Kona Kohala Blog

Wow!  What a crazy 100 days it's been since obama took office.  I never dreamed one person, okay, three people if you count Princess Polose and Prince Harry, could dismantle so much of our country in such a short time.  I really didn't think so much damage could be inflicted and still have most of the populace thinking this guy is helping.

Just like Juan Peron and Hugo Chavez, obama has nationalized first, our banks, now our auto industry.  He has single handedly scrapped private enterprise and replaced it with government controlled industry and we all know how well the government does with industry.

After dumping untold billions of dollars into the failing auto industry he's admitted it didn't work so he's turning the majority ownership over to the union, the UAW and all that tax payer money, yours and mine, is lost.  Do not doubt for a moment that what we are seeing is socialism, pure, unadulterated socialism.

So, what does this mean for investors?  Buy real estate!  Why?  Let's start with all the funny money that's been printed in an effort to save industries and companies that should have been left to die.  Interest rates are being held down by the feds, the private banks (yes, the federal reserve is a private banking consortium) are being told to keep rates down against their better judgment.  One of the reasons loans are so hard to come by is that the lenders can't make obscene amounts of money loaning at 4% to 5%. 

Given a little time, we'll see all this new money hit the streets and we're going to have inflation.  When the begins, probably by years end, the feds will have to raise interest rates giving the banks official approval to raise their rates.  Loans will start to be made.  As time goes by, inflation will continue to grow; it can't help but happen when you create over a trillion dollars in play money.

Why real estate?  Let's say you buy property today at todays rates and you're paying your mortgage in todays dollars.  When inflation begins we're going to see it spread across the board meaning we'll be paying more for everyday items but we'll also be making more.

If your budget allows you to comfortably make payments on a home or second home or even an investment property then when your income goes up with inflation, that mortgage will make up a smaller percentage of your income.  This is assuming you get into a fixed rate mortgage which, today, has a lower interest rate than an adjustable loan.

The value of real estate will also be going up giving you even more equity and buying power.  Remember, everything cycles so we will recover from this recession but we will also have a down turn following the up turn.  Planning ahead now for the turn around can not help but be in your best interest.  Property is on sale and while we may not yet be at the bottom, we are close.  Buying real property is an excellent hedge against the impending inflation.  Even buying an investment property now that you can sell when you're ready to retire will provide the money you need then to buy your dream home at the then market value.

As long as the administration understands that a strong housing sector is the only guarantee of a strong overall economy they won't mess with it.  Housing will not be nationalized like so many business sectors like banks, finance and now the auto industry.  Real property, held for a substantial length of time, minimum of 5 years, is the best investment you can make. 

Talk to your investment and tax advisors.  Make sure this kind of investment will not cramp your style and that it fits in your budget.  Make sure that you won't have to sell before the market has had time to recover; be conservative in all your estimates then seriously consider real property as a viable option for your portfolio.

If you're not on our newsletter email list contact me at Robert@FerrariPacificRealty.com, no charge, no obligation and cancel at any time.  Aloha

Hawaii county government owned a bulldozer that in 2000 was declared surplus.  Now this particular bulldozer could be bought through various companies on line for $125,000 to $150,000, the county of Hawaii decided to sell it to their good friends at C&H Ishii Construction for $60,000.  Okay, that's stupid and we all have come to expect that from our politicians and their good ole boy friends, it's how they entertain us.

Last week, it came to light through an article in West Hawaii Today, our local newspaper that's commonly known as West Hawaii Yesterday, that the county has been leasing back that very same bulldozer since 2000 for $15,000 per month.  Not only are they leasing it, they're paying for any modifications needed and all maintenance costs.  One figure has the cost of the bulldozer at over $1.4 million so far.

Now, for the really amazing part, no one is doing anything about it.  Calls have been made to the mayor aka "good ol boy #1, the county prosecutor and a number of department heads all of whom have not returned calls.  I'm wondering just how far you can push people before they begin to push back?

I have a client, two actually, who are looking at this buyer's market through true investor eyes.  In my last newsletter, I commented on two condo complexes in South Kohala, one in Waikoloa Beach Resort and one in Mauna Lani Resort, that had both experienced large price declines in the past couple of years.  I believe there are great bargains to be had in each of the complexes and that there will be huge appreciation in the next 5 to 7 years.  One, they are in great locations and two, they are newer, very well built condos with all the amenities.

My clients currently own a condo in the Waikoloa Beach Resort that's a cut or two below the ones I recommended but still a very nice unit.  After reading the newsletter, they drove over to look at one of the complexes since they are now on island.

They said the developers agents couldn't offer enough to get them to buy.  They had just dropped the prices again, they were offered a huge amount of money to cover all their closing costs and the developer would rent back the unit for a year as a model at a very competitive price . . . wow!

We could look at the fact that they paid top dollar for their current unit and they'd be taking a $200K+ loss or we could be realistic, which they are.  We look at their Schedule E since they have been using this as a rental property since they bought it.  This tells what their annual bottom line is.  They didn't buy all cash, they put a small percentage down.  Then we look at the principal they paid and other monthly costs that weren't tax deductions because it was a business. 

Then we look at their rental income, which has been pretty good for them.  When we add up the costs and subtract the income we see that they really aren't losing anywhere near $200K+, in fact, it's a very small fraction of that number.

Now we look at how discounted the price on the new property is compared to where it was a year ago.  We look at the cost of getting in and the potential for income as a rental unit.  What we have come to realize is that if you're moving up in this market it is a great time to buy.  You may take a small loss on your current holding but you may realize a huge savings and appreciation on your new purchase.  It is time to think, realistically, about moving up if you have investment property in Hawaii.

Contact me and let's go through the numbers. aloha.

We're nearing the bottom of our real estate market in west Hawaii.  It's been over 3 years now, prices have come down quite a bit, interest rates are at historic lows and there's a very large inventory to choose from. 

As far as the economy is going, the administration is pretty much going all out to pump imaginary money into the economy through numerous means, most of which are helping the very wealthy, the unions or the very poor, more on that later.  For now, suffice it to say that there's a lot of money flowing into our economy that can't help but stimulate something.  The money has been created out of thin air and will the recovery be but a recovery none the less, just one we're going to pay for big time in the not too distant future.

That being said, the market is near the bottom and will begin to turn around within a year.  Before the turnaround takes place there will be a leveling off which, I believe, is what we're seeing now.  Here are three best buys for condominiums, two in South Kohala and one in North Kona.  My opinion is that when the market starts to turn and prices begin to recover, it's going to be the nicer, newer condos that recover their prices first and that's where we're going to see the greatest appreciation, in my opinion.

The first condo is in Golf Villas.  This is a newer complex located in the Mauna Lani Resort.  I just sold one of these and am familiar with the units and know what to look for.  The condos are roomy with nice golf course and mountain views.  Higher end fixtures and amenities are used in the units and as an owner, you have membership in the Mauna Lani Advantage Program.  This gives you a number of discounts including half price golf and use of the beach club.  There is a short sale in there listed at $399K, a 2/2 with 1,460 sq ft of living space and was built in 2005.

Next is Hali'i Kai.  This is one of my personal favorites and is located right on the ocean, the complex not this unit.  The private beach club sits right above the water with a free form lava rock looking pool complete with spa and water falls.  In the club house is a beautiful restaurant with it's own chef.  The units are very well done, large and comfortable.  The best buy here is listed at $425K, has 2 bedrooms and 2 baths and 1,082 sq ft of living area.  This property is between the Hilton and Mauna Lani.

The last best buy is in North Kona at Sea Scape.  This is also a 2/2 with just over a thousand square feet of living space and is listed at $248,500.  This is not a well known complex originally being built as a lower income project.  The builder went ahead and used nice finishes and a very comfortable floor plan.  This one was built in 2007 and the maintenance fees are very doable, at least for now.

For information on any of these units please call 808-896-0661 or email me.  I'm an Accredited Buyer's Representative and can assist you with any property in west Hawaii.

A brief comment on the Spread the Wealth programs being created by our president.  He talks about tax reduction for the lower income classes but that's not what's happening.  Instead, he's using the tax code to create more debt for the country.

Stimulus bill HR-1, the American Recovery & Reinvestment Act of 2009 created the "refundable" Making Work Pay Credit and increased and made "refundable" the Hope Scholarship Credit, now called the American Opportunity Education Credit.  This administration just loves these titles and probably has a whole department that does nothing but create these names; maybe people that used to work in the greeting card industry.

He's also increased the two largest "refundable" credits, the Earned Income Tax Credit (EITC) and the Child Tax Credit.

"Refundable" really means spending program.  "Refundable" credit means that low income tax payers whose tax liability is less than the credit value get checks from the IRS for the difference.  Let's say their tax liability is $2,000 and they get a "refundable" credit of $5,000, the IRS sends them a check for $3,000.

Increased government spending does NOT increase economic growth.  In order to get that $3,000 that money has to come from somewhere either taxes or borrowing.  There is no new spending power, no new creation of wealth just a redistribution of wealth.

These types of programs are not stimulating the economy.  They aren't putting people back to work or encouraging entrepreneurs to start new businesses.  It's just another spending program and you can not spend your way out of debt.

Inventory, also called supply, is measured in months for property.  It's the number of months it would take to sell all existing listings if no new property came on the market.  A 6 month inventory is considered a balanced market.  Less than six months is a seller's market and more, a buyer's market.

Today, in North Kona, we have a 30.76 month inventory of condos and a 24.6 month inventory of Single Family Residences (SFR's).  South Kohala is a little more skewed with a 40.09 month supply of condos and a 16.9 month supply of SFR's.  North Kohala has over 4 years worth of homes on the market at 48.57 months.  That's a lot to choose from for a buyer.

These properties are in all price ranges, also meaning you have choices no matter what your price range is.  Interest rates are staying low, for now.  Bank of Hawaii reports 30 year fixed rate loans for just 4.375% interest with 2.375 points for an APR of 4.580%.  That is a great rate!

People are complaining about how hard it is to qualify but it's really not.  It's the way it was before all the creative financing came into play that got us into this fix in the first place.  There are still 100% loans, believe it or not but most require some down, a good credit score (over 700), a job and proof of your ability to repay the loan.  Being a conservative, that sounds reasonable to me.

We have two of the three components of a perfect buyer storm, low interest rates and a huge inventory.  All that's missing are low prices.  The median price today is about where it was in mid 2003.  Hawaii hasn't come down as far as the "sand states" where all the trouble seems to be.  The sand states are California, Nevada, Florida and Arizona.  I have no idea who first called them the sand states; I thought it referred to their less than stable base for all the crazy growth that went on there.

Hawaii may still have a ways to go but when things pick up on the mainland is when people start looking west again.  Although seemingly a little farther away, Hawaii remains a sought after goal for many who dream of living out their golden years, at least part of each golden year, in the sunny warm clime of the 50th state, and why not?

Hopefully, our president will grow a spine and stand up to the other demigods out there like Kim Jung Il who get their kicks firing missiles over our allies like Japan, missiles that could make a mess of Hawaiian real estate.  Obama seems to enjoy playing nice with these people who threaten to annihilate the United States, people like Kim, Iran (I don't want to waste my time learning how to spell or pronounce his name), Chavez, Castro and the rest of the socialists who don't like us.

It's unfortunate that Obama knows so little other than the party dogma.  It's too bad he's had no experience beyond his little Chicago neighborhood organizer role to know what it's like in the real world.  He doesn't believe that there are people out there who want us dead.  He does believe that he can make nice with these people and we can all live happily ever after . . . NOT!

In a time when Russia is rearming itself, when China has more money than it knows what to do with and is building a first class army, navy and air force and when the whinny little demigods like those in North Korea, Iran, Somalia can back down the greatest country in the world, holding onto real estate may be the only asset worth having.

This administration is taking over banks and now industries like GM, Chrysler, etc. and putting their puppets in place to run them.  These are people with no experience, no hands on time in such positions and no business being there.  We know from experience that government can not run a business, there is no question about that.  You think the market is down now, wait till government is making the decisions.

Enough of this rant.  Yes, I'm worried.  Socialism doesn't work.  If it wasn't for the U.S. the world would still be in the 1930's.  It's our ingenuity and creative spirit that drives the world.  It's competition that has made us great.  Socialism kills capitalism so while capitalism may need some reforms, it doesn't need the death knell of socialism.

What a time to be a buyer.  We have a large inventory of Single Family Residences (SFR's), condos and land to choose from.  Interest rates are staying at historic lows and prices are down to where they were in 2003.

Sales activity is slow, very slow meaning most sellers are anxious to see a qualified buyer show interest.  Sellers are willing to negotiate and some are willing to help buyers by carrying part of the note or even complete owner financing.

In North Kohala there has only been one SFR sold this month compared to 5 last April.  In South Kohala the number of sales of SFR's has gone from 12 last year to 5 this year and in North Kona the number has gone from 33 in 2008 to 12 in 2009.  Condo sales in South Kohala are down 78.95% from 19 to 4.  North Kona is no better having gone from 20 to 4 this year which is an 80% drop in the number of sales.

All in all this a probably the best buyer's market we've seen in a very long time.  It may stay this way for a while the way the administration continues to botch housing recovery efforts.  The only thing that seems to be working right is the First Time Homebuyers Tax Credit.  Large numbers of first timers or those who haven't owned in three years, are rushing to apply according to the IRS.  You do have to buy before November 30, 2009 in order to qualify for the $8,000 credit which unlike the earlier $7,500 loan, does not have to be repaid.  At least they seem to have gotten one out of about 6 plans right.

One they don't have right at the local, state or federal level are the new "fees" we're getting in lieu of new taxes.  It seems that all governments at all levels have trouble living within a budget and a fixed income.  We, the people, have to do just that so why not those who "serve" us?  Or do they?  It seems that they only serve themselves, how sad is that?

I was asked about good deals in the Mauna Lani Resort and the Waikoloa Beach Resort I suppose because I said there were some.  I wasn't able to rattle off my two favorites and I felt like the person who had asked was disappointed.

While there are lots of good deals like a luxury condo selling for more than 30% off from $1.45M down to $1M or less expensive condos that were $700K now for $500K, just how good a deal it is depends on you.  How much money are you putting down?  Is this a cash purchase?  What kind of a Return on Investment (ROI) are you looking for?  What do you think the economy is going to do over the next 5 years?

A good deal, in my mind, means you're saving 25% or more over what something sold for a couple of years ago.  An investor may think a good deal is something that runs in the black i.e., returns more money than it costs them each month.

If you buy with cash, a good return may be 7% per year on that initial outlay.  If you think the economy is going to be improving in the next 5 years then a good deal may be an "under valued" property that will appreciate greatly in the future.  A good deal can be many things but most often is a property that meets your definition of a good deal.

You tell me what your intentions are with the condo or home i.e., rent it all the time or rent it part of the year when you're not using it.  If it's the latter, will you be here during the winter, our peak earning season, or in the summer when it's considered low season?  Are you going to buy it outright or are you going to finance it?  If you're financing, how much are you going to put down which tells me how much you'll be financing, what your monthly mortgage is and how much you have to gross to give you the ROI you want.

As you can see, there are lots of variables.  Buying an investment property should not have any of the emotions found when buying a home to live in.  That means if you're planning on living in this property for part of the year, emotion may play a part but it should never be a major player unless you know you're going to be here a lot and you're going to keep it a long time.

If you're considering an investment property let's start the dialog now.  There's lots of information that needs to be gathered and then applied to numerous properties.  We are in a strong buyer's market meaning there's lots to choose from.  A well thought out purchase will work best and that takes time.  Call today, 808-896-0661 or email Robert@FerrariPacificRealty.com.

It would seem that with all the inventory there is available in this buyer's market that finding just what you're looking for would be easy.  In many searches that is the case but every once in a while nothing seems to be just right.  Because it's a strong buyer's market, buyers don't want to settle, they want the perfect property and sometimes it's just not on the market.

Because our number of sales has been so low, many sellers have had properties on the market for as long as a year, some even more, then decided enough of that and pulled it off the market.  They may still want to sell but just got tired of the showings or not having showings and decided to wait it out.

One advantage of working with Ferrari Pacific Realty is that we know the market, we know what property is out there because we attend our board caravans, an opportunity to preview property as it comes on the market.  Because we've been doing this for 13 years now, we've seen most properties out there and every once in while a buyer will ask for one that we've seen but isn't currently listed.

Today is one of those days.  I just started working with a couple looking for a home and they have specific needs.  We looked at a few homes that came close but nothing was just right.  After sitting down and talking more about their likes and dislikes I remembered a property that had been on the market a couple years ago in an area they are interested in but currently has no property for sale.

I have a call into the owner to see if they are still interested in selling and if so, would they like me to contact their last Realtor.  One of the reasons we get along with other agents working here is that we do not steal clients or try to go around other professionals.  We're all experiencing difficult times right now so a little bit of trust goes a long ways.  I believe the pie is infinite, not finite.  There's plenty to go around and being greedy has never paid off, ask all the bankers and loan brokers who are out of business now, because they got greedy.

Speaking of greedy, what's up with the states, counties, citys, etc.?  There's talk about new "fees".  Nobody is talking raising taxes but they are talking about raising fees, how is that different?

Wouldn't it be nice if you and I could raise our "fees" when we run short or spend over our budget?  Problem is, we can't and I don't think it's right that government considers such increases either.

Government needs to look at what they have and figure out a way to live within those means, just like you and me.  In times like these, sacred cows should no longer be considered sacred.  A huge percentage of most government budgets include entitlements; that's pay and perks for those who no longer produce and in most cases, very generous pay and perks.

When we as individuals run low on money, we don't really have any sacred cows, all the funds get tapped if necessary.  Why should our bloated government be any different?  Why should they be able to come to us and say, "We're a little short this year so you have to pay us more in the form of fees."?

It's time for our public servants to live like those they serve.  The problem is that they seem to have forgotten the servant part, they believe they are the new aristocracy and just like everyone from Saddam Hussein to Kim Jong Il they live well while us commoners suffer.  It's going to get worse before it gets better, we're told.  I wonder just who it's going to get worse for?

While Foreclosures and Short Sales may be slowing on the mainland, here in west Hawaii the number keeps rising.  We typically follow them by 6 months to a year in real estate trends so we may be coming close.  In the mean time, Short Sales are still popping up regularly.

I have a one bedroom condo in Kona Mansions for just $120,000.  There's also a foreclosure in there for even less.  We're seeing some well priced condos coming on the market today and if it weren't for the ridiculously high maintenance fees they would actually make money for investors.  These fees are being called "the second mortgage that doesn't go away."  Still, as prices come down they are worth looking into.

In South Kohala there are 51 Single Family Residences (SFR's) for sale under $400K.  North Kona has 44 more for sale along with 270 condos.  There are 81 more condos for sale in South Kohala under $400K also.

The trend in declining numbers of sales and median price is beginning to level off.  W won't know we've hit the bottom, usually, until about 2 months later when we look back and see a steady uptick in numbers.  Take a look at our company listings for some very well priced properties.  Also, remember, I can work with you on any property for sale in Hawaii as a Buyer's Representative.  Being an Accredited Buyer's Representative and a Certified Residential Specialist gives me a host of tools to assist you in a home or investment property search.

I'm working with a couple now who in the past had always worked with the listing agent to keep things simple, they thought.  After just one transaction, they said they had no idea how much better prepared they were and how much smoother the transaction was with someone working just for them.  They were used to doing most of the work and following the transaction through escrow but have realized that having your own agent working for you not only simplifys matters but gives you better representation.  For instance, they know nothing about checking building permit status; in this case, we had to have a pool inspection because it had never been finaled by the contractor and there were a couple small things that needed to be completed.  Buyer's reps are normally no cost to you so don't look for a home without one.

I must admit that Obama did something right for a change.  By telling the military, the Navy, to do whatever they needed to do to free the captain of the Maersk Alabama, he took a big step in reestablising American autonomy and authority on the high seas.  This should not have been allowed to go on as long as it did.  The first time the captain jumped in the water and attempted to escape, those same snipers that killed the pirates should have been authorized "deadly force" to allow the captain to swim to the Navy ship, but they weren't.  So better late than never Mr. Pres.  Let's not hog tie our military the way we have since the Korean War. 

Wars are terrible things and as long as we pretend they are civilized they will continue to proliferate.  The Geneva Convention is one of the biggest and cruelest jokes ever played on the people of the world.  Adopted in 1949 after the horrendous mistreatment of prisoners during WWII it sought to make those who had never been in a war actually believe there was something civilized about armed battle.

There is nothing civilized about people actively trying to kill each other.  We have always had wars and will always have more wars, they are a part of humanity.  As long as we have leaders who are empowered by power, who are driven by greed and interested in only their own comfort and authority there will be war.

Until every man and woman who seeks power is first required to serve in the military and actually fight a battle there will be no real deterent to war.  Until each leader's children are on the front lines along with those not eligible for deferrments and preferential treatment, there will be war.  We the people are expendible in the eyes of our leaders.

Until our leaders have walked in our shoes they will not know or care about us.  They may address our problems, seek our votes by telling us how they will make our lives better but bottom line is nothing will change until they've been where we are.  As long as they have their pay guaranteed, their health benefits provided for life and all the other perks they've set up for themselves in place they can not know how the rest of us live, the things we worry about, the fears we have for our families or the stress we live with everyday.

First, some statistics for North Kohala, South Kohala and North Kona.  Here's a quick look at how April is looking one third of the way through the month compared to last years full month numbers.  In a balanced, perfect world, every number would be one third of last years but . . .

North Kohala has 1 Single Family Residence sold compared to 5 last April.

South Kohala has 3 sold compared to 12 last April.

North Kona has 5 sold compared to 33 last April.

North Kohala has a total of 84 active SFR's listed for sale.

South Kohala has 208 SFR's and 336 condos for sale.

North Kona has 439 SFR's for sale and 402 condos for sale.

Needless to say there is a large and varied inventory to choose from.  Prices are low and getting lower, at this time at least and interest rates are still low, for now.  If you've been thinking about buying you may not want to wait too much longer.  Remember the bottom of the market isn't realized until about 2 months after it passes.

I've set up 2 new pages with information on Loan Modifications.  If you or someone you know is in that situation, please read through these.  This was provided by Joanne Stubenberg, a senior loan officer with Bank of Hawaii.  You can get there by clicking here or the button on the home page titled Loan Mods.

We still have very large inventories of all types of properties available in North Kona and South Kohala.  Below is a chart with the numbers of activie listings in each district and then a break down of the totals from $500K and down.

Investors are always looking for properties that will produce an attractive bottom line consequently, the lower the purchase price the better the chances of running in the black.  As the decline in prices continues, buyers are getting more chances of finding condos, especially, that will generate an acceptable return.

Bank officials have finally reached the point of fighting back.  Having tired of taking all the heat as the bad guys in the current economic fiasco and fearing that the administration has designs on their jobs, bankers are taking a stand saying they aren't the cause of the problems nor are they the reasons why we have yet to begin pulling out of our recession and they're probably right.

Many of the smaller banks have already paid back the feds saying they don't want to be crippled by onerous regulations attached to the hand outs, er, bail outs.  Now some of the big guys are trying, unsuccessfully, to give the money back.  They say that is they keep it, the government is now in a position to remove the higher ups in the organization and replace them with more qualified people to run the banks, aka their friends who are currently out of work.

There has never been a bigger power play on the part of our government in the history of the country.  Instead of any form of "laissez faire" we have just the opposite.  Never has a country moved so quickly towards socialism without a revolution.  First, the feds want to determine maximum wages that can be paid to any company accepting government money, now they want to name CEO's and board of directors members.  This is scary.  How can anyone look at Europe and the financial mess they've been in for a hundred years of more and attempt to model our country after that?

Capitalism, while flawed, is still the very best method of enriching a people and a country.  Only by allowing people to be rewarded for their creativity and risk taking can innovation become the norm.  Capitalism is what made this country great.  Capitalists are the people who built libraries, universities, hospitals and endowed charities.  Capitalists are the people who endow the arts and music.  Without capitalists you have government sponsored programs and we can look at social security, the mail system and every other failed endeavor that has gone over budget and over time.  The only thing the government has ever done right is arranging their own salaries, retirement plans and medical benefits and that hasn't really helped any of us common folk much at all.  aloha

There is much interest in foreclosure property these days but much of that interest is based on incorrect information.  It seems there are those who believe foreclosure property is everywhere and selling for just pennies on the dollar.

While it's true there is steady stream of foreclosures coming on the market these days there aren't as many as some think and they are seldom as inexpensive as some think.

Typically what happens at a foreclosure sale here is the property is put up for sale by the commissioner, an attorney hired by the lender to auction off the property at a public sale.  In almost all cases, the first bid is made by the lenders representative who's there to take the property back if not enough money is offered.  That first bid is usually around what is owed.  Because of the current market, most properties going into foreclosure are there because more is owed than what the property is worth.  If it were the other way around, the owner could sell and walk away with a profit.

So what happens at most auctions is that the lender buys back the property then turns it over to a broker who will then attempt to sell it for whatever they can get so the bank loses as little as possible.  These foreclosed properties become REO's, Real Estate Owned bank property.  Below is a list of foreclosure properties currently in MLS.

If you would like a list of foreclosed or REO properties or those being sold as Short Sales, email me and I'll get it over to you.  If you'd like to be on the Aloha Friday weekly newsletter list, email Robert@FerrariPacificRealty.com and I'll put you on the list.  aloha

March came in like a lamb and went out in pretty much the same form.  North Kohala had one higher end home sell which skewed the statistics there showing a 115% increase in the median price but for the year they are still down over <28%>.  South Kohala Single Family Residence (SFR) median price was down <6.99%> in March and <20.98%> year to date.  In North Kona SFR median price is down <7.1%> and <19.62%> for the year.

Market activity is down with the exception of North Kohala where March's one sale equalled last year's one sale so no loss or gain there.  In South Kohala the SFR number of sales was down just <5.88%> and North Kona was down <29.63%>.  Condo activity is still taking a big hit with South Kohala sales down <72.73%> year to date and North Kona down <38.3%> for the year.

Prices are still coming down, interest rates remain low and there's lots of property to choose from.  This will not continue, it never has.  Now is the time to consider owning real property as part of a balanced portfolio or for some of you, a great time to buy that retirement home or condo, maybe even a first home.  Call us so we can get you started, 808-896-0661 or email Robert@FerrariPacificRealty.com.

If you have a variable rate Home Equity line now is a good time to pay it off.  Interest rates are supposed to stay down now that the fed is buying toxic holdings and Mortgage Backed Securities (MBS's) but don't bet on it.  As property prices continue to slide, the banks are going to begin slowly raising interest rates without taking away people's buying power.

Unemployment is going to continue to rise unless some relief is given to businesses, especially small businesses instead of to a population that's getting used to hand outs.  People on the government dole don't contribute to our society, they take away from it.  Not only by not producing out put but by having lowered self esteem.  Mankind is a creative, active, production oriented animal.  When government steps in and takes away the need for any one of those traits, we suffer.  People get their feelings of self worth by doing constructive, productive work, by creating things that are appreciated by other people.

Obama is making the same mistake every other liberal politician has made over the years and that is believing that you can give people things and have them become productive members of society.  After nearly 50 years of food stamps, welfare, payments to unwed mothers that keeps them unwed and all the other programs we have for the poor and needy they still want more.  Our welfare rolls haven't decreased over the years, they have increased.

The money needs to go to business in the form of tax breaks not freshly printed twenty dollar bills.  Businesses need to be rewarded for creating jobs.  When people go to work and are secure in their jobs they begin to spend money.  All of a sudden the economy starts to move not because there was a temporary injection of fake money but because people are going back to work.  We can not increase the Gross National Product by printing money, only by increasing production and that means people need to go back to work.

Let the failing companies fail.  Both nature and entreprenuers abhor vacuums.  When one company fails, two or three new ones will take their place.  As time goes by, one or two may fail but the surviving one is creating a better product or service and is hiring and paying emlpoyees.  It's how this country got to be the best in the world and the only way we can do it again. 

Write to your representatives and tell them to read Ayn Rand's "Atlas Shrugged" and Edward Gibbon's "The History of the Decline and Fall of the Roman Empire".  Those two books alone will change their thinking and maybe, just maybe get things headed the right way here.  Now, go back to work.  aloha