Kona Kohala Blog

Remember the kid in grammar school who always thought it was so funny to pass gas in class and then point his finger at some poor unsuspecting person?  I think that's what gave rise to the old saying, "A skunk always smells it's own hole first."

I've noticed recently that our president has the quickest finger in history as he whips it out to point at the auto industry, the insurance industry, the banking industry and most recently the oil industry.  Let's see, he's been in office for 16 months now and he's still not taking responsibility for anything that's going on.

Looking at just the oil spill, who is that issues the drilling permits or issues waivers for the permits?  The government.  Who is it that has passed all the safety legislation concerning oil discovery and recovery?  The government.  Who is it that's in charge of enforcing all the safety laws required of the energy industry?  The government.

The particular well that exploded and sank causing this great oil catastrophe had just passed a federal safety inspection not more than two weeks before the fire.  The waiver of the National Environmental Policy Act was also a government decision.  This had to be waived due to the onerous nature of the Act that if followed to the letter, would probably never allow any drilling because of the time required to meet all the necessary steps involved.

With all the government regulations and oversight, maybe BP had decided to wait for government intervention before going it on their own since that type of independent thinking is not highly regarded in the upper levels of government.  Whatever the case, the government and the finger pointing Mr. Obama are every bit as liable for the spill and the problem that caused the spill as BP.  Instead of pointing his finger and yelling, "He did it", Obama should be asking how do we take care of this as quickly as possible and how do we make sure it won't happen again.

Just because a couple people get food poisoning at a fast food restaurant doesn't mean we close them all and just because there was an oil spill due to negligence on the part of industry and the government doesn't mean we shut down all off shore drilling.  We fix what's wrong, that's what America's known for, and we move forward.

Whew, now that that's over with, let's talk real estate.  We're still waiting for a recovery.  In last week's newsletter we mentioned the newly coined phrase, "Frugality Fatigue."  This new phenomena will not go on long.  The same people who are feeling a little frisky right now and spending some money will retreat to their more conservative bent soon, putting money away and saving for a rainy day which is why they have money to spend today.

Expect property prices to continue downward, slowly, until we at least see a little light at the end of the foreclosure tunnel.  As long as the banks are relieving themselves of the huge shadow inventory I don't expect to see a true bottom in prices.  We're seeing the demand slow also as we run out of those who put money away for the rainy day.  There are still plenty of them out there and they will continue to watch from the sidelines, jumping in only when the best of deals are found.

Median price is no longer dropping at the 20% per annum rate we had been seeing and sales activity is no longer across the board.  Last month, Single Family Residence sales we down <10.71%> for the first time in a while after climbing for many months.  Condo median price in South Kohala actually moved up 4.84% last month, a first for price increases.

We're in the midst of change but not far enough along to know where it's going.  Maybe we'll know more this week as some interesting finance numbers come out.  More to be revealed.