It's hard to believe it's been 10 years since Capitol Place was built in Downtown Honolulu.

Capitol Place in Downtown Honolulu

2008: Quality Product Met Demand

Capitol Place was completed in 2008 and developed by the MacNaughton and Kobayashi Groups - both visionaries and brought a lot of the successes from Hokua, which they just wrapped up 2 years prior. The project was also a joint venture with the late auto dealer Jimmy Plueger who had owned the land. It was the first of its kind with a retail car dealership on the ground level and fee simple condos above. Since then, Oliver McMillan teamed up with JN Extotics to develop a similar concept - Symphony Honolulu in Kakaako (completed in 2016).

At the time of the launch, the majority of the product sold out very quickly. Unlike The Pinnacle Honolulu across the street that still has residual developer product to this day, the developers of Capitol Place hit the market pricing right just before the market turned in the global financial crisis in the fall of 2008. Here's the historical data since:

Historical Pricing on Capitol Place 1, 2 and 3 Bedroom Condos

Looking Back on the Past 10 Years

The graph above shows both the median and average sales price of 1, 2 and 3 bedroom condo sales from 2008 through 2018 (YTD). What's apparently clear (like most Oahu real estate since) is 2009-2012 were definitely the years to buy in hindsight. Also, like most Oahu real estate the prices are quite a bit higher than they were at the previous peak. We're fortunate in that there's still many markets across the US where prices have not rebounded since their all time highs. 

By looking at the data above, which product do you think appreciated the best? The 1, 2 or 3 bedroom product? Here's the raw numbers and appreciation from 2008 to 2018:

• 3 Bed Median $851,001 to $925,000 = 8.7%
• 3 Bed Average $849,860 to $922,500 = 8.5%
• 2 Bed Median $640,000 to $812,500 = 27%
• 2 Bed Average $642,597 to $808,400 = 26%
• 1 Bed Median $465,000 to $625,000 = 34%
• 1 Bed Average $470,169 to $625,000 = 33%

So, it appears the 1 bed units appreciated the most over time. Both the 1 and 2 bed units appreciated over 3 times more than the 3 bed units! Hindsight is always 20/20, however perhaps a takeaway is to buy something that's more affordable?

Anchor Name Change

Another major change outside of the condos themselves is Phlueger Honda rebranded as Pacific Honda after some of the negative press received of the late Jimmy Phlueger. Although he did a lot of good for the community on Oahu, the constant news coverage of the Koloko Dam Breach on Kauai probably made it a good idea to move forward with less distractions from their core business.

Still a Great Buy?

There's not much competition if you want a quality product in Downtown Honolulu. Most all the new construction is taking place in Kakaako and if you want the ability to walk to work, live in a building with outstanding service, pet friendly environment and one of the nicer condo gyms in town, Capitol Place could be the right place for you. If you're thinking about buying or selling at Capitol Place, feel free to contact me for more information.

The median sales price for a single family home on Oahu hit $789,500 in July, which was the 2nd highest on record. The current record is $795,000 set in June of last year.

Single Family Home Stats

This Hoakalei home (MLS # 201814344) priced at $788k is just under July's median

In addition to nearing the record high, there were 1.5% less homes selling on Oahu, which drove higher demand and the average sales price increased a whopping 10% from last year to finish at $974,835! The median days on market finished at just 13 days, which is a 35% drop compared to this time last year. Hence, we're still in a strong Seller's Market according to the data.

Condo Sales Stats

This Waikele condo (MLS #201819102) is priced at $429,000 just under July's median

The median condo price of $429,500 also was near a record high. The previous condo record price of $435,000 was set in March. Sales increased 5.7% to round out with 507 closed transactions for the month. Although Days on Market increased 28.6% from 14 to 18 days, it was still a Seller's Market for sure.

To find out what is happening in your specific neighborhood (or street for that matter), feel free to contact me for more information.

This week I attended an informational meeting at Jefferson Elementary School on the Lease to Fee Conversion of the remaining Leasehold units at Foster Tower, Liliuokalani Gardens, Waikiki Banyan and Waikiki Sunset.

The reason I went was twofold:

1. Learn about the process for the remaining Lessees that wish to purchase the fee

2. Learn about the investment opportunity for 3rd party investors to purchase the fee 

The meeting was hosted by Peter Savio of Savio Realty LTD as they are the exclusive brokerage representing Liliuokalani Trust in the sale of these remaining units.

Peter Savio at Jefferson Elementary discussing Lease to Fee Conversion

Liliuokalani Trust hired the right guy for the job as Peter Savio has literally done thousands of these unit conversions over the years. He weighed out the pros/cons and options the Lessees (that have not already purchased the fee to their unit) have:

1. They can Buy the Fee
2. They can remain in their unit and surrender the improvements when the lease is up
3. They can sell now (as leasehold) and offer the fee purchase simultaneous to a Buyer

He also made it quite clear that this is the 4th (and most likely the last) offering to the lessees. Roughly 90-95% of the owners in the buildings have already taken advantage of the opportunity to buy, so it gets more costly due to smaller scale for Liliuokalani Trust to go through this process each time. Thus - after this last shot, the fee interest will be available to 3rd party investors.

The deadline for the Lessees to go to contract is November 27, 2018 and the closing deadline is February 25, 2019. After that, the trust plans to put fee interest in those units available to 3rd party investors.

Here's the takeaways I got in each tower:

Foster Tower

The Foster Tower fee purchases were by far the highest due to the location and views from the building. Studio units start at $287,300-$290,500 on the lower floors, ranging from $600k + for the fee on 1 bed units and the Penthouse units were well over $1 million. The land lease expires in 2034.

Liliuokalani Gardens

There are 18 units remaining with the land lease expiring in 2039. The Fee purchase on the studios ranged from $117,000-$120,000, 1 beds $191,000-204,000 and 2 beds $309,000.

Waikiki Banyan

There are 45 timeshare units where the fee purchase is available today to 3rd party investors. There's an additional 20 units (65 total) being offered to lessees and the land lease expires in 2035. Since all the units are 1 bedrooms at Waikiki Banyan, they were all being offered for $191,500 each. The penthouse units which were slightly higher, which from experience probably has to do with the higher ceilings.

Waikiki Sunset

95% of the fee simple interest has already been sold to lessees in the past. Only 20 remain leasehold and the land lease expires in 2036. The fee purchase on the 1 bedroom units is $183,000 and $216,200 on the 2 bed units.

Have more interest?

If you're a lessee and have more interest in purchasing the fee before it's too late or a 3rd party investor interested in picking up the fee interest in one of these prime Waikiki Condos, feel free to contact me for more information.

It's hard to believe tomorrow marks a year since the tragic fire at the Marco Polo Apartments on Kapiolani Blvd. I remember it like it was yesterday. I was coaching my daughter's canoe team on the Diamond Head side of the Ala Wai canal when we saw all the smoke and heard the fire engines.

Post fire damage of the Marco Polo

When I heard it was the Marco Polo, the first thing that ran through my head and shared with the coaches at paddling is it won't be good... Having been a Honolulu Firefighter for roughly 8 years, I knew the building had an enclosed hallway and was hard to ventilate. I also knew it was an older building that most likely didn't have sprinklers and the chances of the fire spreading throughout the hall from unit to unit would increase.

Tragic Day and Lessons Learned

It's really sad that 4 people lost their lives that day. A year later we've seen politicians and the community try to pass legislation for older buildings to retrofit for sprinklers. We also have seen in recent days in the news that (to no surprise) a handful of lawsuits are out there.

My predictions after the event was that sales in the building would come to a grinding halt as the building, knowing it would be hard to get a financing on with litigation, fear and uncertainty. I recall looking up the building in MLS the following Saturday morning and saw there were a few units in escrow.  Unfortunately, all those deals fell apart.

Marco Polo Sales 1 Year After Fire

Here's the data that came to fruition since:

Marco Polo Sales 1 Year After Fire and Years Prior to Fire

Since the fire that took place on July 14, 2017 there have only been 2 sales that have closed in MLS (both of which closed last month):

• Unit #3506 closed on June 20, 2018 for $570,000
• Unit #3409 closed on June 25, 2018 for $490,000

The last sale prior to that was July 12, 2017 (2 days prior to the fire). In the 365 days prior to the fire there were 21 sales, 24 the year prior and 35 the year prior to that. Both of the deals that closed last month were (as predicted) cash deals. Of the 5 units currently for sale in the building they have an average of 99 Days on market which is nearly 5 times the average days on market for condo sales on Oahu.

Going Forward

We pray that time will heal those that have lost loved ones. I also predict that time will heal sales in the building. In the past 10 years we saw other buildings in town such as the Ilikai and Moana Pacific that went through some tough times when they were in litigation. Over time, banks WILL start lending again at Marco Polo.  It's not a matter of if, it's when. I can't predict when that will happen, however I do know sales volume will start to pick back up and my prediction is those that have cash and can wait out the storm may be happy campers - just like those that bought at the Ilikai and Moana Pacific during those hard times.

Over the years it's been hard to find a fee simple unit in the Wailana at Waikiki. There's been times where months and months go by with none available for sale. Of the 10 units currently on the market, we now have 3 that are fee simple:

1. Unit 805

View from Wailana #805 (MLS # 201814156) listed for $578,000

2. Unit #1305

View from Wailana at Waikiki #1505 (MLS # 201812429) also listed at $578k

3.Unit #1301

View from Wailana #1301 (MLS #201809153) asking $650,000

On top of there being very little inventory, there hasn't been any fee simple sales in the building over the past 6 months. The most recent fee simple sale was unit #1500 that closed in October of last year for $670,000. If you're looking to make a move on a fee simple unit in Wailana at Waikiki, now may be your opportunity.

I'd like to take the time to thank all those who served our country and gave the ultimate sacrifice for our freedom as we celebrate Memorial Day.

If it weren't for them, who knows where we'd be today? Occupied by Japan here in Hawaii? Ruled by the Germans on the Mainland? Perhaps there would have already been another 9/11? As we enjoy our Holiday off from work, school and preparing for summer with BBQ's and friendship, let's not forget why we have this Holiday.

Lieutenant Michael P. Murphy "Murph" and Operation Red Wings

Operation Red Wings Memorial Park (also known as Triagle Park) at Diamond Head

I first learned of Lieutenant Michael P. Murphy a few years ago watching the movie Lone Survivor. The film was very intense and heavy and gave me a real sense of what the ultimate sacrifice meant. During Operation Red Wings, Murphy sacrificed his own life to save his friends. It was only after seeing the movie that I realized and felt honored that our local park at Diamond Head has a memorial to honor those of Operation Red Wings (from the film) including Michael Murphy.

Crossfit and "Murph"

I first heard of Crossfit a little over 10 years ago from a client of mine that worked for the DEA. He said it was a fitness program done by many in the military, DEA, FBI (and civilians). Since then, the phenomenon and culture have exploded all across the country. I've attempted a number of the workouts from their website on and off over the years, however never really got formal instruction until this past fall. My friend Serge has been going for years and convinced me to try Crossfit East Oahu. What's great about Crossfit (outside of the physical fitness and constant variety of exercises) is the tribute they offer to our fallen heroes. They call them "HERO WODS". 

Today was my first time to do the "Murph" WOD which I've heard is a tradition at East Oahu's Box (Gym). This workout is a 1 mile run, followed by 100 Pull-ups, 200 Push-ups and 300 Air Squats, followed by another 1 mile run. Those that are really serious take it a step further and wear a 20 lb. weighted vest. I wasn't quite ready for that yet... It was tough enough as it was!

Helping Our Veterans to Buy and Sell Homes

One of the highest honors I've done in my real estate career is helping our Veterans with their home purchases and sales. As we head in to PCS Season, I look forward to helping more of our Military families with their housing transitions this summer.

This past month we saw residential resales on Oahu finish up 3.2% at 289 transactions for single family homes and 12.6% at 547 transactions for condos.

Single Family Home Stats

This Hoakalei home (MLS # 201812925) is listed for April's median price of $790,000

The median sales price finished at one of the highest we've seen on record at $790,000, which was slightly off the record of $795,000 in June of last year. However, it was a healthy 10.9% increase from April of last year. As I said earlier, the number for transactions was also up and homes were again moving briskly with a median number of Days on Market at just 17 Days.

Condo Stats

Chateau Waikiki condo (MLS # 201812311) priced just under April's median of $416,000

The median sales price was $416,000. Although this was off March's record high of $435,000, we saw a huge uptick in the numbers of sales by 12.6% as I mentioned earlier. The median days on market also showed strength of a Seller's Market.

Local Market Updates

As always, real estate is local and here's what neighborhoods were hot for buyers and sellers in the month of April:

Neighborhoods “Hot” for Sellers

• Home sales in Moanalua-Salt Lake were up 200%
• Home prices in Aina Haina-Kuliouou were up 98%
• Condo sales in Hawaii Kai were up 69%
• Condo prices in Kapahulu-Diamond Head were up 148%

Neighborhoods “Hot” for Buyers

• Home sales in Makiki-Moiliili and the Windward Coast were down 29%
• Home prices on the North Shore were down 34%
• Condo sales on the North Shore were down 60%
• Condo prices in Mililani were down 57%

What’s Happening in Your Neighborhood?

Please consider these are broad overviews for regions on Oahu. To find out what is happening in your specific neighborhood (or street for that matter), feel free to contact me for more information.

In Hawaii, we are known to have some of the highest real estate prices in the country. So far this year, we've seen a steady increase in interest rates. To keep things simple, here's an illustration that shows how an increase in rates over time could lead to less purchasing power for a Buyer.

Although it's tough to find a home or condo here these days for $350,000 or less, the point this illustrates is an increase in interest rates from 4% to 5% reduces a Buyer's purchase power by over 11%! 

If this trend continues, it'll make housing less affordable for those that are financing. If you're on the fence and will be financing, I'd recommend speaking with a lender to see where you stand as it may make a difference between affording to buy now vs. missing the market. 

To find out today's current rates, feel free to check with Tim O'Leary with Prime Lending for more information.

In addition to me having the lowest priced listing on Hawaii Loa Ridge for sale, the home next door is also a great bargain.

88 Moaniala Place (highlighted) and 96 Moaniala Place (red roof) are both available for sale

Rare Opportunity

It's not that often you have two homes listed right next door to each other, let alone as such great prices for a given neighborhood.  In the past year, the median sales price on Hawaii Loa Ridge was $2,500,000 with a few homes trading over $4 million! If someone wanted to buy both 88 Moaniala Place (MLS # 201804433) for $1,680,000 and 96 Moaniala Place (MLS # 201801582) for $2,300,000 the combined price would be $3,980,000 for two homes!

This is a great opportunity when you consider 828 Moaniala St (MLS #201630748) around the corner with the blue tiled roof in the photo is listed for $12,200,000.

If you know anyone looking for a compound with 2 separate homes and parcels adjacent to each other on Oahu's premier gated community, feel free to contact me for more information.

Lost TV Star Josh Holloway just listed his marina front home in Hawaii Kai's West Marina neighborhood.

338 Awini Way (MLS # 201809956) is listed for $1,150,000

Island Life

Marina perspective, front yard and back door space to the marina

Situated on a peninsula in the back corner of the marina, the home sits on a cul de sac and has the feeling of the outdoors with ample yard space and a nice back deck great for entertaining. Having the ability to access the marina from your back yard is priceless. Imagine taking your boat, canoe, kayak or SUP in the marina or out to the ocean....

Cozy Indoor Space

Hardwood flooring, upgraded kitchen and split AC

Although the home is listed in MLS as built in 1962 and remodeled in 1982, it's pretty apparent there have been lots of other upgrades along the way with beautiful hardwood flooring, an upgraded kitchen with stainless steel appliances and split air conditioning units in the living area and bedrooms.

Priced to Sell

Halloway purchased the home back in 2005 for $774,000. It's priced to sell as the lowest priced detached single family home on the marina at $1,150,000. The next lowest price one for sale on the marina another marina front home in West Marina for $1,499,000 at 6312 Ookala Place.

This is also a bargain when considering it's priced near where attached town home units at nearby Kuapa Isle have been selling for. Imagine being able to get a detached single family home on the marina for the same price...