The city has begun preliminary work on a new sewer line serving Waikiki that in two years will replace the above-ground, temporary pipe running along Ala Moana Boulevard.

The black above-ground pipe has been a visible reminder of the March 2006 break in which an aging sewer force main ruptured, sending 48 million gallons of raw sewage into the Ala Wai Canal. It was the worst sewage spill in state history.

The new sewer main, 5,800 feet long and 6 feet in diameter, will run from Ala Wai Elementary School to the eastern entrance of Ala Moana Beach Park. It will connect to the Beachwalk Wastewater Emergency Bypass — completed last year — that goes under the canal to its mauka bank.

When the $37 million project is completed in 2012, the city will have two lines serving the area, the new pipe and the original rehabilitated pipe. Should problems arise with one line, the city will be able to switch to the other line.

While traffic disruptions are expected, Rick Egged, president of the Waikiki Improvement Association, said the project is necessary and vital.

“Certainly this project is very important not only to Waikiki but the surrounding community as well,” Egged said.

Micro-tunneling work to install the pipe underground is scheduled to begin next month. Micro-tunneling is a less-disruptive process in which a boring machine is used to burrow a tunnel, avoiding the need for an open trench. Access points called “jacking pits” are dug at intervals so 20-foot pipe segments can be lowered into the tunnel 40 feet below the surface.

Contractor Frank Coluccio Construction Co. will use “silent pilers” to push the pipes into the ground, instead of driving them, reducing noise.

The new pipes are made of fiberglass and are corrosive-resistant to withstand sewage gases, president Franco Coluccio said.

A challenging part of the project will be under the McCully Street/ Kalakaua Avenue area, where the tunnel will be on a curve. Micro-tunneling is normally done in a straight line. At the curve, contractors will use 5-foot-long pipe sections and a high-tech navigation system.

“It’s a more tedious process,” Coluccio said, adding that it is the first project in the United States to include a curved micro-tunneling alignment.

Contractors will work 10-hour days, Monday through Saturday.

One of my favorite reads, “Honolulu Magazine”, regularly publishes the “Best Of” articles and one of my favorites are the 50 reasons to love Honolulu.

“Not to break out that tired phrase again, but we Honolulu residents really are lucky. It’s easy to take for granted how cool, how eclectic, how just plain great this city is, so we thought we’d take a few pages to list just a few of the reasons, both big and little, that we love this place.

1.  Bon Dances

Andagi, taiko drums and the dance of joy-what more could you ask for?  There’s still one more chance to dance, on Sept. 20 at the Autumn Dance Matsuri at Hawaii Okinawa Center, 5 p.m.  For more information, call 676-5400.

2.  Karaoke Bar Food

You wouldn’t think that a shabby karaoke lounge in a strip mall would offer dishes like whole crab with curry, miso butterfish or kim chee steak. But in Honolulu, it’s highly possible. Some of our faves: Shinsho Tei on Nuuanu Avenue, Sunflower Lounge in Aiea and Lisa’s House by the airport.

3.  Sitting in a Monday morning meeting and discovering there’s still sand in your hair.”
Rest of the article, “50 Resons to Love Honolulu”.

One of the many reasons I love living, working and playing in Waikiki is that there seems to be a Festival just about all the time….for just about any reason or event!  This weekend we have Duke’s Oceanfest!

The welcoming waves and aqua waters of Waikiki offer a Hawaiian respite to ocean fans around the world starting today, through Saturday, as the annual Duke’s OceanFest commences live broadcast of its ocean sports events. All 10 ocean events & 900 athletes can be viewed in real time action at dukefoundation.org, and on Oceanic Time Warner Cable digital channels 250 & 1250 around the Hawaiian Islands.

First up today: the world’s top longboarders in the Kicker Audio Presents Toes on the Nose Rabbit Kekai Classic and the Gidget Pro Longboard; followed by the grace of tandem surfing in the Cabana’s Pool Bar & Nashville Waikiki Tandem Championships. (Four-day schedule below.)

If a last minute Hawaiian getaway is out of the question, then we welcome you to celebrate the life and legacy of the world’s greatest aquatic athlete, Duke Kahanamoku, with us via the internet. Revered worldwide as the “Father of International Surfing”, and a three-time Olympic gold medalist in swimming, Duke Kahanamoku (1890-1968) developed his incredible ocean sports skills in the very same arena where Duke’s OceanFest takes place: Waikiki.

Duke’s OceanFest proceeds go to the Outrigger Duke Kahanamoku Foundation’s (ODKF) college scholarships and athletic grants program that supports outstanding Hawaii scholar-athletes competing in water sports and volleyball. An auction of a one-of-a-kind Duke Kahanamoku longboard by Maui Longboards, as well as online and beach sales of commemorative 2010 Duke’s OceanFest t-shirts will go towards the ODKF college program.

BROADCAST SCHEDULE: Wednesday, August 25:
7:30am: Kicker Audio Presents: Toes on the Nose Rabbit Kekai Classic Round 1
10:30am: Gidget Pro Longboard Round 1
1:10pm: Cabana’s Pool Bar & Nashville Waikiki Tandem Championship Round 1
2:10pm: Kicker Audio Presents: Toes on the Nose Rabbit Kekai Classic Quarter Finals
3:30pm: Cabana’s Pool Bar & Nashville Waikiki Tandem Championship Semi-Finals
4:20pm: Gidget Pro Longboard Quarter Finals
5:40pm: Cabana’s Pool Bar & Nashville Waikiki Tandem Championship FINAL

Thursday, August 26 Sporting Events:
Kicker Audio Presents: Toes on the Nose Rabbit Kekai Classic
Gidget Pro Longboard
AccesSurf Challenged Athlete Surfing
Cabana’s Pool Bar & Nashville Waikiki Tandem Legends
C4 Waterman Surf SUP Race

Friday, August 27 Sporting Events:
Hawaiian Airlines Duke’s Legends Surf Classic
C4 Waterman Surf-Off

Saturday, August 28 Sporting Events:
Corona Beach Volleyball Championships, Presented by Outrigger Hotels & Resorts
Duke’s Waikiki Ocean Mile Swim
Outrigger Hotels & Resorts Surf Polo Tournament
Maui Jim Presents: 2010 Hawaii Paddleboard Championships – Duke’s Race
Hawaiian Airlines Duke’s Legends Surf Classic
Corona Surfing Expression Session

Every week, I receive an interest rate report from one of my local lenders.  A few weeks ago, he included some information that was not only interestng, but also a little disturbing.  It has to do with how long a person’s credit is damaged after a foreclosure or short sale.  In other words, when can they qualify for a home mortgage again?

Here’s some details:

FHA Loans

• 2 Years after a Bankruptcy discharge date

• 3 Years after a short sale or foreclosure

One exception to the short sale rule: if the client is current on his mortgage and all otherdebt at time of short sale, and an extenuating circumstance can be documented, then the client could get another FHA loan sooner.

Conventional or Fannie & Freddie Loans

• 2 Years after a short sale with no mortgage or credit lates.

• 4 Years after a short sale with credit lates.

• 5 Years after a foreclosure for a primary residence

• 7 years after a foreclosure for a 2nd home or investment property.

So there you go.  If you have any thoughts, your comments are welcome.

Record-Low Interest Rates and a Scary Stock Market Are Prompting Investors To Sink Even More Money Into Their Homes

According to a recent article in the “Wall Street Journal”, “The housing crash has left at least 11 million people in the unenviable position of owing more on their homes than they are worth-and many more millions with properties worth far less than they paid for them.

But some might not be as trapped as they think.

Record-low mortgage rates and a new slump in home prices are presenting unusual opportunities in the housing market these days-even for so-called underwater borrowers.

Some intrepid homeowners are intentionally taking a loss on their current house-and writing a big check to retire their old mortgage-in order to buy twice the home for not much more money. Others, eschewing conventional personal-finance advice, are even opting for “cash-in” refinancings, paying thousands of dollars out of pocket to settle old loans-and then taking out new mortgages with lower payments, shorter durations or both.

Katie Everett, a real-estate broker in Denver, says none of her clients kicked in cash when selling their homes last year. This year, “about half are willing to bring money to closing, anywhere from $5,000 to $45,000,” she says.

Are these people crazy to be tying up even more of their cash in their homes, in effect doubling down on what has been a losing bet thus far? After all, any number of variables, from the employment picture to the credit markets, could weigh on housing for years to come.

Yet economists say trading up to new homes or refinancing existing ones can be smart-even if it means plunking down more cash to get out of old mortgages. People living in less-desirable neighborhoods might be able to find better homes in tonier ones that offer better appreciation potential. And with mortgage rates so low, such buyers can keep their monthly payments manageable, even though the new homes are more expensive.

“If you are trading up, what better time than when interest rates are at record lows and the cost of the trade-up is much less than it used to be?” says Christopher J. Mayer, a Columbia Business School economist.

The refinancing equation is changing, too. Thanks to rock-bottom interest rates and liberal lending terms for Federal Housing Administration loans, a person who plunks down cash to retire a higher-rate mortgage might be able to reduce his monthly payments, even as he shortens his loan term to 20, 15 or 10 years.

In the past, financial planners typically recommended that homeowners devote as little cash to real estate as possible, and to invest it in the financial markets instead. But with stocks essentially where they were 11 years ago and market volatility seemingly on the rise, people are rethinking that wisdom. Devoting extra cash to repay a mortgage early is among the safest ways to produce an investment return.

“At this point,” says Jay Brinkmann, chief economist of the Mortgage Bankers Association in Washington, “if they don’t have anything else that is bringing a tremendous return, then they are buying themselves an annuity by paying their house off sooner than they needed to.”

During the fourth quarter of 2009, 33% of refinancings were of the cash-in variety, the highest percentage since Freddie Mac began tracking the characteristics of refinance transactions in 1985. Figures for the second quarter are due next week.

“Historically high percentages of borrowers are paying down their principal when they refinance their mortgages,” says Brad German, a Freddie Mac spokesman.

It helps that interest rates are lower than they have been in decades. The average rate on a 30-year fixed-rate loan was about 4.74% on July 21, according to Bankrate.com. That is down from 5.26% in January. Rates on 15-year loans averaged about 4.18%.

The Mortgage Bankers Association said Wednesday that low interest rates sent the volume of mortgage applications 7.6% higher during the week ended July 16. Purchase applications increased for just the second time since the expiration of a temporary federal tax break in May. Refinance applications grew 8.6%, to the highest level since May 2009.

The attractive terms are spurring people like Scott Ayler, 35 years old, into action. He and his wife, Jaclyn, 33, recently decided to trade up to a larger home in their native Denver, despite taking a loss on their current house. In 2004, they paid $234,000 for a three-bedroom, 2½-bath house builtthat same year in Green Valley Ranch, a subdivision that has among the highest foreclosure rates in the city and lacks upscale amenities. They are in contract to sell the home for about $204,000.

Their new home, built this year, cost about $323,000, comes with four bedrooms and three baths, and sits on a corner lot overlooking a reservoir. The house, which was initially listed at $379,000, is in Denver’s desirable Cherry Creek area, known for excellent schools, plentiful amenities and few foreclosures.

With $195,000 remaining on their original 6.625%, 30-year fixed-rate loan, the Aylers estimate their total paper loss will be around $45,000. They are putting down only $11,500 on the new house. But because the new FHA loan carries a 4.5% rate, their monthly payment will rise by only $290 a month.

They say they expect better price appreciation in their new home. And with a young daughter and plans for another child, they need more space anyway.

“We don’t want to wait for the market to come back,” says Mr. Ayler, general counsel for an energy company. “We wanted a better quality of life now.”

Of course, many homeowners in states like Arizona, Florida and Michigan are seriously underwater, having overpaid for houses now worth as little as half their value at the market’s peak. Making up that yawning gap and scraping up additional cash for a new down payment is beyond their means.

Some of those people are going to extremes by engaging in “strategic defaults,” a highly controversial strategy in which they stop paying their mortgages and go into foreclosure to get out of their obligations. But while cutting losses on a bad housing investment might seem liberating, it can stain a person’s credit report for years.

The vast majority of homeowners remain reluctant to sell their primary residence at a loss, perhaps irrationally so. In a study of seller behavior in condominium transactions in downtown Boston from 1990 to 1997, economists David Genesove of Hebrew University in Jerusalem and Prof. Mayer of Columbia showed that sellers were so “averse to nominal losses” that it affected their behavior. Those who were selling their homes in down markets and faced the possibility of nominal losses kept their homes on the market for much longer than other sellers, in some cases to their detriment.

“Loss aversion is a very, very strong force,” Prof. Mayer says. “People don’t like to sell their homes for less than they paid for it.”

But, he adds: “Why should it matter? If you sell a home for less than you pay for it, you would buy for less, too.”

Others are coming around to that view. In Minneapolis, real-estate agent Jason Walgrave says he recently helped a couple buy a 2,800 square-foot home in nearby Plymouth, Minn., an affluent suburb, for $325,000. To get there, they sold for $175,000 a 1,500 square-foot house for which they had paid $190,000 in 2005. Their existing home is financed with a 7.5% mortgage; they will get 4.5% on the new one.

The couple is bringing $25,000 to the closing table to pay off the old loan and closing costs. “They want to take advantage of the bigger house at a lower price and the lower interest rate,” Mr. Walgrave says. Now, for an extra $390 a month, they are getting almost twice as much house.

Just as old beliefs about selling houses are being upended, the conventional wisdom surrounding refinancing is changing, too. Time was when the only question about a refinance deal was how much money the homeowner could take out of the house. From the 1980s through the mid-2000s, the so-called cash-out refi became an easy way for homeowners to spend beyond their means.

Now, some homeowners are doing the opposite: writing big checks to pay off their old mortgages and taking out new ones with far lower interest rates, shorter repayment terms or both.”

The results from a July survey conducted by Trulia and Harris Interactive suggest that after a long trend toward wanting larger homes, American tastes may be moving in the opposite direction.

As the Trulia Blog puts it:

Americans are veering away from the “McMansions” that had grown popular before the recession. Those American adults for whom home ownership is part of the American Dream displayed a preference for smaller homes, with only 9 percent saying their ideal home size is more than 3,200 square feet- the same number of who said they’d like their home to be between 800 and 1,400 square feet. Fifty-five percent of Americans would prefer a home between 1,401 and 2,600 square feet.

 
But what about the luxury market?  “Small luxury” is nothing new.  There has long been a segment of the market looking for “small luxury,” particularly with modernist homes.  We also saw a luxury downsizing trend that started to appear towards the end of the recent boom. 

Though this trend will likely be most evident in new home construction, it will be interesting to see how this plays out in the luxury market in general.  

What do you think?  Are you seeing this in you luxury markets?

Often times we are asked about the real property tax rates on Oahu.  Each county is different.

Here’s the Oahu Real Property Tax Rates for July 2010 to June 2011.

The real property tax rates per one thousand dollars of net taxable assessed valuation.  The property is classified upon its highest and best use.  If you are using your property as your principal residence, don’t forget to file for your homeowner’s exemption by the end of the year.  The homeowner’s exemption is $80,00 if you are under 65 years of age and $120,000 fro those 65 years of age and older.  Therefore, if your house value is assessed at $500,000, with a homeowner’s exemption, it would bring the value down to $380,000 if you are 65 or older.  At a rate of $3.29 / $1,000 of the assessed value, your property taxes for the entire year would only be $1,250.20. 

If it seems overwhelming don’t worry about it.  Douglas/Christopher will assist clients with filing their Homeowners Tax Exemption Paperwork after close of escrow as part of our buyer-client services we offer.

Known for his Japanese cooking on cooking show Iron Chef and Iron Chef America, Chef Masaharu Morimoto will be opening a restaurant in Waikiki.

Morimoto Waikiki, is looking to hire more than 120 people to fill in various front and back house positions. People that are interested can apply on Thursday from 8:00AM to 6:00PM at the Ilikai Hotel. Once construction is completed, the restaurant will reside right next to the Ilikai Hotel.

New hires will be able to work side by side with the famous chef.

“Chef Morimoto is going to be over here for our training process so as our opening team members learn a lot of his signature recipes, he’ll be here to oversee it as well,” said Morimoto Waikiki Executive Chef, Jojo Vasquez.

There is no exact date of when the restaurant will open but training starts at the end of August or early September.

Since New Edition Hotel, a high-end Marriot project, and located right between the Ilikai Apartments Condos and Ilikai Marina Condos, this luxury resort facility is considered a real bonus to condo owners there. To view Ilikai Apartments condo listings and Ilikai Marina condo listings, please visit our website at www.HNLCondos.com.

 Perhaps the most notable railway in the nation, given both its advanced stage of development and its geographical quirkiness, is the planned light rail line to serve metropolitan Honolulu.

This will be constructed around the edge of Pearl Harbour linking Kapolei on the western side of the city, through the downtown area, ending up at Ala Moana near Waikiki. The city has tried for decades to build a rapid transit line, all of which have ended in failure, in spite of the recognised benefits, whether they be environmental or simply to reduce traffic, of getting cars off the road. Now, after all this time, the 20 mile elevated railway will at last be built. In spite of the naysayers, who claim that no one will use the train, because Americans love their cars.

The estimate is that the Honolulu train will carry up to 6,000 passengers an hour across the city. That’s a lot of people and hopefully cars off the roads and highways!  

In a move that sends either shivers of delight or shudders of loathing among fans of Hawaii, Disney is set to open its first resort in Oahu next year.

The 800-plus-unit property, dubbed “Aulani, a Disney Resort & Spa,” is designed as a Polynesian village (albeit one with high-rise towers) that will include hotel rooms and two-bedroom Disney Vacation Club Villas.

The 8.5-hectare resort is being built in Ko Olina, a golf and vacation development that already has a Marriott resort and a man-made beach carved out of the rocky coastline.

Aulani is a different kind of development for Disney, the first that isn’t linked to a theme park or its cruise line. The hotel will be far from the famous tourist areas and beaches of Waikiki, which is on the other side of Honolulu, to the east, near Diamond Head. Ko Olina is the kind of self-contained environment Disney likes for many of its developments.

In a video presentation posted on YouTube, Joe Rohde, Disney’s “executive designer and vice president, creative,” explained the thinking behind the new resort.

“Now the word ‘aulani’ specifically means a messenger of a chief … but when you use it to apply to a place like we are making, it means the place is going to speak, to speak on behalf of something greater than itself. In this case, that greater thing is Hawaiian culture.”

The YouTube video is typical of the buzz-building word-of-mouth campaign Disney has put together for Aulani. Members of D23, the Disney super fan club, were invited to preview the project at a presentation June 30 in Anaheim, Calif.

Word was released through a Disney blog that it would begin accepting reservations for the as-yet-unfinished hotel beginning Aug. 2.

Customers will have to wait awhile to actually visit — the resort isn’t going to open its doors until Aug. 29, 2011. I have to wonder why a family-oriented product like a Disney resort would open just as the school year is resuming.

The images and video show a resort that will include an A-frame entryway that echoes the Polynesian resort at Disney World in Orlando, Fla. A centerpiece of the Hawaii project will be a large fake volcano designed by Disney’s “imagineers” to be embedded with subtle images of culturally significant Hawaiian animals and legends. It’s the centerpiece of the water park portion of the property.

There will representations of menehune, the mythical small people of Hawaiian culture who were said to come out at night to build structures (the Menehune Ditch on Kauai is the most famous example). The menehune will be the Hawaiian resort’s version of “hidden Mickeys” — tucked away in spots around the property where children can find them in a kind of hide-and-seek visual treasure hunt. The hotel will have a pool and water play area, a “lazy river” for tubing, a snorkeling lagoon, a children’s club, restaurants and perhaps the key — a convention center.

The Hawaii property also makes sense because the islands are popular vacation destinations for two of Disney’s most loyal clienteles — the West Coast of the United States, and Japan (which has two Disney theme parks). The Aulani website has pages in English and Japanese.

Disney is reliably sure-footed with its plans, though its success is usually in building a fantasy world removed from reality. An African adventure park in Florida or a lodge in Anaheim that looks like it was teleported from Yellowstone National Park. Its one certifiable dud — the original version of Disney’s California Adventure in Anaheim — represented California culture to a California audience.

Much of Rohde’s Imagineering work has been in Disney’s Florida properties, where over-the-top design is a welcome part of building fantasy worlds. He grew up in Hawaii, so he knows Oahu isn’t Orlando. A resort that incorporates Polynesian design is a welcome addition to the soulless tower blocks that have marked much of hotel development in recent decades.

But Rohde is upping the stakes, and Disney could be in danger of overreach by, as Rohde put it, speaking “on behalf of something greater than itself.”

An overblown, pretentious presentation of Hawaiian culture would attract a lot of criticism. Disney has shown its ability to go the extra mile for authenticity when dealing with Hawaii, sending a team of artists to research the plantation-era buildings in Hanapepe on Kauai to use as a model for the town in its “Lilo & Stitch” movies and series.

The danger here is that Disney will create a cartoonish version of Hawaii — in Hawaii. We’ll stay tuned to see how the property shapes up. Will it be creative or kitschy? Disney is hoping for big things. In the video, Rohde says Aulani will be a place where “people will come back again and again.”