SPECIAL REPORT #11
Real Estate Continues to be the Topic
 
November, 2005
 
The Real Estate picture just keeps on keeping on. There is, of course, talk of a bubble that just has to burst one day, but there are certainly no credible signs of this happening.
 
Our beloved little city of Hilo is changing. The growing population is swinging toward affluent mainlanders, as is evidenced by the construction of an elaborate new Volvo dealership. Up until now, about the only Volvos we ever saw here were twenty years old and plenty rusty. That's all about to change.
 
Traffic just keeps getting heavier and more congested, and where most of the cars used to be older, modest models, we're now seeing mostly newer, expensive ones. Lexus, Avalon, Mercedes, BMW, and the like; Cadillac and Lincoln SUVs, and even Hummers. A Dodge Viper in HIlo?! Yup.
 
There is something just not very "Hilo" about an enormous, ostentatious, gas-guzzling, four-ton Hummer, but I suppose its something we'll just have to get used to now. It's like "Honolulu Light."
 
OK, back to Real Estate. The published "median home price" for the Big Island is now $440,000, up some 47% from this time last year. There seems to be no shortage of buyers, as most listings that are priced within the current window of "reasonable" sell immediately. The properties that stay on the market for a while, like weeks instead of hours, are the ones that are inspiring the stories of a softening market. They are also the ones that are hugely overpriced either by the suggestion of "over-enthusiastic" Realtors or by the sellers themselves.
 
We have actually heard from people who have no intention of selling their properties but list them for sale at unreal prices just waiting for some over-eager mainlander to come along. "If it sells at that price, I'm outa here. If it doesn't, that's fine too." Definitely not an aloha wayof thinking.
 
There are still affordable properties available to those who will do their homework . . . and are willing to roll up their sleeves. There are "fixers" of all kinds, and they are usually the best bet for those seeking affordability. One of the big perks in buying a fixer is that you come in at a low price. After you do your extensive remodel and make the old place into your dream house, your taxes, at least for a long while, will be based on what you paid for the house. Had you bought a really nice, expensive home, you would be coming in at the higher assessment (based on the purchase price) and paying the higher taxes from that day forward.
 
Houses we call "fixers" can be either a big house with many years of deferred maintenance, a tiny house in good shape but one that can be added onto, or any combination thereof.
 
We see examples of these all around the Island. A real dump is bought up by yet another mainland family and for the next few months we see all sorts of contractor's trucks there as the place undergoes a transformation. We're seeing whole neighborhoods get revived this way, and in that regard, all the new people here are actually an asset. There has never been lower unemployment in Hawaii, there are all sorts of new small businesses starting up, and the ones already in business are beginning to do well.
 
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As usual, I can't do an update without touching on aloha. Please refer to some of my previous updates for more on this so-very-important topic. We can survive the changes here if we all participate. We can keep the Big Island that special place people have been coming to for years because of its ambiance of peace, love and aloha. More importantly, we can maintain that ambiance for the wonderful people who have been here forever and whose guests we are on this beautiful Island. But it doesn't just happen. We've all got to leave our mainland ways behind and embrace our new culture. It really is easy. It really is all about living consciously and in love.
 
Let's all of us keep living aloha!

Mahalo for "listening."
 
Skip Thomsen & Ohana
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Updated 11/20/05