Gary's Blog

Saturday, March 27, 2010

Hawaii Economy on Rebound

The University of Hawaii Economic Research Organization (UHERO) is predicting recovery this year. Hawaii economic growth was negative 1.3% in 2008, negative 0.4% in 2009, and expected to be negative 0.2% for 2010.

Hawaii visitor growth has been encouraging in recent months.

Nationally, the GDP growth was just announced yesterday to be 5.6% in the October-to-December quarter, and Hawaii's growth typically follows the national figures by about six months. So we should be seeing that growth occurring beginning this quarter or next. The national figures are the best we have seen in six years!

Unemployment in the state of Hawaii has been considerably lower than nationally. The national rate just dropped again to its lowest level since September 2008, when the financial crisis intensified. Initial jobless claims dropped by over 30,000 last month, a bigger drop than analysts' estimates. Hawaii state unemployment is predicted to peak out at 6.9%, vs. the 9.7% nationally.

Another positive sign for Maui real estate values is the increased air traffic to Kahului from the mainland. I have reported multiple airlines' increased flights to Kahului from Chicago, Alaska, Orange County, LAX, and others. Alaska airlines just landed their first new flight from Sacramento to Kahului yesterday, just further evidence that the airlines are predicting the good 'ole days of tourism coming to Maui.

Buy the real estate now at the lowest prices we have seen in almost a decade, and watch your values and income rise as the economy does. And with some of the lowest interest rates we have seen in forever, and the strongest foreign currencies we have seen in decades, 2010 bodes to be a great year for Maui real estate investors!

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Monday, March 22, 2010

Economic Recovery Data Keeps Rolling In!

The number of first-time claims for unemployment fell last week for the third time in a row, a sign the job market is healing.
Luxury clothing stores rose quite nicely last month. Nordstrom for example, saw sales surge 10.4% from the previous year same-store sales. Lower end stores such as Target and J.C. Penney saw smaller gains, but still, gains.
Business at high-end hotels is coming back. Revenue at luxury hotels was up 7.7% last week from a year ago.
Overall U.S. auto sales were up 13% for February, and luxury brands did even better. Revenue rose 32% for GM's Cadillac brand, nearly 14% for BMW and 17% for Honda's Acura. Lexus was up 5% while Toyota fell due to widespread recalls.

Confidence in the economy has risen most amount wealthier Americans. The S & P 500 index has surged more than 70% since its bottom last spring.

Inflation, meanwhile, has all but vanished. Consumer prices were flat in February. That absence of inflation allows the Federal Reserve to keep the Federal Funds rate at a record low of 0 to .25%.

Interestingly, Maui real estate is seeing a rebound, all across the board. For example, a listing for $27.5 million in Makena is in escrow. Four listings in Wailea Kialoa are in escrow.

And at the lower end, units like Kihei Villages, that had 30-35 listings active at any one time one year ago, is down to only six active listings, with eight in escrow! 26 of those units have closed escrow in the past 12 months, which brings us to less than three months' inventory.

Monday, March 15, 2010

Americans Regaining Wealth

The Federal Reserve said Thursday that net worth rose 1.3% in the fourth quarter to $54.2 trillion. That marked the third straight quarter of gains. Net worth rose a more robust 4.5% in the second quarter of '09, and 5.5% in the third quarter.

Growth in stock portfolios delivered the biggest lift to net worth. Higher home prices helped a bit.

Just another sign. What we find in Maui real estate is that when prospective buyers feel wealthier, they come here to buy. It's just a matter of time!

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Thursday, March 11, 2010

Island Tourism is UP

Great news for Maui real estate owners! Maui's occupancy rate jumped to 67.5% in January compared to 59.8% one year ago. There was a smaller but still encouraging jump for the state as a whole, as well- from 63.1% in 1/09 to 66.5% in 1/10.

It is not easy to ignore all these positive statistics.

Even the naysayers are saying yay. Yesterday's Maui News actually published an article giving the reasons why it appears the resort real estate market has hit bottom. Check it out at for 3/10/10, it is on page 3.

In another article today, Maui News reports that foreclosures are up from one year ago, although the rate of increase is the smallest annual increase we have seen in four years. And the foreclosure rate in February was actually down from the prior month by 2%.

Call me now for your piece of Maui real estate- while the getting is good!

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Sunday, March 7, 2010

Labor Statistics Improving

The employment data that was released Friday had a cut of only 36,000 jobs, fewer than predicted. Many economists are saying the jobless rate may have peaked (again 9.7% last month), and predict the employment report for March will kick off a string of monthly job gains. Wall Street responded positively with a 122 point (1.2%) surge in the DJIA on Friday.

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Still More Flights to Hawaii

Continental said Friday that it would add a daily red-eye from Maui to Los Angeles, and a return afternoon flight from L.A. It will also begin a four-times-a-week afternoon flight from Maui to Orange County, CA, and a return flight leaving in the late afternoon.

Allegiant announced it will soon purchase two Boeing 757s to launch service to Hawaii later this year and will buy four more in late 2010 and next year. The airline now serves California, Oregon, Washington, Arizona, and Las Vegas.

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Friday, March 5, 2010

Retail Sales Up!

A very strong report for the U.S. economy. Retail sales just experienced the largest gains since 2007, before the recession began. The 3.7% February rise surprised economists who expected closer to a 2% gain.

What a time to buy Maui real estate! Sellers are anxious to sell, and so many signs are pointing toward good times ahead!!

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Thursday, March 4, 2010

More Indications of a Recovery

Manufacturing, construction and personal income, and spending are enjoying modest growth. Mfg output expanded in January for the seventh straight month. The manufacturing index read 56.5 for February. Anything above 50 indicates growth.

Personal spending rose more than expected, with a 0.5% increase in January..

The Institute for Supply Management said its employment measure grew for the fourth time in five months in January.

Housing construction rose 1.3% in January.

The Federal Reserve's survey of the nations 12 regions showed improvement in nine of the twelve regions. Bad weather set back the Richmond district. The Fed says that the record low interest rates are still needed to sustain the recovery. Good news for Maui real estate investors!