices usually, and drop their prices regularly until the property sells.
Would you like to see what is in escrow? Click here to download the Kauai properties currently under contract
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I utilize the latest technology to offer sellers the most comprehensive and complete marketing solution on the . island. Buyers and Sellers leverage my years of experience in negotiating.
As a fulltime resident of Kauai, I enjoy the aloha lifestyle. Real Estate is a wonderful way for me to share my broad range of business expertise and technical abilities with buyers and sellers from around the world who have discovered Kauai, one of the most beautiful places on earth. Using the same promotional, negotiating and people skills I developed as a business owner, I apply those tools to create value in building long term relationships with buyers and sellers.
As a veteran entrepreneur, I understand the key components of negotiating and creating workability between parties. Whether representing a buyer or seller, my goal is to create a win-win for all parties involved.
As a sales and marketing director in the technology sector for many years, I have a breadth of expertise in promotion, video, and marketing and I leverage the industries' latest tools and trends to keep my strategies on the cutting edge. I syndicate my listings to over 25 real estate portals, and actively promote my listings on craigslist and other community sites where a wide range of people see them.
As a buyer's agent, i serve as an Accredited Buyer's Representative, a title I am proud to hold. I leave no stone unturned when working for a buyer. From searching tirelessly for the perfect property, negotiating the sale, and insuring that every concern is addressed.
I love living on Kauai and am very involved in our local community. As the President Elect of the Rotary Club of Kapa`a, our club supports many community organizations on the East side of Kauai like the Boys and Girls Club of Kapaa, Hale Ho Malu, Friends of Kamalani Playground, to name but a few and is currently involved in water projects in India, Africa and the Phillipines.
I work with our local creative arts organization, the Kauai Concert Association, bringing 9 world class concerts to Kaua`i this season. From classical to contemporary to dance, KCA brings a diverse group of talent to our small island with a mission to educate and inspire children. Each artist does an educational service event and sometimes a master class.
My sports passions are primarily golf and tennis and with two titanium knees, I am very grateful to be engaged in both. Yes, I walk my dog Samson and take him to the dog park, and swim in the ocean down at Lydgate Park, but, you'll often find me playing the links at the Wailua Golf Course or playing doubles on Saturday afternoons at the Wailua Houselots with a great group of local players who enjoy the social scene as well as the competition.
For fun, I work as a drummer in local jazz and funk venues, like Trees Lounge in Kapaa and Stevenson's LIbrary at the Grand Hyatt in Poipu. I play in the Kauai Community College Jazz Big Band, and often volunteer my time with our community theatre groups like, Hawaii Children's Theatre and Kauai Community Players.
While searching for a second home on the Island of Kauai we were referred to Ron Margolis by our local realtor. We contacted Ron by phone from Boulder Colorado and he was quick to E-mail MLS listings of properties that he felt would meet our needs. Ron also happily answered any questions and addressed any of our concerns. Upon our arrival in Kauai, Ron tirelessly showed us endless properties even though at that time Ron was recovering from major surgery. Realizing that we only had three days on island to power shop for a home, Ron would squeeze us in any time of the day or evening even between physical therapy sessions. There was never any pressure, just an enjoyable experience.
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