Interest Rates drop again to 4%.

Aloha, 

US economy closer to normal than it appears: Fed's Bullard. The U.S. jobless rate will fall below 6 percent and inflation looks likely to rise back to 2 percent later this year, putting the economy closer to normal than most realize, a top Federal Reserve official said on Thursday.

"You are basically going to be near normal on both dimensions basically later this year," St. Louis Fed President James Bullard, speaking in an interview on Fox Business Network. "That's shocking, and I don't think markets, and I'm not sure policymakers, have really digested that that's where we are."

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Bullard reiterated his belief that raising rates by the end of the first quarter in 2015 will be appropriate, based on his forecast that U.S. growth will register 3 percent for the next four quarters.

If data disappoint, he said, he will revise that forecast.

Later Thursday, Bullard spoke at the Council on Foreign Relations, saying that at the current 6.3 percent rate of unemployment, the United States is "way ahead of schedule" on its trajectory toward a normal labor market. He added that that Federal Reserve may be behind the curve if the unemployment rate drops faster than expected, but he is confident that it will act appropriately.

Bullard also said that he believes the U.S. is no longer in a low-inflation environment, and that inflation will continue to tick higher and rise above 2percent next year.

By Reuters with CNBC - http://www.cnbc.com/id/101781858

Conventional			Conventional			FHA
30 Year Fixed Rate			15 Year Fixed Rate			30 Year Fixed Rate
Rate	Points	APR	Rate	Points	APR	Rate	Points	APR
4.0	1.25	4.176	3.0	1.875	3.386	3.625	1.875	3.837
4.125	0.25	4.218	3.125	1.25	3.421	3.75	0.375	3.839
4.25	0.0	4.323	3.25	0.75	3.474	3.875	0.0	3.934
Jumbo			Jumbo			Jumbo
30 Year Fixed Rate			15 Year Fixed Rate			7/1 ARM
Rate	Points	APR	Rate	Points	APR	Rate	Points	APR
3.875	1.75	4.054	3.375	1.625	3.668	2.875	1.0	2.978
4.0	1.0	4.118	3.5	1.125	3.719	3.0	0.75	3.085
4.125	0.125	4.170	3.625	0.625	3.772	3.125	0.5	3.191

Oahu Single-Family Home Price Rises 8%

The median price of a single-family home on Oahu rose 8 percent in May, while the median price for a condominium increased 13 percent, according to statistics released Saturday by the Honolulu Board of Realtors.

The median price of a single-family home hit $682,000 in May, compared to the median price of $630,000 that was set in May 2013. In addition, the number of sales increased by 15 percent to 305 units sold in May from the 266 condos that were sold during the same month 2013.

The median price of an Oahu condominium jumped 13 percent to $355,000 from $315,000 one year ago, while sales increased by just 1 percent to 457 condos sold from the 452 units that were sold in 2013.

City Council Looking for more money from Property Taxes

City Council Looking for more money from Property Taxes

In 2013 the Honolulu City Council amended the definition of the "Residential A" real property tax classification as follows:

"Residential A" shall mean a parcel, or portion thereof, which either:

1. Is improved with no more than two single family dwelling units; and(A) Has an assessed value of $1,000,000 or more; (B) Does not have a home exemption; and (C) Is zoned R-3.5, R-5, R-7.5, R-10 or R-20 or is dedicated for residential use;
2. Is vacant land zoned R-3.5, R-5, R-7.5, R-10 or R-20; or
3. Is a condominium unit with an assessed valuation of $1,000,000 or more and does not have a home exemption.

Residential A excludes any parcel or a portion thereof, improved with military housing located on or outside of a military base.

This revised definition of "Residential A" appears to focus on second homes or investment properties, as properties are not eligible for or do not have a homeowner exemption.

This year, Resolution 14-53, CD 1 would establish the tax rate for this category at $6 per $1,000 of the property's assessed value. This Resolution will be heard by the full City Council on Wednesday, June 4 at 9:00 a.m. as part of the City Budget hearing.

At previous hearings, HBR testified in favor of raising the threshold of Residential A properties from $1 million to $2 million. In addition, HBR proposed a tiered tax structure as follows:

            $1 to $2 million at a rate of $3.50 per $1,000

            $2 to $4 million at a rate of $4.50 per $1,000

            $4+ million up at a rate of $5.50 per $1,000

In initial discussion with Councilmembers, a single tax rate for Residential A at $4.50 per $1,000 was considered. The current proposed rate of $6.00 is higher than originally discussed. This upcoming hearing is about the rate. No further changes can be made to the threshold or to the classification at this time.  

The City Affairs Committee strongly objects to this rate and is calling for our members to take at least one of the following actions before theWednesday, June 4, 9:00 a.m. City Council hearing:

1. Contact your City Councilmember to voice your concern that the high rates would be passed on to renters forcing many low to middle class renters out of the rental market;
2. Send in written comments objecting to the proposed tax rate for Residential A by June 3 to your City Councilmember; and
3. Attend the City Council hearing scheduled for Wednesday, June 4 at 9:00 a.m.  If you intend to read your written comments, please submit your written testimony to Council Chair Ernie Martin byTuesday, June 3 at 9:00 a.m. You may also attend the hearing without comment.

Hawaii's Industrial Market is a Landlord's Market!

Hawaii’s industrial real estate market continued to tighten up in the first quarter of this year, which has fueled increased competition for the limited warehouse space still in the market, according to a new report.

The first quarter industrial report from CBRE Inc. said that the vacancy rate spiraled down to 2.2 percent from 3.5 percent the same time period a year ago.

“It’s a landlord’s market,” CBRE Executive Vice President Dana Peiterson told PBN. “Typically, when we get to this level, we start to see new product. For the first time in a long time, we are seeing speculative developments.”

New projects in the works are located in areas of Kapolei and Kailua, he said.

Other signs of the tight market that Hawaii is currently witnessing include base lease rents increasing and leasing activity heading north when comparing year-over-year totals.

Industrial leasing activity of warehouse space for the first quarter increased about 13 percent compared to the same time period last year.

Demand for space in the Honolulu core remained strong as base rents increased 3.1 percent to 99 cents per square foot per month from 96 cents per square foot per month.

Looking ahead, rents should continue to rise and the demand for new and improved industrial warehouse space still remains, the report said.

Foreclosure Proceedings in Hawaii Declined 9% in March

According to a report from RealtyTrac, a real estate data service based in Irvine, Calif., "One out of every 1,850 homes in Hawaii were in some stage of foreclosure in March. Nationwide, foreclosure filings, including default notices, scheduled auctions and bank repossessions, were reported for 117,485 properties in March, the company said, a decrease of 23 percent compared to March 2013.

Daren Blomquist, vice president at RealtyTrac, said in a statement, “Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,”

While Hawaii has always had a low percentage of foreclosures, certain areas of each island tend to see more than others.  Those areas are usually ones in Rural parts of the island, where recent new development has increased the inventory, making older homes less desirable and harder to sell.  

Oahu Housing Market continues to Soar

Oahu’s housing market continued on a hot pace in March, with both sales volume and prices of single-family homes up over a year ago. Condominium prices climbed year over year, but sales volume dropped off.

The median price of a single-family home on Oahu rose to $657,000 in March, an increase of 2.7 percent from $640,000 in March 2013, according to figures released Monday by the Honolulu Board of Realtors.

The number of sales rose 6.5 percent to 246 in March from 231 in March 2013. The median price of a condominium rose 2.9 percent in March to $350,000 from $340,000 in March 2013, but the number of sales declined 5.8 percent to 387 from 411.

“The Hawaii housing market is showing a great deal of resilience,” Julie Meier, president of the Honolulu Board of Realtors, said in a statement. She noted that single-family homes, on average, were on the market for only 17 days, compared to 22 days a year earlier. Condos were on the market an average of 25 days.

The March numbers are consistent with findings by the University of Hawaii Economic Research Organization, which predicts that the median price for a single-family home on Oahu will hit $700,000 later this year and reach $774,000 by 2015.