HONOLULU (AP) – A non-Native Hawaiian student has been admitted to attend Kamehameha Schools this fall.

The schools’ board of trustees and chief executive officer made the announcement in a letter posted on the website of the institution dedicated to educating Hawaiian children.

The unidentified student was among some 45 students invited from a wait list for admission to grades 10 through 12, the letter said.

Kamehameha has a century-old Native Hawaiian-preference admissions policy.

”Non-Hawaiian applicants who meet our admissions criteria can be admitted if vacancies exist after the preference is applied,” the officials said. ”We will continue to offer admissions preference to Hawaiians because it is the most direct way to fulfill our mission of improving the capability and well-being of Hawaiians through education.”

The student follows in the footsteps of Kalani Rosell, a non-Native Hawaiian who graduated from Kamehameha’s Maui campus in 2007. He was admitted in 2002 after a list of Native Hawaiian students had been exhausted.

In 2003, another non-Native Hawaiian student was allowed to attend 7th grade on the school’s Kapalama campus following a lawsuit.

Kamehameha also has a campus on the Big Island. The campus that the newest non-Native student will attend wasn’t named.

Kamehameha Schools was established in 1883 by the will of Princess Bernice Pauahi Bishop to educate Hawaiian children. The largest private landowner in Hawaii, the trust has said that as of November, the value of its investments totaled about $7.7 billion.

Roy Benham, a past president of the Kamehameha Schools Alumni Association, said Friday that the school probably didn’t have a choice under its admissions policy but to accept the non-Native Hawaiian student.

”I think they did the right thing and they didn’t deny admission to any Hawaiian applicants,” he said

Who says housing on Maui is unaffordable? Just snatch this gem before it gets away! A steal at $150,000:

“Tucked in to a valley bottom with no utilities, this place takes you back to nature. The little shed on the property is tiny with a sleeping platform and it keeps you dry. Included is a new 5,000-gallon catchment water tank. This property is extremely private and is surrounded by old taro patches and fronts Honopou Stream.”

That’s creative marketing. Another way to describe the property might be:

“Quarter-acre lot, mostly under water. No electricity, half a bath. Closet-size (128 square feet) shack. Only $50,000 down.”

It is picturesque. A slide show can be found at the Maui Board of Realtors Multiple Listing Service at www.ramaui.com. This listing – not the lowest in price, by the way – is MLS 343234.

A real estate market in distress produces some odd opportunities for the venturesome and flush. Take MLS 342595, which is in Kihei. It’s a five-bedroom, 4-bath, modern home, a bargain at $319,900, considering that the county assessed valuation is $633,500.

However, the sales description is firm: “This bank-owned home is being sold AS IS, SIGHT UNSEEN, without Disclosures and Cash Only.”

It further advises: “Seller may not be able to convey possession at the time of closing.

. . . Consult an attorney regarding your responsibilities as a landlord and research eviction laws in Hawaii.”

MLS listings have always hinted at domestic dramas in the past, and they have become more interesting as disclosure standards have expanded over the years. What disappointment lies behind MLS 339328?

“This property is being sold with a 20 percent completed home. . . . The seller is not finishing the house currently under construction. . . . In the event the buyer chooses to finish the 20 percent complete existing house, it is a two-story large home with four bedrooms, four full bathrooms, two half-baths, with a very large family room and tall, tall ceilings! The house has . . . four-car detached garage.”

Then there is MLS 333331, a ” two-bedroom, two-bath plantation style home, 2750 square feet, built in 2004,” only $65 million. It comes with an extensive yard, called Hana Ranch.

The most expensive offering this week that does not include 1,200 cows is a 1-acre beachfront place at Kaanapali, MLS 332824.

The description, which seems aimed at agents rather than buyers, says: “With over 11,000 square feet of living space, this magnificent beachfront home has stunning ocean and sunset views. The outstanding craftsmanship is visible throughout the two master suites, six guest suites, media room, library, office and separate caretaker’s quarters. The warm sandy beach and azure Pacific are the backyard of this Kaanapali Estate. All of your client’s needs for health and well-being will be met with the oceanfront pool, Jacuzzi, yoga pavilion and exercise room. This extraordinary masterpiece property is the reason your clients have chosen to live on Maui.”

Asking price: $23.8 million.

Maui News: 

Through midyear, Maui residential real estate sales activity has zoomed upward, although prices have not.

In the first six months of 2009, there were 296 single-family closings. This year, 422, an increase of 42.6 percent. In the first six months of 2009, there were 407 condominium closings. This year, 666, a jump of 63.6 percent. Single-family prices edged ahead by 2 percent to an average of $768,866, but condo prices have fallen 11 percent to $756,119.

“I don’t know what’s really driving it, but people might believe we’re at the bottom,” said Bruce Faulkner of Maui HI Realty and president of the Realtors Association of Maui.

Faulkner said he’s not an economist, but he is sure that until the backlog of short sales and bank-owned repossessions is worked off, prices will not really go back up.

The distress sales are dragging down appraisals, and, “we’ve seen some sales killed when the buyers have seen appraisals come in lower than the offer. It’s even happened on Lanai.”

On the other hand, the $8,000 tax credit offered to first-time buyers boosted sales in the first half of the year.

So while the Maui real estate market is nowhere near what it used to be, it’s also nowhere near as bad as it has been.

Total turnover in Multiple Listing Service properties this year so far has reached $828 million. There have been years when that figure was well over a billion, but for the first half of 2009, it was only $569 million.

Prices are still way off their peaks – there was a time when the average price of a single-family house on Maui was a million dollars – which discourages people from trying to sell if they don’t have to, Faulkner said.

“People are not going to go into the market unless they’ve got no choice,” he said.

That makes for a market where clean offerings are scarce. There are still many short offerings, where owners who have not had foreclosure proceedings go to completion are trying to get out from under mortgages that are more than the house is now worth.

These are often complicated by second mortgages, usually held by a different lender than the primary mortgage. Short sales are notoriously hard to do, because the holder of the second mortgage, who ordinarily stands to get nothing, can stop it by refusing to cooperate.

Faulkner said the Realtors association has offered a course on how to manage short sales, hoping to get the local real estate business community all operating on the same page, so deals can get done. More than 100 real estate professionals have already taken the course, which will soon be offered again.

Mortgage rates are so low that Faulkner said he thinks they can hardly get any lower, which has caused him to rethink refinancing.

“In the old days, we used to tell people interest rates had to go down two points to make sense,” he said. With rates so low, now he recommends doing a calculation to see if it makes sense to get a 1 percentage point gain.

Sometimes it will, and he said, adding that “I like to see people get 15-year mortgages.”

That doesn’t reduce the monthly payment so much, but it means that very soon “they’ll be mortgage-free.”

Faulkner said the increase in turnover has been across-the-board for single-family sales in the first half of the year, although especially marked in Wailea and Upcountry.

Looking at percentages, Maui Meadows is the hottest spot, with closings up to 11 from two the year before, although prices have fallen 17 percent to an average of $828,000.

In Wailea-Makena, home sales have doubled to 18, and prices have jumped 22 percent to $4.2 million. That figure is skewed by one high sale, because the median sale – at which half the prices are higher, half lower – has hardly budged at $1.8 million.

In the similar resort residential section of Kaanapali, home sales also have doubled, to 12, and prices have fallen 6 percent to nearly $1.5 million. At Kapalua, sales rose from three to four, and the average price doubled to $4.2 million.

In Makawao, Olinda and Haliimaile, home sales rose to 23 from 13, and prices are up 10 percent to $504,000. In Kula, Ulupalakua and Kanaio, sales are up from 19 to 27, and average prices are up 14 percent to $649,000. In Pukalani, closings rose from 28 to 34 and prices fell 7 percent to $514,000.

The jumpingest place for home sales in East Maui, though, is Haiku, where closings more than doubled to 23 and prices rose 10 percent to $607,000.

The west side remains a much more expensive place to live than the rest of the county. In Lahaina, transactions in single-family houses rose to 24 from 15 and prices gained 8 percent to $947,000.

In Central Maui, there were 132 transactions (up from 113 for the previous year’s first six months), by far the most of any area, and prices fell 17 percent to $426,000. In Kihei, there were 81 closings, up from 53, and prices were down 19 percent to $524,000.

The median price of a single-family house, including Lanai and Molokai, may give a clearer picture of housing costs for ordinary folks, because it eliminates the influence of very high prices for a few mansions. This year, the median price for a single-family house has been $469,000, down almost $35,000 from last year.

The building of so many luxury condominium projects has changed the relationship in average housing prices. A generation ago, condos were Maui’s entry-level housing and sales were concentrated in Kihei.

Today, some of the most expensive housing in the county are the condos on Lanai (although the single transaction there this year was for only $480,000), and there was almost as much activity in Kaanapali (184 closings, up from 157) as in Kihei (203, up from 100). In Kihei, average prices fell 15 percent to $341,000.

The condo in Kihei is still Maui’s version of affordable housing, less than half the average price of a single-family home.

But the average condo is anything but affordable and at $756,000 is within $12,000 of the single-family average.

Top-end condos are moving like hot cakes, although prices are not so hot. At Kapalua, condo closings jumped from three to 14, at average prices of $1.6 million, up from only $1 million a year ago.

At Kaanapali, closings increased by 27 from 157 to 184. although prices were unchanged at $1.3 million. In Wailea-Makena, closings more than doubled to 64 and prices advanced 4 percent to $1.7 million.

The median price of a condo tumbled 32 percent to $428,000, with much of that attributable to an unusually skewed mixture of sales in Wailea-Makena.

* Harry Eagar can be reached at heagar@mauinews.com.

Safer investments for retirees suffer under new tax law | KHON2 Hawaii’s News Channel

Assume you’re a retiree who needs steady, dependable investment income, or you’re a younger person who wants some traditional “fixed-income” holdings such as bonds.

How should you place your bets to benefit most from the new tax law approved late last month?

Put simply, you’ll have to rethink your priorities – and probably take on more risk.

Retirees, for instance, won’t be able to get the biggest bang out of the new rules unless they move money out of bonds and into stocks. And if they are to get the highest possible income in retirement, they may have to give up the widely held belief they should never spend principal.

Life on a fixed income seems to get scarier and scarier.

How can this be?

Because the rules boil down to this: Any investment that pays interest becomes less desirable, while those that pay dividends or enjoy long-term capital gains become more desirable.

Hence, stocks become more attractive. Bonds, certificates of deposit and money market funds – the traditional safe havens for older investors – are less appealing.

Under the old rules, interest and dividend income were taxed at income-tax rates as high as 38.6 percent. With the new rules, already in effect, interest is still taxed as income, though the top rate has fallen to 35 percent. Most investors will pay even less – 25, 28 or 33 percent.

But dividends are no longer taxed at income-tax rates. Instead, they are taxed at the same rate as long-term capital gains – the rate on investments owned longer than a year. Moreover, that rate was cut to 15 percent from 20 percent.

Bottom line for income-oriented investors: The tax bill on a dividend paid on a stock may be just half what it is on interest from a bond, bank CD or money market fund.

The problem, of course, is that stocks are generally riskier. The price of the stock might fall, while a government-insured CD or a money market fund is very safe. Government bonds, and many corporate bonds, can be very safe as well, especially if you intend to hold them to maturity. (If you sell before maturity, any profit will be taxed at the capital gains rate.)

Fixed-income investors face a double whammy. They’re lucky if they make more than 2 or 3 percent on their bonds, CDs and money market funds. Second, the tax on that paltry earning will be substantially higher than on other investments.

Make it a triple whammy, since some investments that would seem to benefit from the dividend tax cut actually do not:

– Preferred stocks: These often pay larger dividends than ordinary stocks do, making them especially attractive to fixed-income investors. They are “preferred” because their promised dividends must be paid before dividends can be paid on ordinary, “common” shares.

I won’t get into all the complex ins and outs of preferreds here. The important point is that dividends paid by most preferreds will continue to be taxed as income, at those 25-35 percent rates. That’s because, in most cases, preferred dividends are really interest payments, so they won’t enjoy the 15 percent rate for ordinary dividends.

– Real Estate Investment Trusts: REITS are like mutual funds that invest in commercial and residential properties. Fixed-income investors like them because they must pass on to shareholders at least 90 percent of the annual income they derive from such sources as rent. And many are quite generous, paying 7, 8 or 9 percent – though share prices move up and down like stocks.

Unfortunately, REIT income will continue to be taxed at income-tax rates rather than dividend rates. This is because REIT income is tax-exempt at the corporate level. Dividends from ordinary corporations are getting a tax reduction because the corporation must pay tax on that money as well.

– Municipal bonds: There’s no change in the tax treatment of munis – their interest payments continue to be exempt from federal tax. This has long made munis attractive to fixed-income investors, especially those in high tax brackets. However, the relative benefits of munis are reduced slightly because tax rates on competing investments have been cut. Investors will have to figure which investments will leave them with the most after all taxes have been taken into account.

For young investors, the new tax rules are a great deal. These folks have long been advised to emphasize stocks. Since they have time to weather stock-market downturns, they can enjoy the larger returns stocks average over long periods. Now these investors also can benefit from lower tax rates on dividends and capital gains.

Older investors who need to emphasize short-term safety aren’t as fortunate. With fixed-income investments paying so little, and with the relatively high tax rates on this kind of income, many people will have no choice but to shift money to riskier stocks or stock funds in hopes of earning higher after-tax returns.

For many, the first impulse will be to look for safe dividend-paying stocks such as utilities. But they shouldn’t overlook stocks that don’t pay dividends. There’s really nothing wrong with selling shares – that is, your principal – to generate income.

After all, if you invested $100,000 in stocks that grew to $105,000 in a year, you could sell $5,000 worth of shares and still have $100,000 in shares. If you had $100,000 in bonds paying 5 percent, you’d have $5,000 in income and $100,000 in bonds after a year. Either way, it’s the same.

Of course, you can’t get 5 percent on a bond these days. Even if you did, the tax on your bond income under the new law might be twice what you’d pay on the same income if it came from stocks.

Maui News — WASHINGTON (AP) — Mortgage rates have sunk to the lowest level in more than five decades, but consumers aren’t rushing to refinance their loans or buy homes.

Mortgage company Freddie Mac said Thursday the average rate for 30-year fixed loans sank to 4.58 percent this week.

That’s down from the previous record of 4.69 percent set last week and the lowest since the mortgage company began keeping records in 1971. The last time they were cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.

Rates have fallen over the past two months. Investors wary of the European debt crisis and the stock market have shifted money into the safety of Treasury bonds, driving down yields. Mortgage rates tend to track the yields on long-term Treasurys.

On Wednesday, the yield on the benchmark 10-year Treasury note dropped to 2.95 percent. That was the first time it has fallen below 3 percent since April 2009, when the markets were beginning to recover from the financial crisis.

But tighter lending standards and declining home equity have made it difficult for many borrowers to refinance. Many who do qualify have already done so over the past 18 months.

Applications for mortgages rose nearly 9 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday. But they remain at only about half the level of early 2009 and a far cry from the refinancing boom of 2003 through 2005, when home prices were soaring and borrowers were able to pull equity out of their homes to pay for home renovations, boats and vacation homes.

Many Americans owe more on their mortgages than their homes are worth and can’t refinance through the usual channels. The Obama administration has launched programs to help borrowers refinance if they owe up to 25 percent more than their home’s value and have their loans guaranteed by mortgage giants Freddie Mac or Fannie Mae.

About 291,000 homeowners have participated as of March — a small fraction of the estimated 15 million homeowners who are “underwater” on their mortgages.

“I expect to see pockets of re-fi activity versus an overall wave,” said Scott Buchta, chief mortgage strategist with Braver Stern Securities. “The problem is, for many borrowers, they don’t have the equity in their homes.” If rates drop below 4.5 percent, Buchta said, that might spark a burst of refinancing activity. But it would be limited to people who refinanced or bought homes over the past year and have rates of 5 percent or higher.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on 15-year fixed-rate mortgages fell to an average of 4.04 percent, the lowest on records dating to September 1991 and down from 4.13 percent a week earlier.

Rates on five-year adjustable-rate mortgages averaged 3.79 percent, down from 3.84 percent a week earlier. That was also the lowest on Freddie Mac’s records, which date back only to January 2005.

Average rates on one-year adjustable-rate mortgages rose to 3.8 percent from 3.77 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for all types of loans in Freddie Mac’s survey averaged 0.7 a point.

Refinancing is generally considered worthwhile for homeowners who can shave at least three-quarters of a percentage point off the rates they pay now and plan to stay in their homes for a long time.

Besides the fees for the mortgage broker or lender, there are fees for title insurance, a new appraisal, document processing and other charges. In “no fee” mortgages, costs are often added to the loan amount, or the interest rate is higher.