Tropical Opportunities (JPM)
Hawaii still a bright spot despite overall US economic downturn
by Darnell Little
The following is an excerpt from the Mar/Apr 2009 issue (Volume 74, Number 2) of JPM�, Journal of Property Management.����
Hawaii, America�s 50th state, has long been blessed with gorgeous weather and beautiful scenery. But as the U.S. economy plunges into a deep recession, Hawaii is showing off yet another attractive feature�a surprising resiliency to the country�s economic woes.
There�s no doubt Hawaii is feeling effects from the current financial crisis. Unemployment is up. Tourism, Hawaii�s biggest industry, is down more than 5 percent, with greater drops expected in 2009. And foreclosures rose steadily throughout 2008. But Hawaii�s real estate market has been largely insulated from many of the worst problems haunting the mainland markets. The foreclosure rate is rising, but it is still lower than most states. The raw, total number of foreclosures in Hawaii also remains smaller than most other areas.
For the most part, Hawaii�s banks also were not swept up in the subprime loan fiasco, so credit is not nearly as tight as in most mainland markets: Banks are still lending money for development projects. Residential, office and retail development is still occurring on the islands while the markets are shutting down in many mainland states.
�A lot of developers are still doing quite well here,� said Phyliss Kacher, CPM�, a vice president at Hawaiiana Management Company, AMO�, in Honolulu. Her company manages properties such as Hokua Luxury Condominiums and is the managing agent for the new Trump International Hotel & Tower, now under construction on Waikiki Beach.
The Trump Tower in Waikiki is currently on schedule and estimated to be completed by September 2009. The 38-story building will feature studio, one-, two- and three- story luxury bedroom suites. Kacher points to developments like these to show that real estate development in Hawaii is still strong despite the current recession.
�It�s not all roses out here,� Kacher said, �but loans are still being made on primary units. These are challenging times in our business, but we�re still doing well. The core business is solid.�
IREM Members have free access to the JPM� online archives and the �Online Exclusives,� articles that are only available on the IREM Web site. Non-members can subscribe to JPM� at www.irem.org/jpm.�