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The Oahu real estate market, which is the largest component of the larger Hawaii housing market, saw fewer foreclosure filings and higher hotel occupancy rates in the latest tracking period, pointing towards a tenuous recovery in the Islands in both the residential and commercial sectors. Foreclosure rates backed off of record high levels reached in August and September, according to Howard Dicus of Hawaii News Now. According to the real estate information company RealtyTrac, there were 1,271 foreclosure filings in Hawaii during the month of October, although that was actually a decrease compared to the last two months. Interestingly, RealtyTrac’s report also indicated that despite more than a thousand filings, only three foreclosure sales were actually executed in the month of October. It is possible that this is a result of a backlog of foreclosures, or alternatively fallout from the recent “robo-signing” scandal that hit a number of lenders, including Bank of America. Generally speaking, foreclosure filings do not end in a property auction but rather a negotiated settlement or a distressed or “short” sale. The number of foreclosure filings was distributed rather evenly in the most recent tracing period, with only Kihei and Honolulu showing more than 100 filings. However, more than 50 filings were counted in Ewa, Kihei, Kapolei, Lahaina, and Wainae. The geographic distribution of the foreclosure filings suggests that the crisis is not only affecting investors, but actual homeowners. Relative to the continental US, Hawaii foreclosure sales have resulted in a higher sales price compared to the original property valuation.
Although significantly lower than record highs reached before the economic downturn, higher rates of hotel occupancy serve as a positive corollary to the good news for Oahu homes for sale. Pacific Business News reported in early December that Hawaii’s hotel occupancy was just below 65 percent during week of Thanksgiving. According to a market report by Smith Travel Research and Hospitality Advisors, entitled “Hawaii Hotel Industry Snapshot,” the statewide hotel occupancy rate for the week ending November 27 was 64.9 percent. This represents an increase of just over one percent from year-ago levels, when hotels posted a 63.8 percent average occupancy rate. Hawaii’s occupancy rate is especially encouraging when considered to the average national rate, which remains well below fifty percent. Of all the major islands, only Oahu’s declined year-over-year, although 70.1 percent for the week was still easily the highest occupancy rate in the state. Significantly, the average rate for a hotel room returned to near-2006 levels in the most recent tracking period, suggesting strength in this sector of commercial real estate.
One of the more enigmatic players in the Oahu real estate market, Genshiro Kawamoto, took millions of dollars of property off the market in November, according to a November 11, 2010 report from KITV News. Genshiro Kawamoto is a Japanese real estate tycoon who maintains millions of dollars worth of residential property in the upscale neighborhood of Kahala. Kawamoto is known for his unusual usage of property, including allowing low-income Hawaiian families to stay rent-free in multi-million dollar mansions and planning to construct an upscale art museum. Recently, Kawamoto put about a dozen Kahala mansions on the market, only selling one in what he described as a test of real estate market conditions. The test apparently had some significant meaning for Kawamoto, who proceeded to purchase two more beachfront lots in the same neighborhood. He paid a total of just under $40 million dollars to create a single, large beachfront lot. Earlier this year, Kawamoto created much speculation after proposing the construction of an art museum in one of his properties.
One of Oahu’s most notable landmarks is up for sale, according to the Honolulu Star Advertiser. Aloha Tower Marketplace, which surrounds one of the most recognizable historical sites in the state of Hawaii, has been put up for sale by the same company that successfully salvaged the finances of the site half a decade ago. Aloha Tower Marketplace has been owned by New York-based investment firm AREA Property Partners for the last five years. AREA partners has hired Honolulu real estate firm Colliers Monroe Friedlander to find a buyer for the famous landmark, although no asking price had been set as of the publication of the newspaper report. Aloha Tower Marketplace is constructed on state-owned land by way of a long-term lease, and capitalizes on the population of the iconic clock tower, which was for a time the tallest structure in the Hawaiian Islands. The Marketplace opened just over fifteen years ago, after being built by Aloha Tower Associates for nearly $100 million. Before falling into bankruptcy, the company had plans to build an adjoining office tower, condominiums, a hotel and underground parking.
