Kona Kohala Blog

I'm working with clients who are in the $1 to $3M range for a home in west Hawaii.  They want dry but the ability to have some green around and warm.  Temperature isn't a big concern but a good ocean view is a must.

We're starting in Kohala by the Sea then working up to Kohala Ranch.  After that we'll be looking further south into North Kona and all it has to offer.  Believe it or not, there are some very good deals in this price range.  Many of the owners of these fine higher end homes are market knowledgeable in the sense that they know what current value is and don't fool themselves into thinking they can get more than market value.

We're looking at beautiful properties in prime locations.  These are fantastic homes and certainly not for everyone.  If you are one of the fortunate few in a position to buy such a home, now is a good time to begin looking.  We have large inventories of luxury homes on the market today.  Contact me at robert@ferraripacificrealty.com if it's something you want to pursue.

In other news here in Kona, road work goes on ever so slowly.  There is an end in sight, may be by the end of March we'll have completed the intersection at Henry and Queen Ka'ahumanu, at least that's what they're telling us, they being Hawaiian Dredging.

In Waimea, the long touted by-pass (40+ years of touting) is being delayed again.  The whole county is waiting for federal handouts; what's new here?

Too bad we can't get along without politicians . . . or can we???  It seems that most people get along fairly well with each other, it's the governments that have problems with each other.  Hmmm.  aloha

In South Kohala today there are 105 condos and 77 Single Family Residences (SFR's) for under $450,000.  In North Kona there are 85 SFR's and a whopping 304 condos under that price.

Taking it down another step, under $400,000, there are 52 SFR's and 271 condos in North Kona and 53 SFR's and 81 condos in South Kohala.  This is a great time for first time home buyers.  Remember, a first time home buyer may also be someone who hasn't owned a home in 3 years, not just never owned one.  And for those first timers the feds are offering an $8,000 tax credit that doesn't have to be past back like the $7,500 one last year did.  A tax credit is paid against your tax bill, not like a deduction that's added into your taxes.  The main caveat is that you do have to close on the house before December 1, 2009.

For those of you at the other end of the buying spectrum, there are 243 homes listed for sale over $1M, talk about having a choice.  There are 37 in North Kohala, 60 in South Kohala and 146 in North Kona.  If you're in the market for a beautiful retirement home or a great second home in Hawaii there has been no better time than now to consider it.

For more information on homes, condos or land in any price range, contact me at Robert@FerrariPacificRealty.com or call 808-896-0661.

If you'd like to be on the mail list for the weekly newsletter of west Hawaii, Aloha Friday, email me and I'll add your name.  Our company Privacy Policy applies to the newsletter as well as all other communications with the company.  aloha

Median price is still on the way down in North Kohala, <28.23%>, South Kohala, <20.39%> and North Kona, <25.98%> for Single Family Residences (SFR's).

Condo prices are on the way down in North Kona down <13.41%> while South Kohala is up 36.83% for the year so far.  There have been a few $1M+ condo sales this year that have pushed the median price above last years price.  No condos in North Kohala.

The number of sales in all areas, with the exception of North Kohala, are down.  Up there they have 7 SFR sales this year compared to 6 last year at this time.  In South Kohala, however, we have a <77.27%> in condo sales from 44 last year to just 10 in 2009.  SFR sales in South Kohala aren't quite that bad but are down <32.65%> this year while in North Kona, SFR sales are down <49.28%>.  North Kona's condo sales are down <42.55%>.

This is bad news for sellers unless they have owned their property more than 5 years, in most cases, and haven't refinanced and taken money out.  It's great news for buyers because, not only are prices down but acitivity is down.  This means seller's on the whole are more motivated to negotiate on price and terms.  It's the best time to be a buyer in almost a decade.

Now, about Obama's plan to charge the military for medical coverage.  I know, it's not a plan at this point but the most ludicrous thing is that he would consider it, no, the most ludicrous thing is that any nut job in Washington D.C. would suggest it.  What the hell is the matter with these people.  This is the biggest arguement for mandatory military service at least for anyone going into public service and I use that term loosely.

Sergeant Erik Roberts, U.S. Army, was wounded in Iraq in April of 2006.  His injuries have required that he go through 13 surgeries to save his leg.  He received a bill for $3,000 for his treatment.  The V.A. was pursuing the payment until CNN picked up the story and a senator got wind of it.  Since then, the V.A., never a friend of any veteran, has withdrawn the charge.

As a veteran of Viet Nam I can tell you that had I had to pay my own medical I would not have willingly gone.  Medical coverage has never been questioned for people who put their lives on the line for this country.  How damn dumb do you have to be to even come up with an idea like that?  How can these government schmucks sit in their lavish offices with all their perks including the best medical coverage in the world, that's right, the world and consider cutting it from our men and women in uniform.  They should all be taken out and shot, not killed just shot.  Then tell them there is no medical coverage, they have to get their own.

There's been so much said about our current financial situation, all negative, that maybe it's time for a comment on the positives coming out of this.  Then we can get back to the complaining.

There are some great buys in the stock market right now.  Most people believe that at some time down the road we will pull out of this mess we're in.  If you're one of them then perhaps you should be looking at good, solid companies that are taking the necessary measures to adapt to the times.  These are the companies that will weather this financial storm and come out strong once it passes.  Since most everyone is taking a beating you may find some good prices on strong companies, prices like we haven't seen since the 80's.

Peope are shopping wisely.  For many of us boomers, we remember when Mom used to cut out coupons or look for sale items before whipping out the credit card . . . wait, there was no credit card.  If we didn't have the money for it, we didn't buy it.  We're seeing that again along with less "stuff" being bought then forgotten about a week later.  Instead of being a society of instant gratification we're going back to appreciating what we have and making it last longer.  When we do get something new, it too is appreciated because it isn't something that happens everyday.  Kids are learning the value of money again and seeing their parents budget.

I think as more businesses compete for the consumer dollar we are getting better service.  Almost all wildly successful businesses in the past, those that have been around for a hundred years or even fifty, for that matter, were built on a service model that we haven't seen in the last 3 or 4 decades.   Businesses are realizing that providing good service is the way to have customers return for more.  Service is what drives capitalism and capitalism is what made the United States the model country that even those who hate us admire.  I don't see people waiting to get into Iran or Mexico or China or even the new Russia.

Last, real estate has returned to reasonable prices, prices that first time home buyers can again afford.  The banks are still over reacting to the laxity of the recent past but as they loosen their lending requirements, we'll see more qualified people be able to own their first home.  Interest rates are under 5% for a 30 year fixed rate mortgage.  We see lending rates that haven't been around since World War II days, that's the late 1940's for you history challenged Gen X, Gen Y and others.

Speaking of real estate; if you're looking for a second home or one you can use to generate rental income, let's talk.  As mentioned earlier, I've been working with clients looking for homes in the one to two million dollar range.  Two very nice homes we looked at are being used as vacation rental properties.  Most people looking for an investment property know it's difficult to find a condo in Kona that will break even let along show a profit.  In the higher price range, I showed two properties that were generating over $100,000 per year and both were ahead of last years income for 2009.

This may be the time to think about a $1,000,000 home if you haven't before.  Now is the time to get one for a lot less than you could have a few years ago and a lot less than what they may be a few years from now.  These are beautiful well kept homes with incredible views and amenities.  On top of that, interest rates for Jumbo loans are in the 6% range right now, also unheard of for a long, long time.

You tell me what you're looking for and I'll find.  The selection has never been better so don't keep putting it off.  If you're qualified and it's in your budget there's no time like now.  aloha

I've spent the last 4 days working with clients in North Kohala, South Kohala and North Kona.  Same clients each day looking for a home they can use part of the year and have family get togethers for holidays.  They have some special needs like plenty of room for kids and grand kids, prefer a pool, great views and not a lot of maintenance.  Fortunately their price range is between $1M and $2M.

We started out with 21 possibles and have now narrowed it to 4.  It's surprising how many really nice homes are out there in that price range.  We also looked in Kohala by the Sea but ruled them out because of, ready for this, too much sun glare off the ocean.

We have been able to find beautifu luxuary homes with lush landscaping and a lot of character within that range.  If you can afford that price there are many, many great homes to choose from.  Now is the time, prices are down, way down from where they were a year or two ago.  Jumbo loans are below 6% for the first time in a long time and there are lots of home to choose from.  Call me, 808-896-0661 or email Robert@FerrariPacificRealty.com and let me know what you're looking for.

Now on to my favorite subject, our economy.  Do you realize that in spite of the promises of jobs we are getting a jobless recovery, if we get the recovery.  No one is going to get a new job at a bank or a brokerage house but that's where the money is going.  How does that make sense?

We are spending more money faster than any time in history and saddling our kids and grandkids with more debt that they can imagine or ever get out of.  In the short term some of this may work but don't expect to see any jobs created.  That means no new sources of tax money which means higher taxes for those still working which may mean fewer people working.

What is so hard about simple economics?  How does the government printing new money make sense in handling a recession?  How does raising taxes on anyone create new jobs?  I'm no economist but I do keep my bank book balanced and carry no debt.  Isn't that how our country supposed to run?

Unlike our society, the real estate market in west Hawaii does have a vibrant middle class.  We also have a lower class, a lowest class, various degrees of middle class and various degrees of upper class.  No matter what price range you're considering we have it.

Today I'll be showing homes to a client in the $1M to $2M range.  Our initial search netted 21 properties that either fit or nearly fit their criteria.  Upon further examination of the homes, we narrowed the field to 11 which we will be seeing over the next two days.

There is an amazing and gratifying variety of homes in all price ranges for sale right now.  This is such a good time to buy.  If you're looking at your future, your investments in the various markets and wondering where to put your money now, seriously consider real estate.

Interest rates are low, under 5% for many loans.  There is a large inventory of homes to choose from meaning there is very likely just what you're looking for out there.  Last, what better place to put your money when every other venue is so unstable.  This is not the time to have a lot of cash.  I'm not an investment advisor but I do know that many of the people buying property today are concerned about the decreasing value of the dollar as the feds print more and more of it.  The dollar slid big time against foreign currencies yesterday when it was announced that the Obama gang would be introducing over a Trillion dollars in new money.

For me, it makes more sense to be holding onto real assets rather than paper money when the inflation hits the fan.  Talk to your financial advisor or estate planner and ask what they suggest in light of all that's going on.  It's a great time to buy real estate.  aloha

Golf Villas at Mauna Lani Resort, a nicely laid out condo complex positioned between fairways of the Francis H. I'l Brown championship golf course, now has an affordable 3 bedroom, 3 bath unit listed at just $585,000.  On Sunday, this unit was the best priced one at $619,000.  The seller wanted to know why it wasn't selling?  The answer was the maintenance fees which are currently $1,200 per month.

How do we deal with that?  The seller can't give a buyer more than a small percentage of the sales price at closing by federal law so a big credit for the fee wouldn't work.  How about lowering the price, lowering it so much that it is the equivalent of nearly 2 1/2 years of maintenance fees?  That'll take the sting out; so we did.  We dropped the price $34,000 to $585,000.  If you're interested, contact me now, don't wait!  The MLS # is 219504; pictures and videos on this site, look at our listings.

Here's some more kernals of knowledge to ponder.  Did you know that the percentage of "distressed" homes, those that are short sales or potential foreclosures, is about 6% of all the mortgages out there.  That means that 94% of the home owners with mortgages are okay, they're making their payments even in these difficult financial times.  So, for 6% of the mortgage holders we are going to change the contracts, the written agreements between the lender and borrower so that the borrower can supposedly make their payments and not defautl on their loans.  We are going to change the contracts, the legal instruments signed by both parties that should hold up in any court in the land.  The house and senate have agreed that changing the contracts is a good idea.

Now, let's move to AIG.  There is a major fuss being made about executive "retention bonuses" being paid to 73 employees, 11 of whom no longer work for the company.  O'Bama (it is St. Paticks day) and his cohorts in the legislature are calling for heads to roll, these bonuses are wrong they should be stopped or taxed at 90%, yaddah, yaddah, yaddah but they are contractual obligations.  We as legislators, we who now own 80% of the company through our bailouts, can't possibly go back on a contract.

And, says the administration, please don't blame our Secretary of the Treasury for this.  Yes, he was involved as the head of the New York Federal Reserve Bank who personally structured the AIG bailout with full knowledge of the bonuses one year ago but how could he have known?  How could he not have known is a better question.

This administration has more balls in the air than a juggler at the San Francisco Renaisannce Faire.  How are we, let alone the regulators, supposed to follow all this.  These guys are putting David Copperfield to shame with all the smoke and mirrors in play today. 

Will someone please, please tell these idiots this economy is not rocket science.  History has seen this over and over again.  Ask yourselves what would Reagan do?  It's that simple.  The recession of the 80's was ever so much worse than this and he fixed it in a few years.  Why is this administration making this so tough?  Is there something else going on that they don't want us to see?  All I want is a business friendly environment and the rest will take care of itself.  Encourage people to be creative, don't penalize them for it.  Create tax breaks for those who put other people to work.  Give them credits and deductions for starting businesses, it's not cheap to do that.  Take away the incredible costly overhead of compliance issues for business, reduce liability to some reasonable level so we can reduce insurance in all industries.  Use common sense, that's why we have it and it's all going to waste right now.

Another sign of the times. the once exclusive Hualalai and Kukio developments are now in MLS.  The Multiple Listing Service is a vehicle that allows brokers to cooperate with each other and agree to share a commission.  These two resorts have always kept to themselves and would actively fight to keep outside brokers and agents from working in "their territory".  Now that things have gotten tight, they need our help and the exclusivity is gone.  Once the market picks up things will go back to how they were but in the meantime, we can help you with properties in these two beautiful properties and you can deal with the broker of your choice, let's say Ferrari Pacific Realty as an example.  Having spent a good deal of time with friends who lived at Hualalai, I am familiar with the property and the benefits of ownership there.

It's Friday so just for laughs, let's look at public works projects in Hawaii county, specifically west Hawaii.  Did you know that the Alii Parkway (also has many other names none of which is final) has been on the drawing table for 40 years?  Did you know there have been 20 surveys done in that time and it still isn't finalized?  It is such a boondoogle that the Public Works Director, a public employee, won't even return phone calls anymore.

$6.3 million  has been spent to date along with an expected $70 million price tag to build (yeah, like that will come in at budget) makes it the single most expensive 4.5 mile stretch of highway in the country and we haven't even broken ground yet.  And now that they've found 14 previously undocumented archeologically significant sites, you'd think they'd have found them all after 20 surveys, there is no end in sight, no pun intended.

Here's another amazing tidbit of stupidity available only from politicians.  There is another road way on the books no where near as complete as the Alii Parkway, that is being given priority.  This road known as the Kahului to Keauhou Parkway does not have a final plan and the county hasn't acquired at least one parcel of land needed to complete the road but is going ahead with trying to get funding even though they've been told projects have to be "shovel ready".  So much to do and so little thinking.  Stay tuned for further bottle necks to any constructive development in West Hawaii.

The Kailua Kona Target store is on schedule to open its doors in a few months bringing a long awaited shopping opportunity to West Hawaii.  There is some mystique to Target not shared by KMart or Walmart or anyother mart out there.  Whether it's the clever chiq ads or the layout of the stores, there's something that's allowing Target to continue to expand even during these hard times; here's a business that's doing something right.

Perhaps Mr. Obama would do well to heed Targets example of how to run a company.  He could pretty much leave the business plan alone and use it to run the country.

Right now we are kicking off the lates farsical adventure of this administration named the Home Affordability and Stability Plan or HASP.  When the idea of saving homes from foreclosure first came up most people thought it was a good idea.  When the details were released last week, many of those same people thought it was a bad idea, a very bad idea.

While it's a generous thought to help out people who somehow got themselves in trouble buying their home, the people next door who have been working their little fannies off to make their mortgage payment are now realizing it's them who will be bailing these people out.  People are questioning the propriety of paying off or reducing someone else's mortgage when they get no relief for having done the right thing.

I actually had some moron say to me that he was so glad the government could help these people out without having to use tax money.  Huh!!!  There really are people out there who think no one is paying for this, that money is just somehow materializing out of thin air.  I'm beginning to get the idea that Obama is one of them.  It's nice that he and his honey take home $4,000,000 plus a year with no loss of employment in his future but that's not the case for many Americans.

Now, add to that 9,000 + pork (I know it's been changed to the ever so much nicer sounding "earmark" terminology) projects and things are looking dim.  I've heard it said many times recently but no one seems to be listening, "We can't buy our way out of a recession".

Two books I recommend our president and his staff read are first Ayn Rand's "Atlas Shrugged" and then Edward Gibbon's "The History of the Decline and Fall of the Roman Empire".  If every American would read and understand just those two books we would be out of trouble in a hurry.  One is fiction but carries powerful lessons about how business works.  The other is non-fiction and tells a story so parallel to our own that we must change our ways now or fall victim to the very same end of the only other Super Power that has ever existed on earth.  aloha

I got a call this morning asking about condos for sale under $125,000.  Lo and behold, there are 4 fee simple condos in that range.  These condos typically rent for $900 to $1,000 per month meaning you could make a profit or at lease break even.  That's a first in west Hawaii in a long long time.

How about the "Homeowner Affordability and Stability Plan"?  It turns out to be a 17 page document explaining who's eligible and how each program works.  Essentially, to qualify you must be an owner occupant, the balance of the first lien can not exceed $729,750 and it's okay if you're already in foreclosure or are suing the lender.

If you qualify, the lender is required to reduce something to get your monthly payments down to no more than 31% of your before tax income.  This can be done by lowering your interest rate to as low as 2% or extending the loan to 40 years or a combination of the two.  If neither of those work, you may be able to "forebear" principal.  This means the lender would lower the amount of the mortgage (you'd still owe on the original amount) to a level that would get your monthly payments down to the 31% magic number.  Now, none of these fixes are permanent, everything goes back to where it was after 5 years.

Most people interviewed in a recent poll by Trulia Research agreed that the administration isn't doing enough to help home buyers and that what is being done for home owners will not be enough to be of significance. 

The number of foreclosures in west Hawaii continues to rise but not at the rate they did last year.  Short sales have become common place with just about everyone who gets into trouble going to their lender and asking for a short sale.

The problem for some of these people is that the lender may agree as long as they are still going to get the difference between the sale price and what is owed paid back to them.  This is done through a "deficiency notice".  This is a separate note, another loan in the amount of that still owed by the seller.  In some cases of extreme need, the lenders are forgiving the debt completely and taking a loss on the loan.

It's hard to say what is right.  No one wants to see people thrown out of their homes even if they did something stupid like get sucked into something that sounded too good to be true and turned out to be.  At the same time, what about the people who are busting their butts to make their payments; doesn't that seem a little unfair to them to be saving their neighbor 'cause they did a dumb thing and can't keep up?  I guess the question may be, is there a right thing?  aloha

There is a very nice subdivision located midway between Kailua village and Keauhou just below Queen Ka'ahumanu Highway named Komohana.  The subdivision was built in 2 phases in the late 80's, Komohana I and Komohana II.  Prices range from $500K to $1M.  Most of the homes have nice ocean views and 15,000 sq. ft. lots.

The streets are wide with sidewalks and underground utilities.  Overall, the owners take good care of their property making it an attractive place to live.  In addition, the association fee is just $35 per year and it has a strong home owners association that keeps an eye on maintaining property values.  There is an active Neighborhood Watch that has worked well to keep the crime numbers low and neighbors in touch with each other.

There are about a dozen homes for sale in the area, if you're interested, contact me and I'll send you some additional information, photos and a video if you'd like.  aloha

Sorry about the interruption in postings, a little problem with an otherwise trouble free server.

I've got a new listing for you to consider if you're in the market for a beautiful, incredibly well built home in Waikoloa.  MLS number is 221691; go to Search Hawaii MLS on this site and you can look at 25 photos and I'll be putting up some video as well.

This is a 3 bedroom, 2 bath upstairs and a 1 bedroom, 1 bath down.  The downstairs is pretty much self contained and is currently used as a rental.  At the ground level in back is a "Tea House", a thatched roof structure that's ideal as a play house or place to hang out and be peaceful, do art or just relax.

The views are spectacular, you can see Mauna Kea, Mauna Loa, Hualalai and the oceran.  Everything in the home is first class from the Bosch appliances to the hand finished tongue & groove ceilings.

In the rest of the market, we're beginning to see the arrival of the investors.  These are curious little creatures that typically show up just as a market is reaching the bottom in pricing.  We know they're investors because they want to keep any renters that are in the house and are offering fair prices.  The bottom feeders we've had recently are a different breed than the serious investor.

There have been a lot of these investor types in California recently which has improved their sales by 43% over last year.  This weeks Aloha Friday newsletter will have our latest stats compared to last years also.  If you're not receiving the newsletter, email at Robert@FerrariPacificRealty.com and I'll put you on the list.  No obligation, no cost just good information on west Hawaii, our real estate and any other things of interest in North Kona and South Kohala.  aloha