Volume 10, Issue 5

TRAVEL

Alaska Airlines Announces New Nonstop Flights to Lihue, Kauai

Beginning in March of next year Alaska Airlines will begin new nonstop flights from San Jose and Oakland California. Flights from San Jose will consist of two arrivals and two departures three days per week commencing March 27th. Flights between Lihue and Oakland will include two arrivals and two departures four days per week beginning March 28th.

The Boeing 737-800 aircraft will have the ability to accommodate 16 first class passengers and 141 individuals in the main cabin. "The Hawaiian islands are among the most popular leisure destinations that Alaska Airlines serves", reported the company's vice president of marketing Joe Sprague. "This winter we will have more than 100 flights a week to the four major islands from the U.S. West Coast."

Alaksa Airlines ranked Higest in Cukstomer Satisfaction Among Tradional Network Carriers in the J.D. Powers and Associates 2008, 2009 and 2010 North America Airline Satisfaction Studies.

Hawaiian Airlines To Offer Flights to South Korea and Japan

Hawaiian Airlines has announced that it is launching service to South Korea as part of it's ambitious expansion into Asia and to cash in on the fast growing number of Korena visitors to the islands. Service between Honolulu and Korea's main airport of Incheon will start in January 2011 with flights four times a week. Incheon will be a key hub for Hawaiian because of its accessibility and proximity to other nations including China.

Korean Airlines, which has a code-share agreement with Hawaiian, is the only carrier that currently provides direct service between Honolulu and Incheon. Due to strong demand, Korean Air in June added three weekly flights, or 780 seats, giving it a total of 10 flights a week.

Hawaii has benefited from a program that began in November 2008 that allows Koreans to enter the United States without visas. Hawaii welcomed 20,211 Koreans in the first three months of this year, a 91 percent increase over the same period last year. The state predicts 74,000 Koreans will visit this year, nearly double the 38,100 visitors in 2009.

In June of this year Hawaiian received tentative approval from the Department of Transportation to receive one of four new routes to Tokyo Haneda airport, which has been off-limits to U.S. carriers since 1979. Hawaiian beat out much larger competitors for the prized routes, including Continental and United.

REAL ESTATE

Market Trends in Real Estate

A common question asked by visitors and locals is "How's the market doing?". Well that depends on whether you are a buyer or a seller.

Buyers

For a potential buyer, in additional to greater seller motivation, this market has four aspects that distinctly work to your advantage;
inventory, interest rates, incentives and most importantly, price. Buyers have many choices in the vavious property categories, interest rates are at historic lows, sellers are often offering incentives to perspective buyers to make their property more attractive and in most cases list prices for properties are as low as they have been in six or seven years.

Sellers

From a seller's perspective, although activity and the corresponding rate of sales ins increasing year-to-year, the median sales price is flat or decreasing year-t0-year. For the first half of 2010 versus the same period in 2009, there was an increase in the number of residential unit sales by 71 percent, a 62 percent increase in the number of condominium sales and a 36% increase in vacant land sales island wide.

Median Sales Prices

In the first six months of this year the median sales price for residences has declined by one percent, condominium median sales prices decreased by fifteen percent year-to-year and vacant land sales prices increased by six percent. For additional median sales price comparisons, we can look back two years ago, to June of 2008. The median price then for Kauai residences was $657,500 and today it stands at $473,500, a decline of 28%. Condo prices today are $264,300 compared to $599,500 two years ago, a decrease of 56%. Vacant land also has taken a nose dive, down 58% to a median price of $295,000 from $700,000 in 2008.

Although there is no question real estate values have declined over the past two years, one important factor must be considered when comparing these numbers. The Federal Government put in place a very large incentive, in the form of a $7,500 tax credit, for first time home buyers. The credit had the intended effect of dramatically increasing the total number of sales, however, as might be expected, first time home buyers were purchasing inventory at or near the bottom of price wise of available inventory. So a much larger percentage of sales during the time the tax credit was available were lower priced sales, which of course pulled the median sales price down dramatically.

Foreclosures

Many mainland real estate markets have been hard hit by foreclosures. This is especially true in areas where prices spiked up rapidly, such as Las Vegas, Nevada and Phoenix, Arizona. The consequence of recurring foreclosures in a local real estate market is to continue to drive prices down further. Sellers who must sell their home and are not in foreclosure, are nonetheless forced to meet the lastest foreclosure price recorded in their neighborhood.

While Hawaii has not been immune to foreclosures, there has not been as severe an impact as that seen in other areas of the country. The most important reason why not is that the local banks here in Hawaii were not making the kinds of loans many mainland lenders were. They actually required down payments and weren't doing 100% or 125% financing. Homeowners who have equity left in their homes tend not to want them to go into foreclosure. Conversely, those that are "under water" with mortgages exceeding their market value, constitue a large portion of the foreclosure market.

Hawaii certainly has home owners that have lost jobs and are unable to pay their mortgages and are foreclosed upon as a result. However Hawaii's foreclosure rate also has a unique component-- mainland buyers and investors defaulting on resort properties purchased over the past several years. Fully 46% of Hawaii foreclosures are non-owner occupied compared to 30% across the rest of the country.

Good Time To Buy?

No one has a crystal ball when it comes to forecasting the real estate market. Anyone comtemplating a purchase on Kauai at this time must certainly wonder if prices have further to fall. My personal opinion based on the data I see, is that prices have stabilized and there are some great buys on the market right now. Mortgage rates, which were an excellent value between five and six percent, are now under five percent. This is probably the lowest price/mortgage rate combination that we'll see in this current real estate cycle. It really is a good time historically to be buying.

Paul Brubecker, who formally worked for the Bank of Hawaii, and now does independant economic consulting, has generally been spot on in forecasting the Kauai real estate market. His opinion is that prices will remain flat until 2012 and then, hold on to your seats, will increase 100%, from $500,000 now to $1,000,000 by 2020. I've seen his presentation, complete with charts and graphs, and it's hard to question his rationale or the numbers.

LOCAL UPDATE

Latest Plans for New Safeway in Lihue

A year ago, the Kauai Planning Commission approved a new shopping complex in Lihue that was being built by Safeway and included them as the anchor tenent. The project had been reportedly delayed until Safeway could determine the final details of the new four lane road being built next to the shopping center. This is the same four lane road refereed to in the article below concerning enforcement of the 25mph speed limit. For someone familiar with Kauai, the location of the new complex is on the corner right across the street from the new YWCA building and pool. The side street goes to Home Depot and Costco in one direction and crossing the highway in the other direction, goes to Kilohana and the new mini railroad station.

Now it appears that due to the economy, only one half of the proposed center may be constructed at this time. The Planning Commission recently approved a request from Safeway to break the development into two phases. Laurel Loo, the spokesperson for Safeway said "We've had difficulty filling Phase II, although we're hoping that with the construction of Phase I we'll get interest and more tenents in Phase II.

Phase I will include a 57,514 sq. ft. Safeway Lifestyles Supermarket, another major store measuring 14,820 sq. ft., four restaurants, two shopping complexes, a bank and a gas station. Most of this phase is scheduled to be completed by 2012. By 2013 the bank and one of the shopping complexes should be finished. In 2014 the largest restaurant, measuring 8,129 sq. ft. is scheduled to be completed. Wow, a HUGE restaurant at 8,000 plus square feet! That would make it larger than almost any other restaurant on the island. Can't wait to find out who it might be. Seems like a large chain restaurant would be logical, although the large chains, with the exception of fast food, have mostly avoided Kauai. Could it be Outback Steakhouse? Cheesecake Factory? Tony Romas? Benihanas? Those are four that are on other islands and not yet here on Kauai. I'll let you know as soon as I find out.

Phase II is scheduled to begin construction in 2013 and will have two major retail shops, measuring 41, 104 sq. ft. and 29,948 sq. ft., plus a smaller store and three restaurants. Well no wonder Safeway is struggling with Phase II tenants. Who wants to be opening a new retail store is this economic enviorment? Although if they're not starting construction until 2013, by the time it's completed, the economy will be much better on the island. The entire project will have 1,025 parking stalls with sixty percent of those spaces being built in Phase I.

 

Police Continue Enforcing 25mph Speed Limits
in Construction Zones

If you missed this article last issue and will be traveling to Kauai in the next year, please continue reading. When you drive either north or south out of Lihue airport there will be construction zones with 25mph speed signage. An article in the local paper recently mentioned that our police department is enforcing the 25mph speed limit in the two major construction zones on the island. My observation is that most traffic during the day slows down to close to this speed anyway. Driving around concrete road barriors with orange flashing lights on top of them will do that for you. The difficulty arises at night, when there aren't nearly as many cars on the road and drivers are more aggresive as a result. And this is exactly the time when citations are being issued.

So, drivers be aware and watch your speeds in these two construction zones! The fine for exceeding the 25mph speed limit is a whoopping $250 and could really spoil an otherwise perfect vacation. Don't let it happen to you!

 

Poipu Beach-It's About More Than Swimming and Surfing

That's Ed Ford on the left with Miles Emura showing off the seventy one pound black ulua that Ford recently landed off the point at Poipu Beach Park. Miles Emura, a Kauai Department Ocean Safety Bureau water safety officer at the Poipu tower, said he saw the ulua swimming earlier in the day. After getting off work, Emura said he swam the bait, a live nenue, out to where he suspeted the fish to be roaming. "Usually I swim the bait beyond the breakwater, but this time it was a lot closer in, Emura said. "We had to swim the bait out because it's live and it needs to float because if it hits bottom, the eels will get it."

Using the pole he got from a friend fifteen years ago, Ford said he used 60 pound test with 200-pound scratch. "He struck at six, straight up, and gave me a fight for over an hour. This is the first one I've landed in 15 years I've been going for ulua. My mom moved me here when I was young and I've been fishing ever since, but only got involved with ulua when I bought a friend's ulua pole.

Emura said he's seen a lot of ulua swim though the popular Poipu Beach Park. The largest one hooked tipped the scales at 98 pounds.

Kona Mermaid Swims Onto Kauai Beaches

According to www.mermaid.com, the word Mermaid comes from "mere" the old English word for "sea" and maid, a woman. Mermaids are mythological creatures with a female human head and torso and the tail of a fish. Mermaids have a broad representation in folklore, literature and popular culture.

Dana Marie, pictured above, calls herself a professional mermaid, a natural offshoot of her career as an underwater photographer and marine mammal naturalist for the last seven years. "My heart has always been with the ocean" Marie said. "From when I was little, I dreamed of being a mermaid." She came here to Kauai recently from her home in the seas surrounding Kona on the leeward side of the Big Island.

"My purpose for being a mermaid is to bring the message of inspiring children and adults to follow their heart, to find a passion and experience the beauty of the ocean. Even people who live in cities need to be aware of the centuries old connectioin to the ocean and how the ocean impacts us. We must replenish the balance of our relationship from land to sea," Marie said.

Marie says the tail she uses has no ziper, requiring her to squirm into it. Using materials found it wet suits and fiberglass cut to fit, everyting, including the countless number of shells, had to be sown over a period of a year. "This is not my first tail," she said. I made my first tail when I was eight years old, but since then, my body outgrew the tail and scales. This is one of three tails I use."

For more information, check out Marie's website at: www.konamermaid.com.

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