This week I wanted to check back in with where the market is at right now.  I decided to do a little residential market update through the National Association of Realtors Database of properties. My thoughts were reassured and the database agreed with me in signifying that we are still very much in a seller’s market.  The first statistics that popped off of the page was *that properties transacted in the month of October were sold at an average of 97.7% of the listing price.  This statistic would agree with and back up what we are seeing now as we are continuing to see the price of homes rise month to month as they are listed in the same neighborhood.  Another statistic that I found to be rather powerful was that the average time for the property to be listed is roughly 59 DAYS!  59 days… that is two months, when broken down further that Is under 9 weeks that these homes are on the market.  

These properties are metaphorically flying off the  shelves.  Crazy!  But, does this mean that you should sell your property? Truth be told there is no one who can answer that question other than you yourself.  While yes you are going to be selling in this hot market, which to be honest has a large amount of cash buyers, you are also going to potentially be buying into the same market.  A great idea if you are thinking about downsizing or diversifying your property.  

If you recall back to one of the first blogs that I put out, the second blog to be exact, I reviewed the Hawaii Housing and Economic Report from the year 2022. In that report it was found that property on Hawaii Island, subject to area and neighborhood, appreciated by about 15% over a 5 year period.  Ultimately making your property in Hawaii a great way to grow wealth over a period of time, while also being presented by a vehicle that can provide cash flow to an individual or organization.  

An example of this appreciation: I recently spoke with a gentleman who bought a home in Ali’i Heights in 2017 for about $400,000.  Needless to say that home would be listed for about a million dollars now.. Maybe more!   

Another interesting statistic was that the total money volume of the market in Kona is $179,037,390.  The number isn’t what is interesting, but rather the fact that this number is 87% higher than the month of September.  The number of homes is actually relatively consistent (only an 18% increase from September to October).  To me this says that “higher dollar homes are on the market.  This trend has actually been consistent through all of 2023.

Big takeaways? One thing that popped into my mind was the timeframe in which properties are leaving the market.  In turn making every day and hour matter.  Get yourself some representation.  If properties are only lasting on the market for 59 days then by the time the property hits the larger self-service real estate platforms like zillow and redfin then you potentially have lost some days to get in and look at the home.  If you lose 14 days because you are not working with an agent who has real time access to the property then there is a good possibility that there may already be an offer submitted on the property!

Welcome back everybody to the weekly Island Land Blog.  I wanted to take this week to do a couple things: 1) to inform anyone who didn't know that the model home at the Royal Ali’i Subdivision is now open! (No physical address yet, but head about 1 mile south of the Ali’i Gardens Marketplace, so get yourself some poke then come on by the house and see us! 2) wish everyone out there a Happy Thanksgiving!!

To kick things off I wanted to review the first week I have been in the open house at the model home.  I have been so blessed to meet all the great and interesting folks who have given me their time to stop by and learn about the project.  I am glad to report that there have been a lot of compliments given on the project.  The most common compliment being the spacious rooms.  The home does boast very large rooms, each of the three bedrooms in the model home are more than capable of having king sized beds in the room, without you having to do an awkward shimmy/crab walk between the bed and the wall just so that you are able to get in and out of the bed.  There have also been a lot of compliments over the size of the lots.  The lots are between about 6,000-9,000 square feet.  This is perfect for the owner to have a manageable sized garden or in some cases a nice 12 x 20 foot pool.  

There has really only been one complaint received over the project and that has been, “why did I not know about this project earlier.”  Clearly they didn't read the Island Land Company blog…., but one of my personal favorite qualities about the project is that it has been kept under wraps.  Not for the reason of keeping it to ourselves or making the project exclusive, but more so I like the idea of this community being made up of folks who did their due diligence to find one of the best new build gems on the island this year!  Which really is true, based on recent sales in the area, on the mauka side of Ali’i Drive, this price/ square foot on a new build is an AMAZING value to the buyers within the project. Another positive aspect of the project is the ability to be a “founding member” within the subdivision.  To me the idea of having a hand in being  1/19th  of what will be a legacy subdivision on Ali’i Drive for many years to come is very cool.  As a buyer, you get a chance to pick a plan, design property aspects, and build what will be on that lot for many years to come.  Whether you continue to live there or not, your choices and any possible improvements that you choose to make to the grounds will be there on that lot for generations to come.  How COOL right?!

With all that being said, I would also be remiss if I didn't wish you all a very happy Thanksgiving.  Be sure to take some time to be grateful for all that we have, and all that we have been given the ability and chance to do. Enjoy the time with your family, even the family members you only see only on the holidays.  

Since I was a little kid my family has read a poem before cutting into the turkey and beginning our feast.  The poem was published in the Omaha World Herald in the 70’s, and I wanted to share it with all of you because as I have gotten older I am able to appreciate this poem more and more.

“Things To Be Thankful For”

Be thankful for the clothes that fit a little too snug, because it means you have enough to eat.

Be thankful for the mess that you clean up after a party, because it means you have been surrounded by friends.

Be thankful for the taxes you pay, because it means you’re employed.

Be thankful that your lawn needs mowing and your windows need fixing, because it means you have a home.

Be thankful for the heating (A/C here in Hawaii) bill because it means you are warm (cool in Hawaii).

Be thankful for the laundry, because it means that you have clothes to wear.

Be thankful for the space you find at the far end of the parking lot, because it means you can walk.

Be thankful for the woman who sings off-key behind you in church, because it means you can hear.  

Be thankful people complain about the government, because it means we have freedom of speech.

Be thankful for the alarm that goes off in the early-morning hours, because it means you’re alive.”

-Courtesy of The Omaha World Herald

 Written by Nate Konecky R-S

I was talking the other day with a friend of mine about real estate, shocker.  More specifically over the property management side of real estate. I think it plays such a huge role here in Hawaii.  In lieu of the recent Transient Accommodations Proposal I really have started to wonder what goes into an individual's decision to bring on a property manager.  What are the pros and cons of having a property manager? What a better time than blog tuesday to go deeper into this? Let's dive in!

In the discussion, my friend told me what would be considered to be sort of a nightmare for a property owner.  She told me a story about a property manager that was used for a property that had high traffic Short Term Vacation Rentals (STVR), paid a salary, and really put little to no work in managing the property at hand.  The property manager was oblivious to certain needs that the property had, such as check in’s, check out’s, and cleaning schedules. All of which are VERY important for a property manager to have a knowledge of. Now this case scenario is a bit of an extreme on the poorly managed side.  However, I also know of some other property managers who have gone above and beyond for their clients, even going to lengths to fix or clean the property until past midnight for a quick STVR turn around.

What is the difference between these two scenarios? I think the biggest difference is intentionality and care put simply.  As with many other job candidates, not all property managers are created equally.  It has been my experience that a lot of the downsides of having a property manager go hand in hand with having a property manager who does not take their job as seriously as the property owner would. It really is as simple as that.  A great rule of thumb as a property manager is to treat the property as if it were their very own.  This alleviates a lot of the possible contention that could grow between parties involved with a poorly managed property.  

What are some signs of a poorly managed property? They usually work from the bottom up.  For example, if you are an owner who has put a property manager in place on your property, yet you still are dealing with a lot of the cleaning, maintenance, and guest issues, then this is usually a tell tale sign that your property manager is under performing.  These are below the line issues for homeowners with property managers.  These issues quite literally are the property manager’s job description.  As a homeowner, pay attention to who you hear from about the property most, while this seems very elementary, you would be surprised by how many folks don’t recognize this.  

On the other side of the coin, what does a good property manager look like? In the simplest form, the less you hear about your home the better, as crazy as that sounds it actually is very true. You should receive a lot of high reviews from guests, but ultimately you almost forget about your asset entirely.  It is also my opinion that there are many more good property managers than bad ones, especially of the folks I know here on Big Island. A great property manager can be a blessing, and when you have one, as I said before, you may forget about your property and its rentals, but the checks keep on clearing and going straight into the bank account. Everyone is happy.  

When considering property management from either side as either an owner or manager, I think the golden rule of “treat THE PROPERTY as you would treat yours” should prevail.  If you’re an owner looking for a manager and you get the feeling that this person does not ultimately care about my home but rather your business, proceed with caution.  If you meet with a property manager who notices the little things that they would like to change/help with such as the vases for the flowers having murky and cloudy water in them. Small details are what tell you whether or not this person values your property as a whole and is not just in the game to get your business.  

 Written by Nate Konecky R-S

Welcome back to this week's blog everyone.  Hopefully you had some time to take a look for yourself at the the proposed 5th Draft in regards to the new short term rentals released by the Hawaii County Planning Department.  If not, I strongly encourage you to take a look for yourself.  My hope for this review process is to highlight some key points that I found to be either significant for property owners, or significant changes from the current Short Term Vacation Rental (STVR) code regulations as currently exist.  

To begin, the first question with the new Transient Accommodation Rental (TAR) proposition for unhosted rentals is that we must figure out what is an “unhosted rental” is by their definition.  To paraphrase, an unhosted rental is one in which there is no host or operator physically on the property or staying with the guests.  

For example, if you own a 2 bed/ 2 bath condo, and were to meet the guests at the door, exchange keys with them, give them a layout of the building, and any major must know information over the rules and regulations of that building.  That would be a prime example of an unhosted STVR.  

A Huge talking point here comes from Section 25-4-16-17 from the proposition. This section goes over ‘Transient Accommodation Rental Operation Standards’.  These standards include, but are not limited to: 

• owner /operator of unhosted TAR must respond to contact within 1 hour of first attempt to reach them

• owner/operator of unhosted TAR must be able to physically be available at the property in situations where this may be necessary or required

• Gathering sizes limited to double the number of registered guests.  

• Overnight accommodations limited by the amount of off street parking per the TAR permit.

• Quiet hours of 8PM-7AM.

In the case that the director of TAR deems the owner/operator to be at fault in any of these terms, this will result in fines that themselves increase in amount per incident: $2,500, $5,000, and $10,000 respectively.  I have expressed my personal request for more governance of unhosted short term rentals, and these regulations are not necessarily out of line.  Some of these fines do seem a touch excessive.  I do understand that a major part of property rights and ownership includes the peaceful enjoyment of said property.  But on the other hand, I am a supporter of small business, and could see how one rowdy group of guests could cause an issue coming from the mainland and not taking the quiet hours seriously, thus causing a massive fine for the rental owner/operator.  I think there would need to be more specifications for appeals and risk mitigation for the property owner.  For further info on Disciplinary Actions set out by Draft 5 of the Transient Accommodation Rental Proposition see section 25-4-16.20 through 25-4-16.25.

Where can you have an unhosted TAR?

Great question that is also outlined in the proposition, unhosted TAR’s would be permitted in: Resort (V), General Commercial (CG), Neighborhood Commercial (CN), Downtown Hilo Commercial (CDH), Residential-Multiple (RM), and residential districts situated in general plan resort and resort node areas.  Nonconforming use certificates will be available for properties outside of these areas, but that already possess a nonconforming use certificate.  

Fees for Unhosted TAR:

Initial Registration: $1,000

Annual Registration Renewal: $250

Nonconforming use certificate: $500

Annual Nonconforming use certificate renewal: $500 

What does the process for registering look like? 

The OWNER must submit a registration application to the planning department.  This application must include: property tax map key number and address, name and contact info for the owner and/or operator (+this individuals real estate licensure if applicable), site drawing with structures with the requited proper amount of off street parking, submittal of floor plans showing the location of rooms for rent and all emergency exits. 

If you own or operate a STVR currently a very important part to read over is section 25-4-16.6.  This section discusses when to register for the new permit.  It also explicitly says that “existing owner-hosted and operator-hosted TAR in operation on or before [a TBD date]... shall be allowed to continue to operate until such time as their application is approved or denied by the planning department… While existing unhosted TAR that were previously registered as an STVR shall not be required to register (referring to initial registration), they will be required to renew their registration annually…”

Final thoughts and takeaways

Prepare yourself, and if you made it this far consider yourself lucky… or crazy… or bored.  No matter where you find yourself in that spectrum you get to read my thoughts on this half of the 5th Draft.  The biggest question that I come away with from this section is: “Is this proposed change to the short term rental side of property/property development the best possible way to help with the current housing crisis?”  While these proposed changes would help to decrease the market value of homes, will that necessarily help the economy here on our island?  There are a lot more businesses that either stem in with the short term rental market.  Think  of the cleaning services that make their business out of cleaning and turning around STVR’s.  The landscaping companies that make their ends meet because of these short term rentals. Are the homes that would be freed up/put back on the market as a result of the passing of this bill necessarily the types of homes that are needed in the market right now?  The market needs affordable first time and mid-level housing, and I have an educated hunch that a lot of the homes that would come up because of this newly proposed change would be above the price range of the need.  Now I may be wrong, but I think it is vital that we as a community look at the problem, more affordable housing, and compare it to possible solutions.  Would it be better to permit more building projects with single-family homes?  I can’t and shouldn’t answer this myself, but the message is the same as last time.  Let's get out and talk about this issue. If you think it does not involve you, you are wrong.  In some way shape or form this issue involves all of us.  

Written by Nate Konecky R-S

If you can recall back to August, we went over the 4th draft of the new proposed zoning legislation that was put out by the in regards to the current short term vacation rental policy.  As a preface, I encourage you strongly to go and read the proposed drafts yourself.  However, if you do not want to take the time to do that, the coming two weeks are going to be my personal review of the 5th draft.  This review will be my breakdown of how I see this proposed draft, as well as some of my thoughts and opinions on this.  

As it was in draft 4, the county is still planning to completely scratch the previously existing “Short Term Vacation Rental’ (STVR) policy that exists in the zoning code. They plan on implementing the new “Transient Accomodation Rentals” (TAR) in place.  As I stated in the last review of their 4th draft of this proposition, I do not love that idea, but given the benefit of the doubt that the newer draft would provide more, I was willing to read forward into Draft 5.  

In this week's blog I plan to break down Draft 5’s proposed plan for the hosted TAR’s.  The 5th draft is comprised of two categories of classifications for short term rentals.  They have hosted and un-hosted vacation rentals.  The difference is as you can conclude from the name, whether or not a host is present in the property.  The hosted TAR’s are then subdivided into two categories themselves, operator-hosted and owner-hosted.  Difference here being who the individual who is present on the property as compared to whose name is on the deed (who has principal ownership on the property). There is some commonality between the two, whereas in order for the rental to be considered to be a “hosted” TAR the property must be their primary residence.  

Break Down: 

The Owner-Hosted rentals actually provide a lot of variability.  A couple of the initial pros that stood out to me: they may exist in any zoning district, they can be any single-family dwelling, and there are nonconforming use certificates that are available, when proof of operation in the past is presented by the owner,  for ohana units or guest houses that have been hosted vacation rentals. The nonconforming use certificates are transferable from seller to buyer of the property, if the buyer intends to use the property as a short term rental. 

Fees:

Initial Registration $500

Annual Renewal: $100

Nonconforming Use Certificate: $250

Nonconforming Use Certificate Annual Renewal: $250

I did not think that this section was too bad! Really it is very comparable to what currently is in place with the rules and regulations of the STVR’s.  However, an ongoing annoyance that I have found repeatedly are the fees. Essentially if you apply for a Nonconforming Use Certificate you are going to be paying $250 annually, which I find a little egregious when put on top of the renewal fee.  There is truly no reason in my opinion for the owner to be double charged because of what could be seen in my opinion as an existing condition that comes along with their property and their rights to use the property as they please.

Now onto the Operator-Hosted Transient Accommodation Rentals.  Let me again restate that for a property to fall under this designation the operator must live in a single-family residence themselves.  This designation would apply well to condotels or something of that nature.  To quote the draft; “when they transient accommodation rental is subordinate and clearly or customarily incidental to the use as the residence and permanent address of the operator…”.

Break Down:

The operator-hosted TAR would only be permitted in Resort (V), General Commercial (CG), Neighborhood Commercial (CN), Resort Commercial (CV), Downtown Hilo Commercial (CDH), and Residential-Multiple (RM) districts.  

On the positive side: the nonconforming use certificate is also available for “grandfathering in” of already existing units that under the new proposed regulations would not qualify as TAR eligible.    

Fees: 

Initial Registration $750

Annual Renewal: $150

Nonconforming Use Certificate: $375

Nonconforming Use Certificate Annual Renewal: $375

Here is where I personally question where to begin to draw the line for personal property rights.  I can see how a property owner could feel slighted by the restrictions as well as the increase in fees annually with the operator-hosted rental.  With that being said I totally understand the increase in price when the operator-hosted TAR would be a condo or some sort of property with multiple units.  As the gross number goes up, so too should the fees.  From an investment property stance however this could potentially hurt a lot of people who are currently in the business of owning or operating these operator-hosted TAR.  

I am not going to get too deep into the 5th draft, and next week I will go over the un-hosted side of the proposition.  Again, I do encourage you to do your own home work, read Draft 5 of the Transient Accomodation Rental proposal.  Trust me, I get it.  There are a lot of ways to look at it.  On one side of the coin there are investors and property managers who rely on this market to make a living.  Then on the other side there are people out there unsure if they will ever be able to buy a home because of the state of the market.  Is the TAR reform the correct fix? I have my opinions and I advise you to create yours and talk about it.  Get out in the community with your neighbors and friends to see what they think.  This is something that could potentially have a huge impact on our entire island from the top to the bottom.  With tourism being such a large part of the overall economy that also means that where these folks are staying will have a massive impact on the businesses around the island as well.  If the amount of Airbnb’s and VRBO’s in town diminishes are visitors going to be more likely to stay entirely on the resorts? Will that harm places like downtown Kona and the shops like the ones along the Kona Inn Shopping Village? 

There has been a lot of action in Kona as of late it seems to me.  As the cruise ships process on their route from north to south it has really spiked the activity for a lot of local eateries and tourist destinations.  I work a few evenings a week at Huggo’s, and have noticed the uptick in patrons coming to visit us.  It makes for the 5 hour shift to just fly right on by.  In addition to the influx of cruise ships, there are also a lot of cultural and cross cultural events going on in Kona. 

If you were not aware, the women’s Ironman World Championships was hosted on our beautiful island two weeks ago.  I also must say that I personally feel that this year was one of the best all around in regards to my enjoyment of the event. I remember last year. Having both the men and women's championships in town seemed almost unbearable at times with the traffic, crowds, and lines for everything and everywhere.  There seemed to be a massive overpopulation in town, and potentially I think it  hurt a lot of the local businesses more than it helped.  

After talking to some business owners locally they also felt that this year was much more manageable for them as well.  For example one cafe owner had to close his store front last year because his space quite literally was not large enough to cater to the masses that came in for the Ironman.  He then restricted his menu down to about 3 items and set up a tent in his outdoor seating area.  Not necessarily that this hurt his business by gross numbers comparison, but rather there is quite an extreme opportunity cost.  For example, if all he could serve in his roadside set up was hamburgers that he net profited $2 on. Then imagine what he could have done with the same number of customers who would order the ever so popular panini that he can net profit about $5 on.  Also, with just half the athletes competing this year, I thought that Kona was able to show her beautiful self off more in the massive influx of visitors from all over the world.  

There are also a couple of other events coming up.  The biggest of these being the Kona Coffee Culture Festival that kicks off at the beginning of November.  That is a week that I would encourage you to go and experience, even if it is just for a cup of coffee and a look around.  I was negligent to the intensity of the world of coffee until I experienced this festival last year.  There are folks who like coffee for the gastrointestinal benefits and caffeine contents (this is me), and then there are people who LOVE coffee and everything about it (this is the people who fly in for this festival).  They seemingly eat, sleep, and breathe coffee (which sounds like a bit of a health hazard if you ask me, but who am I to judge.)  So head on out to see what the Kona Coffee Festival is all about.  You may be surprised by the rich history that Coffee has on this rock in the middle of the Pacific that so many of us call home.  

With these international gatherings, another important side note to remember is that people come from all over the world for these events.  It is not always the case that they have the same social practices or regularities that we are accustomed to.  A great example was from Ironman.  In many European countries it is custom that bicycles share the same road space with cars, they do not have bike lanes at times.  So you may have noticed a more significant amount of bikes on the road.  Yes, this can cause a lot of frustration, I feel it too, don't worry.  That person who was riding in the middle of the road was not being a “jerk” however.  They were just doing what was accustomed to them.  Practice your aloha, and take a few deep breaths.  And hey, try to enjoy some of these events and the beauty that lies within them.  For me, it is the determination I could see on those ladies' faces as they fought to the finish line.  For the Kona Coffee Festival I think of the coffee farmer who is out there busting his back trying to make ends meet with this year's crop.  This festival, while more flashy than he may be, is most likely an event that provides him with great reassurance and pride for what he puts all of his effort into. 

How does this tie into real estate? You may have never thought I would get there, but finally here we are.  This is a prime example of opening your home up to others.  Hospitality is at the root of the aloha spirit, and the headquarters for that hospitality is your home.  I don’t mean you should just invite all of these visitors into your literal home, but be open to them visiting us here on the island.  Be kind, patient, and share a smile with them.  A smile means the same thing no matter what language you speak. 

Ahhhhh it really is an age old question, “with so many choices out there how can I be sure I am making the right one?”  This question has honestly become an entire marketing campaign for a major insurance company, as well as many other conglomerate businesses.  (I am sure you can figure out which ones I am talking about.)  For good reason this question is the root of their marketing campaign because of the truth that it bears.  The feeling is so relatable in so many different facets of life.  Really, think of your entire day in terms of the choices we have to make.  You wake up, hit the snooze or get up and at em. You get vertical and head to get some coffee.  More choices, do I get the seasonal pumpkin spice latte OR do I stick with my old reliable black americano that I drink everyday?  Pumpkin spice it is, why not enjoy the season.  Here you are about two hours into your day and you have had to make up your mind about 5 times, there are plenty more choices that are beckoning to be answered later on as well!

A funny example from my childhood was at the supermarket, I wouldn’t dare go to the grocery store to buy fruit that was not properly self inspected.  My mother was a notorious melon knocker, and in turn I now by association am a melon knocker.  She would pick every melon on the pallet up, raise the melon to her right ear, and then knock on it with her left hand as if she were trick or treating…. I must admit this was very embarrassing for me as a child in the supermarket with my mother, but guess who is a melon knocker now…. THIS GUY. (maybe next weeks blog will be an analysis on the theory of nature v. nurture) 

Point being is we are constantly surrounded by choices and a “field” of options.  It is for this reason I think the concept of picking the perfect pumpkin out of the pumpkin patch is so fitting.  I mean there is so much that goes into the perfect pumpkin. Color, shape, firmness, size, age….. The list goes on an on.

One of those options usually is better than all the others.  The same principle of superiority holds true across the spectrum of where these decisions exist, both inside and outside of the pumpkin patch..  I have come to find that these principles hold true when picking out your real estate professional as well.  There are pros and cons to all firms, agents, and scenarios but what I want to do is to try and arm you with the information so that when the time comes, you can choose what/who is right for you.  

You know that little feeling you get inside of yourself deep down, call it instinct, intuition, or plainly just your gut.  That feeling is what I recommend that you listen to.  With that being said, the firm and person that you choose should be there to educate you.  I am not sure what you have been told or experienced in the past, but the real estate professional is there to coach you though.  Giving you options and laying out all of the possible outcomes to the decision that YOU get to make.  Notice I said that the decision is yours to make.  The professional tasked with helping you should never tell you what to do, only what you could do. Major difference there!  

On the other side of the coin any real estate professional worth their salt should CARE about more than their commission they are set to make off of this deal. A great quote I saw in a class I attended the other day went: 

“They (clients) do not care what you know, until they know that you care.”  

How TRUE! The agent, when under a representation contract,  is required to “act in the best interest of the client”. I make the mistake of assuming the best in people at times and that can come back to bite me.  The Code of Ethics does not say that they are required to care about the “success” of their client. How do you know the agent cares?  Same way you know that your friends and family cares of course!

Also I am a firm believer that “success” should be discussed in the very beginning of the representation agreement, that way agent and client are both on the same page for what the ultimate goal is with the property transaction. 

Do your best to go into a transaction with an agent who care about the success of your transaction.  Also note that minor blunders could be a result of poor communication, these minor mistakes do not always mean that your agent does not care, it could be quite the opposite.  Potentially they care so much that they are applying pressure to the situation, in turn making it bubble over.  Best way to fix the agents over application of pressure? As the message always is, just communicate!

In the mainland it is time to crank up your heating system.  Here on the island it is time to crack a window at night and cozy up with a blanket.  There is a certain chill that is in the air and with that the thought that the holidays are coming up very quickly.  Do not worry, I will not be going straight to Christmas ALREADY.  I mean for pete's sake people, let's try to at least get to halloween then let thanksgiving have its time.  The holiday season does have me reminiscing on what makes them so special.  What really makes them so special for so many? I came to the conclusion that it is the ritual. The  holidays are a people, a feeling, and last but not least a place.  I remember growing up, grandma's house was the constant location for all of the goings on.  I grew up with a pretty large family (my dad being the oldest of 10), and every holiday that we had on my dads side had its own itinerary and schedule.  

That was a major part of what made all the holidays special, but a huge part of each and every memory is my grandma's house.  In my mind's eye, I see her huge dining room, with the Hogwarts-esk kitchen table.  The entire room was one big table with galley seating all the way around it.  A most memorable part of eating at her table was doing your best to not get a seat on the inside, because if we were sandwiched in and you wanted to get out for seconds or even to use the restroom you were at the mercy of whoever sat on the outside.  They were the “keepers of the gate”.. 

This story and memory may not make you smile like it does to me, but I am sure you have a rolodex of your own memories involving the places from your childhood and holiday memories.  A weird tick that I have developed since becoming a real estate professional is thinking about structures and buildings longer than most probably do.  This is something that I am just now taking note of.  Buildings, properties, zoning, and planning are things that you may not think about more than about 5 times your entire life.  To me this is what I find running through my mind every day.  This also makes me realize the emotional side of a home.  A house is so much more than a monthly payment, a place for shelter, or an asset to most people.  I encourage you, next time you drive by a subdivision and see the toys in the front yard.  Or the couple tending to a garden, think about what those places mean to the  people who live in those homes.  Those homes that are filled with family photos, memorabilia, and possibly subpar art hung up on the refrigerator. 

In the same token selling and buying a home is more than just a financial decision for most getting into real estate.  It is the turning of a page or quite possibly the end of one chapter and the start of another.  One of the first things that Ed, Principal Broker of the Island Land Company Inc., told me was that there is always a deeper emotional decision for buyers and sellers to make about their home.  He instructed me to never push on this part of a sale, but to be aware of it always.  The emotional side of a transaction is none of the agent's business, the agent is there to cater facts and consultation when asked only.  These heavy emotions that arise from the real estate transaction are for the client to settle out themselves.

If you have ever had your emotions pushed on when you were financially making a decision how did that make you feel? If the decision was the right one to make you usually will hardly notice, but more evident in your memory are the instances where your emotions were used to get your pocket book open.  That usually makes you feel a type of way.  You feel betrayed, pissed off, and empty all at the same time.  This is never how you should feel before, during, or after a real estate transaction. 

My point of this week's blog is not to conjure up regret or bitterness towards others in the past, but rather to have us all appreciate the places that make our holiday season what it is.  Whether you find yourself bobbing for apples in middle America, or catching waves as high surf season kicks back up.  Be appreciative for what you have and where you are because we truly never know who out there would love to be in that spot.  Mahalo as always, and by the way be sure to enjoy halloween AND thanksgiving.  I promise you we will get plenty of time before christmas to start fantasizing about it!

As you all may or may not know last week we went over a little “Q3 + a month” market update.  That in turn, made me personally realize that we are now in the 4th quarter of the year! Wow, it really has flown by.  With the passing of time it is important for us all to look back on our year thus far, and realize how much we have been able to accomplish. Also this is a great time to check in on the progress towards our goals that we set for ourselves on January 1r. How about those goals that we had from the beginning of the year?

I have found myself making steady progress on most of my goals, which leads me to see how cool it is to set out a plan in January, act on it incrementally every day, and then look back on the progress that I have made over the past 9 months.  

At the Island Land Company a major goal of ours was the opening of the open house at the Royal Ali’i Planned Urban Subdivision (PUD).  The Royal Ali’i is a beautiful gated community with 19 homes, that is hoping to be fully finished within the next 3 years.  The lots range in size with the smaller lots being roughly about 5,900 sq. ft. and the largest lot being 9,654 sq. ft..  Depending on the lot size, there are also two different sized homes available to build. The smaller home being a 3 bed 3 ½ bath home.  The larger lots allow for a larger home consequently with the possibility of having a 4 bed 4 ½ bath, (1 bed and 1 bath are detached in an additional dwelling unit or “ohana” style).  I am biased in thinking that this new exclusive community, with a very low HOA fee (roughly $90/month), is one of if not the best newly built divisions in Kona.  

Some of my favorite features would have to be the prime location.  The subdivision is located directly on Ali’i drive, but not too proximal to all of the craziness that ensues with being in down town Kailua-Kona.  Being on Ali’i Drive you are within walking distance to great food and entertainment, but removed enough so that a lot of the disturbances to your front door step.  Another great feature to the community as a whole is the size of the community.  Because the community is more secluded, all members of the community will be given a voice and a say in what goes on within the subdivision.  There will be no ruling body that imposes rules without a fair chance to explain or express interests that differ.  

As for the homes themselves in the subdivision, they were fabricated and built by Larry Smith of Larry R. Smith Construction INC.  Larry’s company has been a reputable builder in Kona for over 33 years. He has built a variety of single family homes ranging from luxurious estates to single family project style homes.  No matter the purpose of his builds his reputation of using the finest of materials and taking every precaution ensures the best possible built home.  I must say for myself that the proof of this is literally in house.  The house that he has built in this case 😉. 

I personally love the current floor plans for the single level homes in the Royal Ali’i Subdivision.  There is some freedom in the layout of the interior of the home for the potential buyer however.  The baseline for the 3 bed 3 ½ bath is an open concept kitchen with a large island sink and counter top leading into a dining/ living area.  (If you can’t envision this based on my explanation you may just have to come see for yourself!)  This plan also boasts a private bathroom attached to every bedroom in the home, this is not the case in most homes on the Big Island.  There is then a shared powder room that is adjacent to the kitchen.  

All of the homes within the subdivision that construction has started on have been built using 2x6 in. boards, rather than the industry standard conventional 2x4 in. boards.  This provides two things; 1) greater stability and 2) more insulation and coverage from the Hawaiian sun.  The homes are also all equipped with Techshield Radiant Barrier Sheathing.  This allows for insulation and protection from the full spectrum of radiation as opposed to just visible and ultraviolet rays. This sheathing when mixed with the 2x6 framing makes for a cooler, more comfortable home, even during the hottest parts of the day. If you are familiar with Kona coast living, then you know that it does get pretty warm everyday from about noon until sunset, no matter the season. But to my pleasant surprise, these homes seemed very temperate even with no centralized air.  

This has been a huge project for Ed and the rest of the team and we are excited and happy to have the Royal Ali’i dream and vision finally start to come to life.  Do us a favor and stop by. Come see one of the newest and best subdivisions in Kona.

Think of this as your one month into the 3rd Quarter market update from the Island Land Company.  The last couple of blogs have been a bit more personal, but today I plan to stick to giving you all the facts and numbers of the current market today. The hottest topic of them all? You guessed it, the seemingly ever increasing mortgage  interest rates.  And yes, they are continuing to climb.  As these rates continue to grow and the market is starting to bubble. The market has been put at a bit of a standstill.  Buyers are falling into two categories, some are holding their water while others are jumping in with anticipation of rates dropping and refinancing at a later time.  I am not to say either strategy is right or wrong, as we all know, what ever you were to decide, you are often times seen as an idiot up until whatever it is that you decided to do works or turns out for the best. 

The proof of the bubble and stagnation lies within the relation between bonds/stocks and the mortgage rates set by the Fedral Reserve (FED), according to Morgagenewsdaily.com.  Last Friday ay the gain on bonds was significant enough to elicit a historically relational drop in interest rates, however interest rates did not drop. Why is this? 

There was some speculation, and two theories emerged out there that I personally think would be the most ideal reason for the unusual lack of correlation.  

The first theory is that the lending institutions looked into a report that is released 8 times per year by members of the board at the FED.  When looking at the report from the September meeting held by the members, the meeting in September left inclinations that the members anticipated the Federal Funds Rates (an instrument put into place to try and defend against rising interest rates) to drop more significantly by the end of 2024, in turn the market was influenced as such, beings that the interest rates remained the same in order to try and establish a correction against the rising inflation rate.  So while the markets saw a boost, it was short lived, or shorter lived than experts would have liked because of the unmoving interest rates.  

This bump was felt and seen by the stocks and bonds markets, with a boost in prices to the S&P, but the 10 year trajectory for the S&P is still predicted to decline as inflation is predicted to rise.  The day that this report is published is known as “Fed Day” in the mortgage and stock market spheres.  

The second theory is that there is a reverse effect coming from the buyers standing still on their decisions to go in for a loan. This second theory is saying that the buyer is putting pressure on the Fed and the lending institutions by not buying and holding still as long as possible, then on the opposite side, the Fed is playing “hard ball” while maintaining the current interest rates due to the stress being applied to the market via the looming inflation rates. I personally lean more toward the camp of the first theory, with “Fed Day” being the primary mover of the needle.  

On another note, at this current point in time you could also say that there is a record setting amount of pressure being put onto lending institutions as they have a job to do as well.  Let us keep in mind that a loan officer’s job is to lend money, take a % of that as gain, and then rinse and repeat.  This has become difficult to do however if rinsing and repeating is not happening because no one is coming in for loans.  

Lenders are not all “sharks” who want to bankrupt you, take your money, and property.  At the same time, a great line I heard at a conference I attended was that “not all lenders are created equally.”  This holds true in my opinion, but I do feel for those who work at these lending institutions as their jobs are being put into jeopardy due to the current condition of the market.