Kona Kohala Blog

The latest "crisis", Hawaii always seems to have one going on, is the Super Ferry.  After many millions of dollars being spent on research, feasibility studies, public meetings, numerous permits and the cost of building the ferry and getting it to Hawaii, protestors stopped the whole thing.

This is not the first time a vocal minority has held up progress in the People's State of Hawaii.  This is similar to Hokuli'a which did nothing but make the lawyers wealthy, cost the developer more money and delay the building of homes . . . did I mention the over 200 "local" people who lost their jobs?  Amazing what 4 people can do with the right backing.

There may be a whole lot more to this story than is currently being publicized but in the mean time, local judges have shut down the operation pending some form of environmental study.  Amazing how everyone else gets "grandfathered" in when something like this comes up.

In the housing market, we continue to lead the country, in price declines.  North Kona is down year to date by almost 6% for single family residence prices and condos are down just over 9%.

Sellers are taking longer than normal to realize the changing landscape of real estate.  Due to the mortgage meltdown, there are fewer than ever buyers out there.  We have nearly 10 months supply of property for sale and yet sellers continue to hold out for top dollar.  While some homes and condos were worth more not so long ago, the declining market and huge inventory dictates lower prices.

Buyers are still holding out waiting for another interest rate reduction which is rumored to happen when the fed meets September 18th, if not before.  While they have already reduced the discount rate by 50 basis points, those in the know expect as much as another 50 or maybe 75 basis points coming off soon.

These same prognosticators expect a quarter point drop in the Federal Funds rate which will have a direct impact on mortgage rates.  With over 100 national lenders out of business since January, another set of reductions may be just what we need.