Hawaii jobs expected to grow for first time in four years

By Star-Advertiser staff
Article from: Star-Advertiser

Hawaii’s job market is on pace to grow this year for the first time since 2007 and the visitor industry is expected to shrug off a drop in Japanese tourists, according to a state forecast released today.

Job creation, one of the last pieces of the economy to recover from the recent recession, is forecast to increase by 1.8 percent in 2011, the state Department of Business, Economic Development and Tourism reported. That’s up from a 1.3 percent rise predicted by DBEDT in its last forecast three months ago. The number of jobs generated by the economy had fallen in 2008, 2008 and 2010.

DBEDT revised downward slightly the number of visitors it expects to travel to Hawaii this year because of the natural disasters in Japan, but it revised upward the total amount of visitor spending.

“We note that visitor arrivals from the rest of the world are still growing, especially visitors from Canada and that cruise visitor counts are growing at double digits during the first three months of the year,” said Richard Lim, DBEDT director.

“We are also pleased to see jobs are growing again in the areas outside of tourism, such as information, professional and business services, and educational services,” he said in a news release.

DBEDT is forecasting the number of non-agricultural payroll jobs to grow to 603,900 across the state this year, up from 593,200 last year. However, the 2011 forecast is still far below the 624,900 jobs in the economy in 2007 before employers began cutting back as a result of the economic downturn.

Hawaii hogs list of places families will see in summer

By Erika Engle
Article from: Star-Advertiser

Hawaii’s beaches are among the top summer destinations for families, according to a Travelocity booking data review released in advance of Memorial Day, the unofficial start of summer.

That’s sure to be music to visitor industry players’ ears and bottom lines.

Orlando, Fla., and Cancun, Mexico, were ranked Nos. 1 and 2, respectively, but Travelocity explains that Honolulu, at No. 3, was only one of the four Hawaii destinations in the top 10.

Travelocity points out that “getting to the world-famous Waikiki (is) a breeze” since direct-to-Honolulu flights can be had from many mainland markets. (it calls them “U.S. cities” as if Hawaii is not part of the U.S. Doesn’t the Roaming Gnome remember that, after his trip here?)

Maui is ranked the No. 4 summer destination for families, despite it being known as a famous honeymoon spot.

The No. 5 spot on the Travelocity summer-travel-for-families list is occupied by Kauai, which it describes as the “perfect island choice for active families and nature lovers.”

The fourth Hawaii destination is Kona, at No. 7. Travelocity informs readers that Kona is “an excellent destination from which to explore … the state’s most diverse” island, with an active volcano and snow-capped mountains. “Yes, there’s snow in Hawaii!” it parenthetically exclaims.

OK, we in the 808 state all know that’s true, but your columnist feels the need to point out that Mauna Kea rarely, if ever, bears a snowy head lei in the summer.

The rest of the top 10 is composed of No. 6, the Bahamas; No. 8, Puerto Vallarta, Mexico; No. 9, Turks and Caicos; and No. 10, the Dominican Republic.

The Travelocity list also cites average daily room rates for each destination, with Orlando, Fla., bearing the lowest at $87 and Turks and Caicos the highest at $248. Travelocity reports Hawaii’s ADRs as $136 for Honolulu, $181 for Maui, $154 for Kauai and $141 for Kona.

The trouble with such popularity rankings is that not everyone is a trend or popularity follower, and some are in fact crowd-averse to the point of steering away from things “everybody else” is doing.

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Maui April 2011 Sales Statistics

Brief Maui Statistics Overview:

April’s Sales Volume – April’s Residential Sales held steady at 87 homes sold, while Condo Sales retained most of last month’s gain at 119 units sold. Land sales came in at 14 lots sold.

April’s Median SALES prices – Home median prices rose again to $500,000 while Condo median prices rose to $340,000. Land median price dipped to $382,500.

Days on Market for Residential homes = 146 DOM, Condos = 141 DOM, Land = 362 DOM.

(General DOM Note: this is the average DOM for the properties that SOLD. If predominantly OLD inventory sells, it can move this indicator upward, and vice versa. RAM’s Days on Market are calculated from List Date to Closing Date [not contract date]. As such, it includes approximately 60 days of escrow time.) Also – Short Sales transactions can often take 4-6 months to close thereby extending the
marketplace’s average DOM.

“Year to Date Sales” numbers only compare January-April 2011 to January-April 2010. Short timeframe (monthly) views do not necessarily reflect the longer timeframe trends. Year to Date: Comparing January-April 2011 to January-April 2010 Residential unit sales rose
(+8%), average sold price = $670,632 (-9%), median price = $460,000 (-2%) and total dollar volume sold = $192,471,469 (-1%). This reflects the bump up last year due to 2009-2010 Federal Tax Credit programs and 2011 numbers will probably catch up as the year progresses. Condo unit sales increased (-6%), average sold price = $499,628 (-32%), median price = $321,250 (-25%). Total Condo dollar volume sold = $213,840,740 (-37%). Land – NOTE: Land Lot sales are such a small sampling that statistics in this property class are
not necessarily reliable indicators. Land lot sales decreased (-11%), average sold price = $720,201 (+27%), median price = $350,000 (-33%), Total dollar volume = $29,528,241 (+13%). Also, total sales for immediately past 12 months: Residential = 837, Condo = 1,121, Land = 121.

May 11, 2011 – Active/Pending/Contingent status inventory:
May April Mar. Feb. Jan. Dec. Nov. Oct. Sept. Aug. July June May
Homes 935 958 964 953 963 974 976 1,001 981 994 1,008 1,007 1,040
Condos 1,203 1,305 1,331 1,379 1,383 1,371 1,347 1,394 1,455 1,503 1,412 1,423 1,449
Land 547 554 557 566 569 601 596 601 620 604 601 591 579

Current Absorption Rate base on this month’s Active inventory divided by April Sales is:
Residential = 9.6 months, Condo = 10.1 months, Land = 39 months.

IN A NUT SHELL…… the good, the bad….. AND THE ROAD AHEAD ……
Strong buyer-showing activity is now evidenced in actual reported sales. Residential and Condo unit sales for March and April show sustained increase over the previous six months. The next few months will reveal if this is just an uptick or a trend that lasts. Inventories have declined somewhat over the past 12 months and include many short sales and REO (bank owned) properties which will need to be absorbed as sales before we can move ahead to a more normal marketplace. Interest Rates are remaining near historic record lows which may help motivate would-be Buyers to go ahead and buy IF they can qualify. Current World and US events will have ripple effects on cost of living, consumer confidence, and eventually our Real Estate Market.
FOR SELLERS: Sellers who don’t really need to sell (just “fishing?”) should stay off the market, and clear the marketplace for those who REALLY have to sell. UNLESS- you are motivated to Upsize, Downsize or Upgrade – While selling now will net less, your next property will cost less. Sharpen your pencil, talk to your CPA and Realtor® to explore the hidden benefits or consequences. Make no assumptions that will sting later. To be successful, Sellers need to beat competing properties with better property condition, REALISTIC pricing, good marketing, and flexible, creative terms (Seller Second Loan, Agreement of Sale, Lease-with-option-to-buy, and Sale-with-lease-back to seller). Days on Market figures show that properties priced right will sell in a reasonable timeframe. “Priced Right” is still the determining factor. BEST Deals are selling, everything else is getting old. Pro-Active Sellers are getting their properties appraised, inspected and surveyed in advance to encourage knowledgeable offers from realistic Buyers. This can prevent unanticipated escrow fallout or Buyers whittling your price down during the transaction when previously unknown facts come to light. Unrealistic Sellers continue to be ignored by the market and miss current opportunities that later become woefully apparent. They may even end up in a Short Sale or Foreclosure situation that could have been avoided.
FOR BUYERS: Low interest rates may start to inch up. Buyers should get Pre-Approved so they can shop in confidence (fewer last minute disappointments due to non-funding loans). More “short-sales” and foreclosures are happening in the marketplace, yet they can be less of a bargain than they seem, requiring more hurdles to leap and more time (often 4-6 months) to close, if at all. Be prepared, but BE REALISTIC. Lenders are much more stringent in requirements for loan approval. First-Time Home Buyers – Many programs are available….. attend a First-Time Home Buyers workshop, get familiar with the process, get qualified/approved, do your homework to get your own home. Many current owners never thought they would be able to own until they attended a workshop, discovered they could own a home,
and are glad they did. This low point in the market is your rare chance, so check it out carefully.

Disclaimer: Zooming in on the figures of a specific geographic area or property type may lead to different conclusions than the overall view. Maui’s market place is much smaller than Oahu’s, and a few high or low sales have a greater effect on the statistical numbers without necessarily indicating a big market swing one way or another.

The above statistics and commentary were provided by RAM (The Realtors Association of Maui). For specific questions or to discuss your Maui real estate goals and needs please call The Hansens at (808)879-3667 any time. As always, we look forward to hearing from you.

Foreclosures reforged

A new Hawaii law signed last week makes it harder for lenders to confiscate people’s homes

By Andrew Gomes
Article from: Star-Advertiser

Sweeping new measures to help financially struggling Hawaii homeowners avoid foreclosure became law last week.

Some observers are hailing the bill signed Thursday by Gov. Neil Abercrombie as one of the strongest in the nation and possibly a model for other states.

The bill, Senate Bill 651, is being touted as one of the highlights of the recently concluded legislative session, which was largely consumed by work on balancing the state budget.

“Sometimes when you’re faced with a crisis, you have to respond — and I think that’s what the administration and the Legislature is trying to do,” said Stephen Levins, director of the state Office of Consumer Protection. “It dramatically changes the way (foreclosures) are going to be done in Hawaii.”

The 101-page bill, now known as Act 48, overhauls state law on nonjudicial foreclosures, which is how the vast majority of home foreclosures are done in Hawaii.

The bill was one of roughly 30 related to foreclosures introduced at the Legislature this year and was shepherded by Rep. Bob Herkes, chairman of the House Consumer Protection and Commerce Committee, and Sen. Rosalyn Baker, chairwoman of the corresponding committee in the Senate.

Community-support group Faith Action for Community Equity pushed hard for the legislation. Some elements in the law also were recommended by a legislative task force representing lender and borrower interests, though lenders strongly opposed other parts including what is regarded as the most important piece of the new law.

That piece gives many homeowners a new option to conduct foreclosure mitigation efforts directly with a lender representative in front of a neutral dispute-resolution professional.

The law also ensures that homeowners receive enhanced notice of foreclosure actions and allows borrowers who contend a lender is improperly foreclosing to bring the case before a state judge.

OTHER PROVISIONS OF THE NEW LAW
• A home owner occupant subject to nonjudicial foreclosure may convert to judicial foreclosure by filing a petition with the Circuit Court within 30 days after receiving a foreclosure notice.

• Conversion to judicial foreclosure is not available to homeowners who participate in dispute resolution.

• Condominium associations may collect past due association assessments of up to $7,200.

• Mortgage servicers with a 20 percent market share in the state must maintain a local office.

Advocates of the reform measure note that it won’t help everyone facing foreclosure. In cases where a homeowner has lost his or her job and has no prospect of paying a reasonably reduced mortgage payment, foreclosure will likely be the outcome.

But the law promises to help significant numbers of people caught up in an epidemic.

Close to 24,000 foreclosure actions have been initiated in Hawaii over the past two years, according to real estate research firm RealtyTrac. Last year, 12,425 foreclosure cases equated to one for every 41 residences in the state, which was the 11th-highest rate nationally.

People in similar circumstances to city worker Wayne Salas stand to benefit from the new law.

Salas, whose wife works for the state, was concerned that double-barrel furloughs (city and state) would cut too deep into income they needed to maintain mortgage payments on their Ahuimanu house.

Salas sought help from his mortgage holder, Bank of America, in September 2009.

The waste-water treatment plant supervisor figured all he needed was a reduction in his 6.25 percent interest rate, which was set to rise next year. But bank representatives told him they couldn’t help because he hadn’t defaulted on his loan.

Salas, squeezed by the furloughs and the loss of some military pay, ended up defaulting. He sought to enter a loan modification program last year, but he said BofA put him on a waiting list because of a backlog and told him not to worry about foreclosure.

“The very next week, they posted an eviction notice on the house,” Salas recalled. Scared and belabored by the lender’s debt collection agents, Salas arranged to borrow money from his retirement account to cure the delinquency plus penalties.

BofA relented on the foreclosure, Salas said, and enrolled him last July in the federal Making Home Affordable loan modification program for six months. After disputes over missing paperwork and proper payment amounts, nonprofit organization Hawaiian Community Assets began to negotiate for Salas.

Earlier this month — 20 months and four foreclosure notices after Salas reached out for help — BofA agreed to lower his interest rate to 4.125 percent.

“I broke down in tears,” said Salas, who prays that more complications don’t arise.

Salas said no one should have to endure what his family has been through. “Nobody should be treated that way,” he said.

Salas’ ordeal speaks to a chief complaint of many borrowers: that federally sponsored loan modification programs offered by out-of-state lenders and loan servicers are plagued by overwhelmed staff prone to losing documents and providing inconsistent or inadequate instructions to homeowners.

Hawaii’s new law allows borrowers to force lenders or mortgage servicers to engage in face-to-face, or teleconferenced, dispute resolution overseen by a professional facilitator before a foreclosure can be completed.

The dispute resolution process was modeled after a roughly 18-month-old program in Nevada that claims 46 percent of mediated cases kept homeowners in their homes. A sunset date for the program is set for Sept. 30, 2014.

Levins, the Office of Consumer Protection director, said borrowers shouldn’t be at the mercy of ineffective loan agents, which he said in some cases involve loan servicers that stand to financially benefit more from foreclosure than from loan restructuring.

“If someone can stay in their home and it makes economic sense for the lender, it’s something that should happen,” he said. “It shouldn’t be something that falls through the cracks.”

Baker said it wasn’t uncommon for borrowers, who were working with lenders on what appeared to be hopeful loan modification plans, to be informed a foreclosure auction had been scheduled — or that, in rarer instances, their home had been sold.

“That’s not right,” she said. “You just don’t treat people that way. We understand not everybody is going to be able to stay in their home, but at least give people some dignity and an opportunity to explore all their options in a fair way.”

Mortgage industry representatives opposing the bill claimed that all the new requirements will make loans harder to obtain and more expensive, thereby hurting home buyers and sellers, and stifling Hawaii’s housing market in the midst of a fragile recovery.

Sen. Baker called that claim “baloney.”

Levins noted that no opponent of the bill presented any study attempting to support the claim.

Carl Bonham, director of the University of Hawaii Economic Research Organization, said it would be too hard to speculate on the veracity of the mortgage industry’s claim short of a study.

Another fear the mortgage industry raised was that the options for dispute resolution or court oversight would allow deadbeat borrowers to live mortgage-free in their homes for longer by using the law to drag out foreclosure.

Levins said a few borrowers could try to abuse the new law but that obligations of borrowers under the law should dissuade abuse. “We don’t think that’s going to be significant,” he said.

Levins said timetables under the dispute resolution program could actually speed up loan modification cases and resolve bad loans — either through restructuring or foreclosure — more quickly, which would benefit lenders.

“We’re not asking lenders to do anything out of charity,” he said. “We acknowledge they’re a business. We’re just trying to help people. It’s really a win-win.”

Lenders might disagree, but no out-of-state lenders testified against the bill.

BofA representatives met privately with lawmakers and announced plans to hold face-to-face meetings with Hawaii customers at a series of workshops. Wells Fargo announced a similar plan recently.

The Rev. Bob Nakata, a longtime affordable housing advocate and former state senator, said the moves by BofA were too little, too late. “If they were doing this (meeting face to face with customers) all along, the problem would not have been so great,” he said.

Out-of-state lenders relied on trade associations such as the Hawaii Bankers Association and Hawaii Credit Union League to testify on the bill.

Local lender associations opposed provisions in the bill, but they also pointed out that they weren’t guilty of shoddy or improper practices attributed to out-of-state lenders, a point on which bill proponents agreed.

The Legislature passed the bill Tuesday, and Gov. Abercrombie signed it two days later. His signing of the bill marked the start of a moratorium on any nonjudicial foreclosures until the dispute resolution process is running, which will be Oct. 1 at the latest.

“This is a comprehensive, detailed, broadly based and extremely researched response to this challenge,” he said.

ACT 48 DETAILS
A key provision in Hawaii’s new foreclosure protection law is dispute resolution.

Here’s how it works:
Who can participate?
Owner occupants of residential property under nonjudicial foreclosure. (Nonjudicial foreclosures happen when lenders pursue a foreclosure outside of court, which is the case for most foreclosures in Hawaii.)

Owner-occupants must reside at the property for a minimum 200 consecutive days.

Owners of time shares, vacation homes and commercial property are not eligible.

What is the timing of the dispute-resolution program?
Program will be ready to start accepting applications by Oct. 1.

Dispute resolution proceedings will start Jan. 1.

Program sunsets Sept. 30, 2014.

How does the program work?
No nonjudicial foreclosures may be initiated until Oct. 1, when the program begins.

Mortgage lenders who pursue nonjudicial foreclosures after Oct. 1 will be required to file a notice with the state Department of Commerce and Consumer Affairs.

Upon receiving a foreclosure notice, DCCA will send information to the homeowner about the dispute resolution program.

Homeowner has 30 days after receiving DCCA’s notice to elect dispute resolution, which is optional.

If homeowner does not elect dispute resolution, the foreclosure may proceed.

If homeowner elects to participate in dispute resolution, lender must participate.

Upon election to participate, DCCA will take no longer than 14 days to set a date, time and place of dispute resolution session run by a neutral, trained professional. Session will be scheduled within 30 to 60 days unless an alternate date is agreed to mutually.

Dispute resolution session shall be no more than three hours but may be extended by one additional three-hour session at the facilitator’s discretion.

If parties reach an agreement, foreclosure is terminated.

If parties don’t reach an agreement, foreclosure resumes.

How is the program funded?
Lenders pay $250 with each nonjudicial foreclosure notice.

Homeowners and lenders participating in the dispute resolution program each pay $300.