December 2016 Royal Kahana Update

Yes Virginia, he does make it to all the Islands

Mele Kalikimaka & Hau'oli Makahiki Hou

Merry Christmas & Happy New Year Fellow Royal Kahana Owners

LOCAL MAUI NEWS

Snowmans family at sea beach in santa hats. New years and christmas holiday in hot countries concept.

I'm probably dating myself, but do you remember the old TV commercial with the little Hawaiian girl dancing the hula and in the background was the jingle ... "C & H. The pure cane sugar from Hawaii...". Well, as of this Friday the 36,000-acre of Hawaiian Commercial and Sugar Co. plantation on Maui will close ... ending an era of the sugar industry in Hawaii. Soon, 4,000 of those acres will be used for a major expansion of cattle ranching. Will this closure be reason for concern to Hawaii's economy? Apparently not. Carl Bonham of the University of Hawaii Economic Research Organization (UHERO) says the state's economy is expected to perform well due to tourism, low unemployment and construction.

Swaying palm trees, laid back lifestyle ... probably not associated with high-speed internet. Wrong. Hawaii is in the top 10 states for percentage of households with wire and wireless broadband access at speeds in excess of 25 megabits per second. In fact, last year Hawaiian Telcom launched a fiber network with internet speeds of 1,000 megabits per second. Along those lines, you might not think of Maui restaurants making America's best list. But then you'd be wrong again. Mama's Fish House was the only Hawaii restaurant to make this year's OpenTable list of America's best. And unless you're in the military, that's probably not where your mind goes to when thinking about Hawaii. Well, because Hawaii plays such a vital role in the Indo-Asia-Pacific region, as part of the National Defense Authorization Act Hawaii's military installations will receive close to $300 million in military construction funds next year.

CURRENT MARKET ANALYSIS

Homeownership will be in the spotlight next year in Washington as lawmakers in the new Congress look at federal taxes and what to do about the two secondary mortgage market companies, Fannie Mae and Freddie Mac. The House could pass legislation that would radically change how Fannie and Freddie operate as part of reforms to take them out from under federal conservatorship. Radical change could result in an acceleration of interest rate hikes and a reduction in home values, which would be a blow to the economy. So instead, a rather modest change is expected.

Nationally, more homeowners are gaining equity and climbing out of negative territory. According to CoreLogic, 93.7% of all mortgaged properties have more money invested in them than their estimated market value. In fact home equity has grown 10.8% in the third quarter compared to a year ago.

Here on Maui, the number of single-family homes and condominiums sold last month rose by double digits when compared to November of last year. There were 91 homes sold compared with 72 in November 2015 - a 26.4% increase. A total of 111 condos were sold, up from 74.

The good news continued with the median selling price of a home at $635,000, up 15.4% from $550,000 from a year ago. Condominium median sale prices went in the opposite direction - dropping 20% to $380,000 from $475,000 in November 2015.

Let's take a look at The Royal Kahana:

Status	Unit	Bd	Ba	List $	LT	Sold $	Close
Active	405	0	1	215,000	LH
Active	203	0	1	275,000
Active	105	0	1	279,000
Active	204	0	1	280,000
Active	119	0	1	299,000
Active	605	0	1	310,000
Active	619	0	1	345,000
Active	1217	0	1	364,500
Active	315	1	1	467,000
Active	115	1	1	468,000
Active	514	1	1	479,000
Active	108	1	1	485,000
Active	314	1	1	499,000
Active	807	1	1	527,000
Active	201	2	2	473,000
Active	501	2	2	499,000
Active	920	2	2	524,500
Active	720	2	2	569,500
Active	1001	2	2	615,000
Active	311	2	2.5	995,000


Sold	104	0	1	322,000		305,000	8/2/2016
Sold	916	0	1	328,000		310,000	12/2/2016
Sold	616	0	1	325,000		315,000	11/14/2016
Sold	703	0	1	340,000		300,000	2/26/2016
Sold	413	1	1	519,000		500,000	9/16/2016
Sold	513	1	1	549,000		518,000	4/27/2016
Sold	201	2	2	399,000		399,000	2/16/2016
Sold	220	2	2	498,000		498,000	3/11/2016

Figures from Realtors Association of Maui

TOURISM

The Hawaii Tourism Authority is partnering with the Los Angeles Clippers to promote travel to the Islands and bring the NBA team to Honolulu for its 2017 training camp. The partnership will include advertising within the Staples Center in Los Angeles, combining broadcast and online exposure with in-game promotions.

The figures are in and visitor arrivals set a new record in October, increasing 4.3% to set a new record of 717,486 for the month with visitor spending jumping 7% to $1.2 billion, surpassing the year-ago month. Since summer began, Hawaii has recorded 5 straight months of year-over-year increases in visitor spending - which in turn strengthens the tax revenue base. Hawaii's tourism industry has produced $1.37 billion in state tax revenue through October ... an increase of $52 million over last year. Maui saw a 4.2% increase in visitors, and a 9.6% increase to $3.7 billion in the first 10 months. As to how the visitors arrived ... there was an increase of 4% in October via airlines, and 16.8% via cruise ships.

With the 75th Anniversary of Pearl Harbor, Hawaii saw a surge in hotel occupancy and room rates. Statewide the average daily room rate jumped 6.3% to $225.65 and the percentage of hotel rooms occupied jumped 3.2% to 78.9% compared to the same week last year. Maui saw a significant increase in the average daily rate, jumping 7.6% to $249.28. The occupancy rate inched up 0.3% to 74%.

TRAVEL

Young blond hair three year old boy lighting the candles in the Jewish tradition to celebrate Hanukkah

Hawaiian Airlines increased its number of passengers by 2.9% last month compared to November 2015, and the airline is on pace to exceed last year's passenger count by nearly 4%. Hawaiian Airlines will start it's new route from Tokyo's Haneda Airport to Kona (on the Big Island of Hawaii) starting this Tuesday with the re-establishment of a U.S. Customs station there. Hawaiian will operate 3 flights a week between Haneda and Kona and 4 flights between Haneda and Honolulu. Gov. David Ige says that international travelers spend more money ... and he estimates that each international flight that arrives generates $7 million to the general fund.

MORTGAGES

There is so much to discuss in this section due to the Fed hike rate last Wednesday and its mortgage impact. I'm going to turn this over to my guy Dean Rathbun of Avis Mortgage who can explain as well as clarify some misconceptions. Dean said that first off, the Fed does not set mortgage rates. Short-term rates are different from long-term rates. Mortgage rates typically follow long-term bond rates, such as the 10-year U.S. Treasury note. In fact, mortgage rates have risen near to 60 basis points just since the presidential election ... more than twice the quarter-point increase that the Fed voted on. The Fed raised the federal funds rate by a quarter of a percentage point, increasing the target range for the rate to 0.5% - 0.75% ... up from a range of 0.25% - 0.5%. It's the first increase in a year, but just the second increase in a decade.

The Fed also announced that it expects to raise short-term rates three times next year by a total of 75 basis points. If they do, we could come close to 5% on 30-year conforming rates before the end of next year. So why raise the rate now with inflation below target and the labor market still recovering? Acting ahead of inflation will allow the Fed to normalize rates gradually to avoid disrupting markets. The recent hike still leaves interest rates in a very accommodative position, and borrowing costs are likely to remain low throughout 2017. My advice ... if you intend to buy next year and finance the purchase with a mortgage, acting sooner than later will cost you less.

GREEN

Solar power and Hawaii ... seems like a reasonable fit. But did you know that Hawaii is one of the most active states in the country when it comes to the hydrogen and fuel cell industry? I'll have more for you on that topic next month, but I wanted to jump to another energy source you might not think of when it comes to Hawaii - nuclear power. One of the reasons Hawaii does not have nuclear power as part of its energy mix includes the fact that the state's constitution forbids it. But interest in nuclear power plants being built in Hawaii has been ramping up once again, especially with the state's newly upgraded renewable energy goal of achieving 100% clean energy by 2045. So because of interest from all sides of the issue, organizers of the upcoming Maui Energy Conference, set for March 22-23, have decided to include a discussion of the "forbidden topic" of nuclear power.

Okay, back to solar power. Back in the 1970's long before the massive growth of solar panels, solar-powered hot water heaters became popular in Hawaii. In fact Hawaii leads the nation in solar-heated homes. Regular roof-top solar panels have been suffering a steady decline in Hawaii after state regulators halted a popular incentive program over a year ago. But things are definitely looking up ... and the reason is energy storage. Systems that enable households to generate their own electricity and to potentially store energy for use after the sun goes down is gaining traction with installations more than doubling since last month.

MAUI HAPPENINGS

Maui Celebrity Series tickets

12/30: William Shatner Live

3/25: Belinda Carlisle, Cheech and Chong

Maui OnStage Iao Theater tickets

3/3-19: Dirty Rotten Scoundrels

4/28-5/14: A Few Good Men

5/20-21: West Side Story Concert Maui Chamber Orchestra

7/14-8/6: 9 to 5 The Musical

Maui Arts & Cultural Center

tickets

12/21: Jim Gaffigan comedy

12/29: Phil Lesh & Friends grateful dead music

1/01: Bill Maher with Margaret Cho

1/03: Straight No Chaser male a capella group

1/07: Rita Rudner

1/11: Frank Vignola & Vinny Raniolo guitar

1/13: Her Bodies of Stories by Lyz Doyo

1/14: Young the Giant

1/15: Rakuhaku Workshop demonstration/participation

1/15: Judy's Gang tap & jazz dance

1/16-17: New Shanghai Circus

1/19: Black Arm Band presents"dirtsong"

1/20: UB40

1/21: Jamie Adkins: Circus Incognitus

1/22: Maui Orchestra: Broadway Pops

1/26: Garrick Ohlsson piano

1/27: Judy Collins

1/28: Chad Taktsugi hawaiian music

1/28: Felix Cavaliere's RASCALS (founder of the Young Rascals)

Maui Film Festival info

Date	3:30pm	5:30pm	7:30pm	9:30pm
12/20	Miss Hokusai	Sing	*
12/22	Seasons	Tanna	Neruda	Nocturnal Animals
12/23	3pm *	5pm Arrival	Fences
12/27	1pm Florence Foster Jenkins		* 3, 5, 7:30pm
12/28	3pm *	A Monster Calls	20th Century Women

*special surprise screening

Queen Kaahumanu Center - Kahului

Snow Falls Center Court 6:30pm & 8:30pm: 12/20, 23

Pet Photos with Santa 6pm: 12/19

New Years Eve (in addition to resorts/hotels)

New Years Eve at Lumeria tickets

Special Drums of the Pacific Luau Lahaina 2 shows tickets

Pacific Whale Foundation Cocktail Cruise from Lahaina 10:15 & 10:30pm info

Pacific Whale Foundation Cocktail Cruise from Ma'alaea 10:15, 10:30, 10:45pm info

Pacific Whale Foundation No Alcohol Cruise Ma'alaea 10:30pm info

Pride of Maui Ma'alaea info

Alii Nui Maui Ma'alaea info

At this time of year we all try to count and remember what we're Thankful for. As we celebrate our Berkshire Hathaway Maui 2nd Anniversary, Sid and I are thankful for your loyalty, your response to our monthly updates, and for keeping us in mind if you're looking to sell or perhaps add to your real estate portfolio. Remember we're the only Berkshire Hathaway Real Estate Brokerage on Maui, and now with two offices to serve you ... Lahaina and our new Wailea-Makena office. We're available to you 7 days a week.

Happy Holidays to friends and ohana ( family ) celebrating Christmas, Hanukkah, and Kwanzaa.

Then the Grinch thought of something he hadn't before.

What if Christmas, he thought, doesn't come from a store?

What if Christmas, perhaps, means a little bit more ...

Mahalo,

John and Sid