February 2018 Whaler Update

Whaler Update

February 2018

LOCAL MAUI NEWS

Aloha Fellow Whaler Owners,

Hawaii's had its fair share of blockbuster movies filmed here: from Jurassic Park and Indiana Jones, to the Hunger Games and Pirates of the Caribbean. But the truth is we only have one facility for film and TV production and it's currently leased to CBS for "Hawaii Five-O". Industrial vacancy rates are low and even Marvel had to rent a former Navy warehouse for its production of Marvel's The Inhumans. So, the state is seeking a developer to develop and manage a multi-state film studio complex on 30 acres. * There's been a push to get more sports events here. And with the construction of the Hawaii Convention Center's new sports courts, we just secured three more of them: The Pacific Futsal International Cup, the Jam on It Pacific Rim Basketball Championships, and the AAU Volleyball Tournament . *

And we turn to the topic of money . The state just released it's 2018 Statistical and Economic Report stating the short-term increase in business and household income resulting from the Tax Cuts and Jobs Act are expected to improve Hawaii's economy this year. * Some of the projects that matter most to Maui residents - the north conector of the Lahaina bypass and the realignment of Honoapiilani Highway - are expected to cost hundred of million of dollars, and the money just isn't there. To ease the traffic congestion in these resort areas Maui lawmakers are proposing a supplemental rental car tax of $4.50 per vehicle per day, added to the existing $3 per vehicle per day fee (total $7.50) with the money earmarked for the bypass projects.

The National Park Service is proposing a Tri-Park Pass fee increase from $30 to $50 for Hawaii parks, starting May 1st. You can read about it and share your comments with them until March 2nd here . * Another bond issue is planned to help finance the West Maui hospital construction. The amount sought will be around $70 million. The state Legislature has already granted the project a $50 million special purpose revenue bond. While on-site grading and most of the underground infrastructure has been completed, construction on the building is anticipated to begin in April and completed by December 2019.

CURRENT MARKET ANALYSIS

The tourism industry is what makes the world go 'round here in Hawaii. The Hawaii Tourism Authority released a report showing that the industry set five records in 2017, the sixth record-setting year in a row. Last year 9.4 million visitors spent $16.8 billion, both records. Hawaii visitor arrivals and spending are expected to grow over the next four years. Arrivals are expected to increase 2.7% and spending will grow 4.5% this year. Anticipated increases for 2019 are arrivals 1.6% and spending 3.7%. For 2020 and 2021, arrivals are expected to increase 1.4% and 3.7% in spending.

Maui real estate sales rose last month led by a 25% increase in condominium sales to 120 units sold compared to 96 sold during the same month a year ago. The median price of a Maui condo declined 6% to $505,125 from $537,500 in January 2017. The median price of a single-family home rose 2.7% to $673,000 last month from $655,000 in January 2017. single-family home sales rose by 10.7% to 72 homes sold from 65 sold in January of last year.

Now l et's take a look at The Whaler :

Status	Unit	Bd	Ba	List $	Sold $	Close
Active	364	0	1	650,000
Active	508	1	2	1,150,000
Active	370	1	2	1,198,000
Active	1169	1	2	1,250,000
Active	274	1	2	1,500,000
Active	573	2	2	1,650,000
Active	1223	2	2	2,395,000
Active	102/104	2	2	2,975,000
Active	552	2	2	3,250,000

Escrow	1264	0	1	775,000

Sold	564	0	1	675,000	625,000	12/04/17
Sold	720	1	1	890,000	890,000	12/13/17
Sold	474	1	2	1,050,000	950,000	12/11/17
Sold	757	1	2	1,235,000	1,050,000	01/04/18
Sold	1060	1	2	1,400,000	1,180,000	02/12/18
Sold	352	2	2	3,200,000	2,850,000	11/08/17

Figures from Realtors Association of Maui

TOURISM

As discussed in the section above, Hawaii set 5 records in the visitor industry last year. Maui hotels led the state in two measures of business performance in 2017: Maui's hotels outperformed the rest of the state in average daily room rate of $353.04, a 7.1% improvement over 2016; and in revenue per available room at $272.15, an 8.9% increase from the previous year.

Vacation rentals have nearly tripled in 10 years, and Maui leads the state! Maui has the largest inventory of known vacation rental units with a 30.5% share of the state's total supply. Notice I underlined the word "known". The rapid increase of independently managed vacation rental units includes many that are unlicensed, unidentified and not accounted for. Well, there are no less than three bills making their way through the House and Senate to crack down on those vacation rentals.

I get asked all the time for a recommendation for a great vacation rental company, and my answer is always the same Maui Beachfront Rentals. That's where I keep my vacation rentals, and my guests save money by avoiding all those inflated fees by travel agencies. Their service doesn't stop with the booking - locally based staff is available 24/7. For me, it means no hassles. No more trying to cover all my bases with a local rental agency here plus extra advertising on sites like VRBO, HomeAway, Flip Key and others to try and get a decent return. MBR covers it all and at no additional cost.

TRAVEL

Southwest Airlines is on track with its plans for flights to Hawaii ... but don't start packing just yet. Their goal is to be flying to Hawaii by the end of the year, but since they'll be flying over the ocean, there are several steps left to complete. They're working with the FAA now on approval, and they feel confident they'll be flying to the Islands by the end of this year, or at least be selling tickets for flights that start in early 2019.

Hawaiian Airlines will launch a daily non-stop service between San Diego and Maui beginning May 1st. They've also announced 4 new daily summer flights for 2018, including its first international seasonal service. New summer flights will be between San Francisco and Honolulu; Oakland and Kona, Big island; Los Angeles and Maui; and Narita and Honolulu. Beginning June 1st, Hawaiian Airlines will also offer daily service between Long Beach, CA and Honolulu. And for inter-island travelers, Hawaiian will add 2 more flights out of Kapalua to Oahu starting March 11th.

MORTGAGES

Dean Rathbun of Avis Mortgage noted how after months of eerie calm, stock market volatility returned - but how would it affect mortgages? Right now ... probably not so much. While profits are growing and the economy is healthy, investors are waiting to see what the Federal Reserve's rate decision looks like at their next meeting in March. Will the wild stock market cause the Fed to slow their interest rate hikes? Dean doesn't think so. In fact he anticipates a quarter percentage point hike at the central bank's next policy-making meeting on March 20-21. Dean points out that there are economists who think the Fed may raise rates 4 times this year instead of 3.

According to Dean, mortgage rates have been inching higher for the last 5 weeks, but most home buyers seem unfazed by it. In fact in a recent survey of prospective home buyers only 6% said they would stop their home search if mortgage rates rose above 5%. He doesn't see any immediate detrimental effect on Hawaii home sales this Spring. On the contrary there does seem to be a push from buyers to lock in a low interest rate.

There's a new very limited program that Fannie Mae is trying out with Airbnb and a few lenders, which will allow homeowners to report rental earnings as part of their income when applying to refinance. Depending on how it goes, Fannie Mae could extend this type of program to all lenders.

MAUI HAPPENINGS

Ongoing: Stand Up Comedy Open Mic Every Wednesday Night

On Sale Now: Kapalua Wine & Food Festival tickets

2/24-25: Annual Open Maui Studios info

Thru 2/24: 38th Annual Maui Whale Festival Events

Thru 2/25: Maui Plein Air Painting Invitational details

2/23: Chinese New Year in Lahaina Year of the Dog
festivities

3/04: 7th Annual Maui 5k Run info

3/04: Hinamatsuri-Girl's Day Festival Kaanapali Beach Hotel 9am - 1pm

3/17: 9th Annual Valley to the Sea Half Marathon details

3/21: Tom Arnold LIVE at Lava Rock tickets

3/24: 9th Annual Keiki Tilapia Fishing Tournament Kaanapali Golf Resort 7:30am

Free Movie Night Under the Stars at Whalers Village 5pm

3/06 "Epic"

3/13 "Rio 2"

3/20 "Turbo"

3/27 "Ice Age"

Maui OnStage Iao Theater tickets

3/24-25: Maui Chamber Orchestra - Americana

4/27-5/13: Of Mice and Men

5/25-27: Maui Chamber Orchestra - Musicals

7/13-8/5: Singin' In The Rain

Maui Theater Monday, Tuesday, Thursday Friday tickets

"Ulalena" Hawaiian Show 5pm

"Burn'n Love" Relive Elvis in Hawaii Concert 7:30pm

Maui Arts & Cultural Center
tickets

2/22: Ananya Dance Theatre "Shyamali: Sprouting Words"

2/23: Cash Cash electronic dance music

2/24: The Songs of C&K Hana Hou

2/25: Winter Pops Orchestra

3/01: Edgar Wynter Group & the Rick Derringer Band

3/03: Masters of the Currents Micronesia's newcomers to Hawaii

3/03: Brian Regan comedy

3/09: Marian Freeman People's Choice Award Reception

3/10: Mai Poina: The Annexation Debates play

3/17: Jake Shimabukuro ukulele wizard

3/18: Maui Pops Spring Pops

3/22: Complexions Contemporary Ballet: Stardust a tribute to David Bowie

3/23: An Evening of Mindfulness with Steven Snyder. Mindfulness Movie

3/28: Kenny Broberg classical pianist

3/29: An Evening with Kuana Torres Kahele

Should This Make Me Feel Guilty?

Well, it probably should ... especially for those of you NOT in Maui right now and having to endure frigid temperatures. But let me tell you, there are so many visitors here right now enjoying our tropical paradise. And you know, once they've experienced this, many of them want to own a piece of paradise themselves. If you're even thinking about selling your property, give me a call and I'll give you a confidential no obligation estimate of your property's value. Likewise, if you're considering adding to your real estate portfolio, you might want to lock in those low interest rates now before the Fed raises their rates again. As a fellow Whaler owner with over 30 years experience in the Maui market, you can't put yourself in better hands. Remember, we are the only Berkshire Hathaway Real Estate Brokerages on Maui. Our offices are located in Lahaina-Kapalua and Wailea-Makena. I'm available to you 7 days a week.

John

Broker/Owner