Super Ferry Is Operational

After numerous delays related to legal battles over the operation of the super ferry in Hawaiian waters, it is now operating between Oahu and Maui. Generally, the legal battles were over the need for environmental impact studies that were never done to determine namely if there would be any danger to migrating Humpback whales. The super ferry will now operate in and out of Maui daily offering inter island travel between Oahu and Maui. Hawaiian residents may now drive their cars on to the ferry offering more freedom to travel interisland. This will open up intrastate travel wherein residents can go shopping and bring items bought back home without the baggage restrictions commonly experienced with the airlines. It will also offer alternative emergencies services to other islands in the event of a natural disaster. Over the next couple of years, travel from Maui to the Big Island will be made available. The super ferry will be an asset to those who want inter island travel without having to board an airplane. It is also believed this will offer another boost to the local real estate market as residents of other islands may be more likely to consider a second home with the convenient services offered by the super ferry.

Moratorium On Water

Home prices on Maui will certainly be affected by recently mandated restrictions on water meters. Although parts of the island of Maui are one of the wettest places on earth, Maui County bureaucrats have not delegated enough money to draw water from these sources to accommodate the increasing demand. Developers who want to build a subdivision or condominiums will first have to prove they have a long-term source of water. Meaning, the County will no longer deliver water to new projects. Maui County Council passed such a bill on December 7, 2007. Essentially this is a water moratorium that will have a significant impact on growth. Many developers are concerned and the County council hides behind the statement that the developers have been warned for years. Interestingly, the County has been collecting developer fees for years and property values have skyrocketed thereby County's property tax collection has skyrocketed. Where does the money go to plan for inevitable growth and demand for water. Obviously, it is not going to infrastructure. The County has been wrestling with the issue of developers not offering affordable "local" housing due to the rapid appreciation of real estate prices. The insatiable demand for Maui real estate continues and is anticipated to increase on an international level as previously mentioned in this blog. County Council has just accommodated the basic principles of supply and demand by way of slowing development growth through these restrictions. This fact, coupled with increasing demand for Maui real estate, will create the "perfect economic storm" for inflation in the real estate market in the years to come.

Hawaii Home Prices Appreciating

Hawaii's resort market has seen the average price for vacation homes soar by nearly 24 percent in the last year, even as the number of homes, land and condominium sales declined by 9 percent. The average price of a single family home in a resort-zoned planned community such as Wailea on Maui has more than doubled from nearly $1.4 million in 2004 to more than $3 million in 2007. Most of the slowing in the market has been in properties below $1 million, while the upper echelon is robust. High end sales have the best opportunity for going forward. Starwood Capital Group's Baccarat Wailea resort on Maui sold $300 million opening day with condominiums priced at $2,000 per square foot. Trump International Hotel & Tower in Waikiki set a worlds sales record when it sold $700 million in eight hours. Bottom line is today's buyers are in their 40's and 50's, have children, want at least three bedrooms and have made an astronomical amount of money. Thus, the resort home market in Hawaii will remain strong for a number of reasons. The baby boomers are just beginning to retire which will continue to fuel the growth. Furthermore, the Asian market coming from Japan, Korea and China are just beginning. Lastly, the weakening U.S. dollar is making purchases in Hawaii much more attractive to Canada, Asia and now even Europe.

Hawaii Is An International Market

While real estate transactions continue to slump around the United States, it's busy in the Hawaii luxury home market. Hawaii is the Monaco of the west, attracting buyers from all over the world. Hawaii has attracted a global interest because of the weakening value of the dollar, namely Canada, Japan and Korea. Over the next decade, expect to see an even greater Asian influence in the Hawaii real estate market. China and South Korea's robust economic growth, combined with changes in some banking restrictions, will make Hawaii more attractive for this new large group of investors. Hawaii is an appealing destination because it is safe and clean with warm turquoise water against coconut palm studded white sandy beaches framed by 10,000 foot mountain back drops. All this beauty within the borders of the United States thereby offering all the amenities this great country has to offer. After one travels to Thailand or Singapore, most are not thinking of retiring there. However, wealthy baby boomers are now in position to buy retirement or vacation homes and Hawaii is a perfect fit for the lifestyles of the internationally rich and famous.