The Kaʻū Calendar News Briefs, Hawaiʻi Island: Kaʻū News Briefs, Sunday, July 2, 2023

Sunday, July 02, 2023

Kaʻū News Briefs, Sunday, July 2, 2023

Sounds of Independence
The lone bagpipe player fills the air as the parade rolled through Nāʻālehu honoring Independence Day on Saturday, July 1.
See photos below and more in Monday's Kaʻū News Briefs. The next parade is July 4 in Volcano. Photo by Lee McIntosh

The iconic eagle, symbol of U.S. Independence.
Photo by June Domondon

EVERYONE CAN WALK AND RIDE DOWN THE STREET AND EVEN JOIN A PARADE. THE PROBLEM IS HOUSING, the focus of a UHERO REPORT. University of Hawai'i Economic Research Organization reported last week that "Residents of Hawai‘i face the highest housing costs in the nation. High housing costs lower the standard of living for residents and hinder the State’s ability to attract workers. Some households are forced to live in crowded conditions, some leave the state to find housing elsewhere, and some are forced to survive without housing at all."
The report gives an example of Ocean View as a place where the people who already live there cannot afford to buy houses. While the median annual household income in Hawai'i County is $68,399, ranking lowest in the state, Ocean View’s median household income is $25,402, ranking last place among 63 communities analyzed across the state. The report notes that OV has the highest unemployment rate in the state at 15.9 percent. It also lists Discovery Harbour median income at $54,474.
To inform discussions on the way forward for housing statewide, UHERO released the first edition of
its annual Hawai'i Housing Factbook to provide detailed housing data for the state, counties, and the 63local zip codes. It shows that median housing costs are 2.7 times the national level. Over the past year, the median price of a single-family home sold in Hawai‘i was $852,000 and the median condo price was $600,000. The last 30 years have brought incredible growth in local housing prices. Median single-family home and condominium prices have more than tripled since the mid-90s, reports UHERO, noting that the pandemic had a special effect on the cost of housing: "Over thepandemic, with mortgage interest rates falling below 3% and households in need of more space, home prices soared. Before the pandemic, the median single-family home price in the state was $650,000. Between 2019 and 2022, prices rose by 35%, before leveling off in 2023. Median condo prices saw a 30% pandemic increase, jumping from $453,000 in 2019 to $587,000 in 2022, and have since risen further to $600,000. Mortgage interest rates rose sharply in 2022, and have remained near 7%. While high mortgage rates have dampened demand and reduced transaction activity, median prices have not fallen significantly."

The Kahuku Unit and Friends of Hawai'i Volcanoes National Park paraded together. Photo by June Domondon

Nāʻālehu Hongwanji carries the banner. Photo by June Domondon

Kaʻū High & Pahala Elementary marches on. Photo by June Domondon

Kaʻū Baseball reaches all the Kaʻū communities.
Photo by June Domondon

Kaʻū Baseball trains keiki of all ages. Photo by June Domondon

The report calls Hawai'i Island an outlier, in home prices. It notes that median single-family home prices on Maui and Honolulu have hovered near the $1 million mark for the past year. Prices on Kaua‘i are comparable, with a median price near $900,000. Contrastingly, the median single-family home in Hawai‘i County sells for $400,000. Median condominium prices in Hawai‘i County ($550,000) actually exceed that of single-family homes, reported UHERO.
The data reported by UHERO for Hawai'i County having two of the three least expensive areas on the island. It stated that the median price at Discovery Harbour was $272,500 and Hawaiian Ocean View Estates was $307,500. Local realtors report recent sales and prices at Discovery Harbour much higher.
Lance Owens, who is involved in real estate on this island weighed in with UHERO, writing that the medium home price for Hawai'i Island in its report is "off by a staggering 25%." He wrote that the Hawai'i Island median home price June 1 2022 to May 31 2023 was $498,576.92 with 2,133 sales."You would have to go back to the year 2019 to find a median price that low. When I look at YTD as of today the median price for the big island is $508,108.33 and an average YTD price of $849,375.53, but I know we are talking median." UHERO replied that its numbers are based on the home price recorded in deeds. That includes homes being sold to relatives, friends and business partners for deep discounts.
UHERO also reports that "High condo prices indicate a lack of multifamily housing supply and an aging stock of single-family homes. At the zip code level, the differences are even more substantial. The North Shore of O‘ahu, as well as some neighborhoods on Kaua‘i rank among the most expensive areas. Kīlauea (zip code: 96754) on Kaua‘i had the highest median sales price over the past year, at $2.3 million, though only 16 properties transacted during that time. Contrastingly, the cheapest zip codes are all located in Hawai‘i County, where two zip codes have median sales prices under $300,000. The combination of high housing prices and high interest rates has drastically reduced housing affordability.
"The surge in mortgage interest rates over the past year has radically decreased housing affordability for buyers. The share of local households who can afford the median priced home has fallen dramatically. In the below figures, we consider a mortgage to be “affordable” if no more than 30% of the household’s income is devoted to mortgage payments on a standard 30-year mortgage. In 2012, households needed to earn 120% of the state’s median income to afford the mortgage on the median priced single-family home. In 2022, home buyers needed to earn nearly 180% of the state’s median income (or $150,000 per year) to afford the median home. While condo prices are lower, affordability has also decreased with condo buyers now needing to earn $100,000, or 120% of Hawai‘i’s median income, to afford the median condo. The collapse in affordability of homeownership has been driven by the rise in interest rates over the past year. Even before the spike in rates, housing was unaffordable compared to most US markets." See the entire report at https://uhero.hawaii.edu/the-hawaii-housing-factbook/.