Kilauea, the youngest and one most active of the island’s volcanoes, is embedded in the eastern flanks of the much larger Mauna Loa, and is lacking in a distinctive “stand alone” mountain profile. It generally looks more like a huge open pit, resembling an open pit mine, but with wisps and plumes of steam coming up here and there…although it has occasionally demonstrated some spectacular lava fountains! The Pu’u O’o eruption, which began in 1983, continues to this day, with lava flowing into the sea and giving us some magnificent views of live lava. Lots of dollars are spent on helicopter tours showcasing the spectacular might of Pele, the occasionally temperamental goddess of fire, lightning, wind and volcanoes. (Pele is said to reside in the fire pit called Halemaʻumaʻu crater, at the summit caldera of Kīlauea, which is one of the Earth’s most active volcanoes; but her domain encompasses all volcanic activity on the Big Island of Hawaii. Every incident with a volcanic eruption in Hawaii is said to be Pele’s way of expressing her longing to be with her true love. But Pele’s tale is another story for another time.)

Surprising to most people is the fact that the Kona area is built on the slopes of Hualalai, which is still active, with its last eruption in 1801! It is known as a classic shield volcano (sort of like a child’s drawing of a volcano) with a summit caldera. If one plans properly, it is possible to organize a four-wheel drive excursion to the top, but it is a tough drive, and by the time one reaches the summit, the clouds have usually settled down, making it impossible to see what must be a spectacular view…

Kohala is the oldest of our volcanoes – as is demonstrated by the extreme erosion that has created deep canyons including one of the most beautiful places on our island, Waipio Valley. Waipio Valley is accessible via a surprisingly steep, one lane road leading to the collection of local homes and farms on the valley floor. At the end of the valley, falling hundreds of feet is Hi’ilawe, an impressive waterfall made famous in story and song. For a beautiful drive, take the road over the Kohala summit from Hawi to Kamuela!

Mauna Kea is a story all its own. With an elevation of 13,796 feet (that’s 4.205 miles!), this dormant volcano is the tallest in the state and is home to a number of famous telescopes (yet another story), placed there because the air is so clear and there is very little ambient light in the area. (Factoid: If you measure Mauna Kea from its base on the ocean floor, it is the taller than Mount Everest at 33,500 feet! Yep, true!) Because of its height and location, you will often see snow on the summit, and locals love to drive up and ski, sled and play, then drive down to town with a truckload of snow! Mauna Kea is also reported to be the home of Poliahu, Pele’s sister, goddess of snow.

Mauna Loa sort of just sits there and makes up a large part of our island. It is the largest volcano on earth in terms of volume and area covered. It is an active shield volcano with a volume estimated at approximately 18,000 cubic miles, although its peak is about 120 feet lower than that of its neighbor, Mauna Kea. The Hawaiian name “Mauna Loa” means “Long Mountain”, and its most recent eruption was in 1984. No fatalities with that one, but eruptions in 1926 and 1950 destroyed villages – and Hilo is built on its lava flows from the late 19th century.

And yes, we are comfortable here. We never really think about the power we live on day to day. Occasional rumblings and shakings, but it is the Big Island, and its home.

Like many of you, I recently heard Steve Harney speak to a packed ballroom at the 2012 Windermere Symposium. I had the distinct pleasure of proctoring the class and felt myself being as much the student as the class leader. Steve Harney is a housing industry expert who travels the country speaking to real estate professionals and his message is clear: strongly encourage buyers and sellers to get off the fence—especially if they want to avoid more marketplace competition over the next few months. Or, as Harney put it, the valve in the pipe is about to be cracked wide open.

The “valve” he refers to represents the banks’ indecisiveness. The “water” behind the valve is their stockpile of foreclosed homes, which has been growing like crazy. According to Harney, the reason for this stockpile is that banks have been in a state of limbo this past year about what to do with repossessed houses. They have mostly held onto these properties as not to add to the nation’s oversupply of homes for sale. But the banks knew that a time would come in the housing market when, as Harney put it, “we can keep the water flowing without flooding the valley.” He indicated that the nation has hit that number, as prices have finally reached a reasonable level of stabilization.

According to a 54-city survey that Harney recently studied, home prices dropped 1.7% in 2011, which in his opinion, indicates general price stabilizing. But before we all break into applause, it’s important to remember that while the banks were waiting for a sign of stability before releasing their holdings, they were simultaneously foreclosing on new properties at a rapid pace. “In August [2011], the number of houses banks took back was up 49% over the year before, and September [2011] was the greatest month in history for repossessions,” Harney said. That’s bad for individual homeowners, of course, but necessary in Harney’s view or the housing market to heal itself.

With the general agreement that the market has hit some long-awaited neutral spot, Harney believes that the banks have their hand on the aforementioned valve. He, among others, expects that valve to open up by second quarter of 2012, as lenders push anywhere from three million (as forecasted by foreclosure-data firm RealtyTrac) to eight million (as forecasted by Morgan Stanley) foreclosed homes onto the market.

As a result, Harney predicts that the growing inventory should push prices down 5% to 8%. He also believes that the worst is generally over for the market, and that the inventory mess and lending issues will work themselves out in 18 months (or so) as pent-up buyer demand begins to reassert itself. Meanwhile, he added that selling earlier this year will probably net a better return than later. “If you have a $400,000 house, and the price drops 5%, you’ve just lost $20,000,” he said.

But what does all of this mean for buyers? Why should they buy now if the prices are going to drop further later in the year? Harney good-naturedly applied a kind of logic that seems so logical to the real estate industry, but probably drives economists crazy: That it’s always a good time to buy or sell.

“There’s no good news or bad news, just news,” Harney said. “Every time a house rises in value, there’s a person who makes money and a person who says, ‘Darn!’ And every time a house loses value, there’s a person who says, ‘Darn!’ and a person who says, ‘I got a steal!”‘ In other words, there are pros and cons to every market condition.

Harney added that buyers should take a look at those recent charts that show mortgage interest rates creeping up and consider how much it might cost them to wait. According to Harney, “That cost is going to go up, even as prices go down.”

Personally, after leaving Steve Harney’s three-hour session, I’ve never felt more confident in our market and our industry. I think we can all agree; real estate sales are on their way back!

NAR’s 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, shows investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.

Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period. Any government program to sell REO inventory in bulk to large institutional companies should be limited to small geographic areas. Even where alternatives are needed, it’s best to rely on the expertise of local businesses, nonprofit organizations and government,” he said.

All-cash purchases have become fairly common in the investment- and vacation-home market during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.

“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who aren’t hesitant to use cash,” Yun said. Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent.

“Given the tight credit in recent years, many would-be normal home buyers for owner occupancy declined,” Yun said.

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, while the median vacation-home price was $121,300, down 19.1 percent from $150,000 in 2010.
Investment-home buyers in 2011 had a median age of 50, earned $86,100 and bought a home that was relatively close to their primary residence – a median distance of 25 miles, although 30 percent were more than 100 miles away.

“The share of investment buyers who flipped property remained low in 2011, and many of those homes likely were renovated before reselling,” Yun said. Five percent of homes purchased by investment buyers last year have already been resold, up from 2 percent in 2010. The typical investment buyer plans to hold the property for a median of 5 years, down from 10 years for buyers in 2010.

The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.

Lifestyle factors have consistently been the primary motivation for vacation-home buyers, while the desire for rental income drives investment purchases. Vacation homes purchased last year were more likely to be in suburban or rural areas; investment homes were concentrated in suburban locations.

Eighty-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, and only 22 percent plan to rent to others.

Half of investment buyers said they purchased primarily to generate rental income, and 34 percent wanted to diversify their investments or saw a good investment opportunity.

Sixteen percent of vacation buyers and 14 percent of investment buyers purchased the property for a family member, friend or relative to use. In many cases the home is intended for a son or daughter to use while attending school.

Eight out of 10 second-home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one-third of vacation-home buyers.
Currently, 42.1 million people in the U.S. are ages 50-59 – a group that has dominated second-home sales since the middle part of the past decade and established records. An additional 43.5 million people are 40-49 years old, while another 40.2 million are 30-39.

“Given that the number of people who are in their 40s is somewhat larger than the 50-somethings, the long-term demographic demand for purchasing vacation homes is favorable because these younger households are likely to enter the market as their desire for these kinds of properties grows, and individual circumstances allow,” Yun said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

However if you are going to be hanging around town, there are some other local favorites that are off the beaten path. You might want to be adventurous and try them – you will see lots of local people enjoying what we call “ono grinds”, meaning GOOD FOOD! In Old Industrial Area, i.e., in the vicinity of Kaiwi Drive, you could wander into the aptly named Killer Tacos, where the lunch special is two tacos and a drink for a very nominal price – try the kalua pig tacos, or a short board burrito with pig and black beans – truly KILLER! And there’s Island Natural Foods with a healthy and yet delicious buffet, and a wide-ranging “grab it and go” selection with sandwiches, wraps, salads, individual quiches, and tempting dessert. A popular favorite is a turkey and grilled veggie wrap with peanut sauce…

In the same general area, well advertised and very popular, is Kona Brewery, or Kona Brew Pub. And yes, it is a functioning brewery – but also has an excellent restaurant which features pizzas, but also has sandwiches, salads, and Italian specialties. Do try one of their beers – it is a fast-growing, very popular brand – or order the beer sampler!

Moving on into town, you will come upon Tracy’s Tasties, across the street from the 76 station. Simply defies description. Huge sandwiches, decadent and delicious fresh baked desserts and cookies, smoothies, and some sort of excellent special of the day. Very popular with those of us who work around town – lots of parking and just good, healthy food (as long as you skip the desserts, of course)! Or you can walk about a half block from there and check out Tacos El Unico for authentic Mexican food – it’s down the alley behind Kuakini Towers, towards Alii Drive.

Are you ready to go yet? All this food talk is generating hunger pangs! We’ve missed a lot of places, and there are lots more hidden “local favorites”, but they will have to wait for another day because it’s lunch time!

WASHINGTON (Reuters) – The relentless decline in home prices is nearing an end and prices should rise for the first time in seven years in 2013, but a possible new wave of foreclosures could threaten the recovery, according a Reuters poll of economists.
The median forecast of 24 economists polled by Reuters was for the S&P/Case-Shiller 20-city home price index to end the year unchanged. That was the same finding back in January for this house price gauge, which covers 20 cities.

“We are expecting a gradual improvement, but if we get a big wave of new foreclosures coming to the market, price declines could be even greater,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York. The survey forecast the S&P/Case-Shiller home price index rising 2.0 percent next year, up from 1.5 percent in the January survey.

The housing market’s collapse pushed the economy into its longest and deepest recession since the 1930s. Historically, housing has led the economy out of recession, but it has been the weakest link in the recovery that started in mid-2009.
While residential construction accounts for a mere 2.3 percent of gross domestic product, home prices have an oversized reach in the economy, influencing a wide range of consumption decisions by households.

House prices have so far fallen about 32 percent from their peak at the end of 2005, and an estimated 11 million Americans now owe more on their homes than they are worth. A resulting tide of foreclosures has held back the housing market’s recovery.

The survey predicted about 1.5 million foreclosed properties will come on to the market this year. While there is no comparison for this figure, most analysts believe the foreclosure wave has either peaked or is close to topping out.

Given that foreclosures and the accompanying fear of further price declines are the main obstacles to any housing market recovery, few analysts say that further purchases of mortgage backed securities by the Federal Reserve will help.

Fed officials meet on April 24 and 25 to debate whether further steps are needed to drive borrowing costs lower to spur stronger economic growth. Mortgage rates are already near record lows and house affordability is the best in history. “The problem with the housing market is not necessarily that mortgages are expensive,” said Millan Mulraine, a senior macro Strategist at TD Securities in New York.

“It’s more the expectation that prices may continue to fall and cause a lot of potential buyers to sit on the sidelines to wait for more attractive entry points. I don’t think there is lot more mileage to be achieved from MBS purchases.” Further MBS purchases by the U.S. central bank, however, could help keep mortgage rates low as the economy’s recovery gains momentum.

The survey forecast the 30-year mortgage rate averaging 4.00 percent in 2012, down from 4.15 percent in the January poll. Although job growth slowed in March, the labor market is expected to continue strengthening this year.

That should help to lift home sales. Sales of previously owned homes are expected to register an annualized 4.70 million unit annual pace in both the second and third quarters of this year before topping at 4.80 million units in the fourth quarter. That compares to a rate of 4.60 million units and 4.70 million units in the second and third quarter respectively in the January survey.

“This gradual healing is encouraging, but we must tread carefully as the housing market is still far from a robust recovery,” Michelle Meyer, an economist at Bank of America Merrill Lynch in New York.

On the makai (ocean) side of the runway, there are white sandy and rocky beaches, with perfect wading pools for keiki (children), picnic tables, some covered some not, barbeques, restrooms, trees for shade, and the vivid blue Kona ocean a few steps further. On the mauka (mountain) side of the runway, local citizens, various civic groups and individuals, with lots of hours of hot, sweaty, back-breaking labor, have created an attractive walking and jogging trail out of virtually nothing but arid, bare land. Called Maka E’o, (sharp eye), the path is delightfully landscaped, clean, neat and tidy, with shade trees, an irrigation system for the tropical plants and trees, and even patches of lawn here and there. There is some physical fitness equipment in place, stretching posts, shaded benches, and an almost park-like setting for relaxing at the north end of the area. There are drinking fountains too, because it can be pretty warm there – particularly if you are exercising!

Also in the area is a new hale (house) for outrigger canoe storage, a rollerblade hockey rink, and the old terminal building – now being used as a very nice, functional meeting place for community events. Close by to the south are soccer fields, baseball diamonds (the big lights you see at night), a gym and a gorgeous, sparkling swimming pool.

All of this can be found at the north end of Kuakini Street. Tons of parking so why not put together a picnic and go enjoy the beach or go for a walk or jog? It is all there waiting for you just a few minutes from the center of town!

One of the reasons that Hawaiians are so proud of their flag is that its creation is not only attributed to King Kamehameha I, it symbolizes his conquering and uniting of the eight major Hawaiian Islands. Rumors and stories abound about the actual origin of the flag, but most historians agree that political and economic relations with Great Britain and the United States were very important to King Kamehameha, and the flag is generally seen as a melding of the two country’s flags.

In 1816, Kamehameha the Great commissioned the design. The upper left corner is a duplicate of the Union Flag, symbolizing the influence of the British Empire. The Union Flag also, conveniently, represents the symbol for the alii (royalty), with two crossed spears and an upright spear. The stripes have their own tale to tell, since they represent the eight major islands, Oahu, Maui, Lanai, Kauai, Kahoolawe, Molokai, Niihau, and Hawaii (The Big Island). Rumor has it that the color sequence was a mistake; the stripes were supposed to alternate red, white, and blue, but instead alternate white, red, blue.

We here in Hawaii have the distinction of being the only state which was formerly a monarchy, a recognized sovereign kingdom. (And we are the only state with a duly recognized royal palace, Iolani Palace in Honolulu!) Present day Hawaiians have a lot of pride in their flag, because to many it is a symbol of independence, it represents the opposed overthrow of the monarchy, and many native Hawaiians yet today pledge their allegiance to Hawaii as a sovereign nation.

In 1843, after more political scuffles, Kamehameha III spoke the words that were to become the state motto, “Ua mau ke ea ka aina i ka pono”, or THE LIFE OF THE LAND IS PERPETUATED IN RIGHTEOUSNESS. Our Hawaiian flag has flown proudly for more than 180 years, and binds us all together in these beautiful islands we call home.

Each year at this time the hula schools, or halau, begin the final preparations for this spectacular four day series of performances. The first performance is Wednesday, April 11, and it is a free exhibition of hula, international performers and music.

Thursday evening is the Miss Aloha Hula event, featuring solo artists performing hula kahiko (ancient style), hula auana (modern style dances), and oli (chants). Friday evening brings both male and female groups to the stage performing only hula kahiko, and Saturday brings both male and female groups to perform only hula auana. Afterwards there are the entertaining awards presentations.

Throughout the week there are events all over the Hilo area: craft fairs, open air markets, music, flower markets and parades. You may see the competitors themselves working feverishly to complete their costumes in time for their performances. All of their body adornments are made by the participants, including their billowing ti-leaf skirts. Some halau even travel to the places being celebrated in their dances to “gather” materials and honor the place or particular god or goddess, such as going to the top of Mauna Kea to honor Poliahu in her home there, or Pele, Poliahu’s sister, in Kilauea volcano.

When the halau finally take the stage, the performance is simply stunning. First the musicians take their place and then the group will move out onto the raised platform serving as a stage, moving in faultless unison and precision. Since the dancers are usually spaced close together, they literally move as one – hands, feet, magnificent costumes, flowing long hair, to give us their interpretation of a particular person, place or thing that they are glorifying with their dance. The audience is totally silent taking in this difficult feat, accompanied by whatever music is appropriate for that particular dance. Simply breathtaking!

If you have ever been lucky enough to have a ticket to the dance performances, you will never forget it. We are fortunate to have the halau and their kumu (teacher, leader) perpetuating the culture, songs and dances of old Hawaii and passing them down to our young people and out to the world!

According to the Wild Dolphin Foundation, the dolphins feed at night and then come into shore to regroup, greet their buddies and play for a bit before going to rest, thus the early morning departure. As you board your boat, the friendly guides will tell you about snorkeling, fit you or help you with your gear, tell you tales about the dolphins and make you feel comfortable visiting their dolphin friends in their own habitat. When you reach “the right place”, fairly close inshore off of the Kona International Airport, the captain will shout, “Here they come!”, and you will gear up and slide into the water. What an awesome sight! Literally hundreds and hundreds of dolphins, easily within arm’s reach! If you keep your arms tucked in close to your sides and just kick gently, they will approach and swim alongside of you – obviously checking out these funny looking newcomers to the party! The mothers have their babies tucked closely alongside, and you will share the fun as the older ones practice their “porpoising” and spins. What a unique experience to be in the water with them as welcome members of their group!

Eventually they head to their favorite resting spot as we follow along, usually a bay with a sandy bottom, which enables them to more easily see predators such as sharks. The group will tighten up and actually synchronize their breathing and fall asleep, safe within their group of friends. When they awaken it seems that the sheer joy of being alive in our beautiful clear water makes them play and they will appear again on the surface for us to enjoy their beauty.

A very popular and visible “local”, John is usually found playing alone in a bar or restaurant, occasionally joined by his wife Hope who is a gifted hula dancer, so this was a new experience for him in many ways. When he performs alone, he can play what he wishes, in whatever order he wishes, but with a symphony orchestra backing him, he had to conform to a play list, and to set arrangements of his songs. And since John doesn’t read music, he had to trust his memory to play each song the way it was arranged. But there were no slip-ups! Actually, those who have been long-time fans of John’s were overjoyed with the outcome. His music, which continually speaks of his love for his island home and his wife and family, was enhanced by the beauty of Herb Mahelona’s arrangements of John’s songs, and delighted the audience!

Of all of John’s many recordings, seven were nominated for Na Hoku Hano Hano Awards (“local kine” Grammy awards), and he continues to win other prestigious awards. He is also the recipient of a Grammy for his performance as a contributing artist on Hawaii’s first Grammy Award for Best Hawaiian Music Album, entitled “Slack-key Guitar Vol. 2”. If you happen to walk through one of our restaurants or shopping centers and see a fellow in an aloha shirt, with white hair and a neat white beard, playing beautiful music that sings to your soul, that is probably John Keawe. When he takes a break, go up and say hello to this very nice, kind man who personifies our aloha spirit. Mahalo nui, John!