Kona Kohala Blog

First, housing in West Hawaii.  North Kona and South Kohala continue to see increasing sales as prices continue their decline.  More and more people are seeing Hawaii, West Hawaii especially, as the ideal place to retire full time or just part of the year when it gets nasty at "home".

We hear about those people who are "upside down" or "underwater" on their homes and investment properties but the smart ones don't always, actually, seldom, make the news.  These are the people who have lived within their means, who have put money away each month and who didn't use their homes as ATM machines during the run-up of property values early on in this decade.

Now they're faced with reasonably priced properties, low interest rates and choices, wonderful, wonderful choices.  Many of these budget minded people are even coming to the table with cash for their purchase, either all of it or the lion's share.  I can't help but think these are the people who grew up in relatively functional families where they learned early on the value of hard work and of saving.

We're also seeing this increased sales activity in all price ranges where just recently it was just in the low end products.  What's still missing is the upper middle class, the $600K to $900K home buyers.  These seem to be the people hit the hardest in the recession.  While many of the lower paid workers with more general skill sets have been able to find work, those specialized in management and mid-management are having a harder go of it.  It's also homes in this range that we're now seeing come on as foreclosures and short sales.  These folks were able to hold out longer and didn't want to tarnish their credit history.  The last thing they want to do is walk away but sometimes, there aren't many choices.

Speaking of choices, Obama could choose not to keep pushing Bail outs through congress. Also, internal White House documents that were leaked to Rep. Bill Posey, R-FL, and posted on his web site Friday indicate that Labor Department, Health & Human Services and the IRS all agree that by 2013, 51% of employers will have to relinquish their current health care.  That number is 66% for small businesses.  I could swear Obama said we'd be able to keep our health care, hmmm.

Back to the bail outs, it seems Obama owes a lot of unions a lot of favors and one way to repay them is to keep asking for more bail out money.  So far, out of the $862 Billion bail out funds, $100Billion was set aside for education.  About $34.7 Billion of that hasn't been spent yet but now he's asking for an additional $50 Billion of which another $23 Billion will go to union educators.

It's interesting to note that the number of students has increased by just 6% in the past decade while the number of teachers has gone up 15.8%.  I'm wondering what has happened to SAT scores with all these additional teachers?

Just a quick note on Obamacare; it's only been around 4 months and we've been told it's going to cut debt (he told us we'd be able to keep out health providers, too) and already, it needs a bail out.  Obama is requesting another $400 Billion for Obamacare.  When I was growing up, the only place we heard the number billion was in math class.  Now it rolls of politco tongues with no hesitation what so ever.

Can't wait until November.

Remember that old simple definition of insanity, "doing the same thing over and over again and expecting different results."  It doesn't take a large economics trained brain to see that what's been done for the last 18 months isn't working so why oh why are we trying to do more of it?

Him majesty, the president, wants another $50 BILLION in stimulus money for what?  The last $700+ BILLION hasn't helped.  If anything, it's only slowed recovery, it put off the hard decisions that need to be made until now.  The additional money will only put those decisions off a little longer but at the same time, put our country way deeper in debt.  At what point does someone comment that the king has no clothes, this isn't working as planned folks, let's move on to another idea.

As an aside, this president has a major set of you know what's.  First he socialized the financial sector, then the auto sector, at least Chrysler and GM.  Now he's done it to BP, a foreign entity has just been gobbled up by the United States government.  All this money BP has promised for everything from capping the well to cleaning each and every blade of grass in the Everglades is secured by a lien on the company.  Any default and guess who takes over control of British Petroleum?

Obama has taken no responsibility in this mess, zero.  This has all taken place under the direct purview and control of the U.S. government.  It took place on government land, on an operation overseen by a number of agencies of the U.S. government and allowed to rapidly expand because the U.S. government failed to approve any of the immediate measures urgently requested by the governor of Louisiana, Bobby Jingle.

Remember Truman and little plaque that said, "The Buck Stops Here."  I suspect Obama has a similar plaque presented to him by BP and Morgan Stanley and some of the other major contributors to his campaign that says, "The Buck Goes Here."  No recovery in this country until people begin taking responsibility for themselves and their actions (or inactions).

In real estate, we're seeing a little leveling off of the mini recovery we were seeing in lower priced properties.  Prices have begun to stabilize and sales activity right along with it.  The only buyers out there are the ones looking for very good deals and if prices begin easing north again those buyers will disappear quicker than a long tailed cat in a room full of rocking chairs.

Don't give up though, prices will go up and down for the foreseeable future.  Everything rests on a sustained jobs recovery and from the looks of things, that's not coming any time soon.  Stay tuned into the real estate market because there will be lots of good deals in the coming days.  We've gotten used to all the foreclosures and short sales out there and now we can expect to see other types of property come on the market.  These are people who for one reason or another have to sell at this time.  Many retirees are looking to minimize their holdings, others have realized that they're not coming back to Hawaii and for what ever reason feel the need to down size.  All of this makes for some very negotiable property transactions.

That title is such a good question, just where do good ideas go?  In the private sector, in successful businesses, good ideas get vetted and put into play in the bigger picture to increase productivity or efficiency.  In the public sector, they seem to get lost in the tiers of bureaucracy.

There is much talk and hand wringing about the oil spill and what we should do about it.  I was listening to the Sean Hannity Show a couple days ago where he interviewed two people with simple and effective ideas to deal with the problem.  Both had submitted their ideas to the feds and after a great gurgling sound followed by a belch, they were gone, probably never to be seen again.

The first idea was from a certified genius.  A young woman who at 10, entered college and by age 18 was a tenured professor.  Her idea was to use those robots they have down there to insert a tire or inner tube like device, lots of them actually, into the hole then inflate them all at once, shutting off the hole, creating a simple plug.  She has provided schematics and other drawings showing the validity of the idea but is still waiting to hear back.

The second idea was how to deal with the mess.  Since the government didn't provide the requested booms to collect the oil nor permit the building of the sand islands to prevent the oil from coming to shore, this company tried their own experiment.  They spilled oil into salt water in a large tank.  They then dumped in straw, right out of the fields straw.  They demonstrated this on the Hannity TV show and what they got when they removed the straw was crystal clear water.  The straw could then be processed to remove the oil.

This too, was presented to the government.  Along with the gurgling sound and the belch, it also has disappeared into the mire that is Washington D.C.

I had been thinking that I do a lot of complaining about how things are.  What if I worked on a solution for each problem I complain about?  Wouldn't that be a good thing?  Then I listened to the Hannity show and decided that good ideas don't seem to go anywhere.

I've found that in business, the very best ideas aren't worth a dime if no one considers them and implements them.  I'm afraid that the good ideas, the ones that would actually fix some of the problems we have won't be fixed.  If they were, Rahm Emanuel's oft quoted phrase, "Never let a crisis go to waste", would no longer be of benefit to this group of socialists.

Real estate wise, if you're going to retire and you want to get away from it all there are some great buys out there.  South Kona has some large lots, 1 to 3 acre subdivisions, which are on catchment water and can be a bit barren at first glance.  If you install a couple of good sized catchment tanks, one for the house and one for the yard, you could irrigate a very lush garden.  Just a thought if you want to get away from it all . . . which I'm thinking about right now.

I may be that prices in South Kohala and North Kona are leveling off in what has been a steady decline.  Prices had been averaging about 20% per year in both districts but now are slowing their fall.

Activity in June is starting slow but we expected that since it's the slow time of the year but we're still seeing increasing numbers of sales compared to the last few years as prices make property all too appealing to qualified buyers.  Now is a great time to shop with low prices, a fairly good inventory to choose from and interest rates that are still under 5% for a 30 year fixed rate mortgage.

A quick jab at Secretary of State Hillary Clinton.  She's caught Obama's apologizitis; today in Quito, Ecuador, our secretary of state for the United States of America, apologized because the wealthy here aren't paying enough to help all the poor.

Hillary said, "This is partly due to how taxes are structured, with the burden falling to heavily on the lower classes . . ., But in many places, including often in my own country, the simple fact is that the wealthy do not pay their fair share of taxes."

According to the IRS as reported by the National Taxpayer Union, the top 5% of earners, those making more than $160,041 per year, pay 60.63% of the federal taxes.  The top 10%, those making an AGI of $113,018, paid 71.22% of the taxes and the top 25%, those making $66,532 per year, pay 86.59% of all taxes at the federal level.  Now, those "lower classes", well the bottom 50%, those making less than $32,879, they pay just 2.89%.

I may be wrong but it appears to me that the wealthy are paying their fair share.  Consider that 47% of the "lower classes" pay no federal income tax at all and the wealthy seem to be doing more than their fair share so shut up, Hillary.  Get your facts straight and quit complaining about this country that allows you to travel for free, around the world, to bash us.  I want whatever taxes I paid for the Secretary of State travel budget back, enough!

It appears that prices in west Hawaii will continue to decline for a while to come.  In both North Kona and South Kohala, real estate prices have been falling since the peak in 2006 with no signs of it stopping.

Today's jobless report did nothing to help things as once again, more unemployed than expected hit the streets.  The DOW closed below 10,000 with the market slipping over 300 points on the employment report sending investors into U.S. Treasuries, a secure port in any storm.  The hugh demand sent yields down on the 10 year note which is directly tied to long term mortgage rates.

That's good news for property buyers looking for a loan.  It looks like interest rates on a 30 year fixed rate mortgage will stay at their historic lows under 5%.  As long as Obama continues his run to please the crowds and ignores our country's employment situation jobs will continue to be lost.  There is no incentive for big or small business to move forward.  Small business is getting beat to death with taxes and now with Obamacare, even more costs are hitting them in the pocket book.  Big business, while they would love to borrow money at today's rates, is hesitant because there's no one out there to buy what it is they produce.

In addition, our technology is still moving overseas where business and tax laws are more friendly to those attempting to build something.  Perhaps if Obama would spend a little time in Washington D.C. rather than crowd pleasing we could get something done.  While the oil spill in the gulf is a tragedy, more oil is dumped into the oceans every year by the tankers used to transport the stuff around the world but no one's upset by that.

The president came into office with an agenda and no one, no thing is going to change what he wants to get done.  First was socialized healthcare.  Next was socializing our auto industry and our financial institutions.  Now he's working on socializing big business with his Cap and Tax legislation.  All the while, he's working behind the scenes to empower the unions he's so beholding to by getting the secret ballot onto the list of other extinct ideas with the Card Check legislation.  Once he has all those things in place we will see an autocratic president looking for a life time job in the White House.

Hopefully, come November, strong conservatives will show themselves, men and women who believe in the constitution, who believe in fiscal restraint, a small but effective federal government, a strong military and a no nonsense approach to law and order, enough of the criminal rights and enough of the children's right.  Parents need to have the authority to deal with their children without fear of going to jail for abuse as if a spanking is abuse.  I had my share and I don't feel damaged or abused; I feel like may parents did something that was uncomfortable for them to do in order to give me a wake up call now and then.

It's also time to quit coddling criminals.  We need someone like the sheriff in Arapaho county Arizona as the country's top cop.  Criminals sleeping in tents, eating peanut butter and jelly sandwiches and wearing pink jump suits.  There should be nothing comfortable about doing jail time, what about the victim?

Have a great weekend and get involved for November, every vote counts.  Did you know that out of the 80 million plus ballots cast in the last presidential election it was actually decided by just over 27,000 votes?