James Pycha's REMAX Kauai Real Estate Blog

Tis the Season to Be Jolly

James Pycha (R) - REMAX KAUAI — Sat, 20 Dec 2008 12:45:27 -0600

Princeville Kauai Condominium Mean Sales Price

James Pycha (R) - REMAX KAUAI — Sat, 29 Nov 2008 18:56:22 -0600

Unlike Poipu Condominiums that experienced a 35% spike from 2004 to 2006, Princeville's Mean Sales Price increase has been more gradual. Consequently, the back-pedaling of equity values in the Princeville condominium market, therefore, shows statistically a much less less-dramatic contraction. This phenomenon may also be attributed to the consistently higher number of condominiums on the market in Princeville over Poipu that moderates such market fluctuations.

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How Much ?? = $8,500,000,000,000

James Pycha (R) - REMAX KAUAI — Sat, 29 Nov 2008 18:03:54 -0600

BIG BAILOUT BUCKS

HUGE DOLLARS

Federal bailouts, equity buys into banks and investment houses, liquidity infusions by the U.S. Federal Reserve Bank, loan guarantees and economic stimulus checks now total $8.5 trillion, according to various estimates.

That equates to about 60 percent of U.S. gross domestic product, which will come in around $14 trillion, according to economists.

The $8.5 trillion total in bailouts is nearly twice the size of annual GDP in Japan and accounts for more than the annual GDP of every national economy except the U.S., European Union and China, according to federal data.

The $8.5 trillion includes the $700 billion bank and Wall Street bailout; federal takeovers of Fannie Mae and Freddie Mac; individualized bailouts for Citigroup and American International Group; and various cash infusions into financial and lending markets by the Fed. The $700 billion includes federal equity buys into Bank of America Corp., JP Morgan Chase & Co., Goldman Sachs Group Inc. and other financial institutions.

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Poipu Beach Kauai Condominium Mean Sales Prices

James Pycha (R) - REMAX KAUAI — Sat, 29 Nov 2008 15:17:52 -0600

The National Association of Realtors projects that as the US economy continues to back-pedal, Real Estate prices nationally will soon contract to 2004 levels. Based on current figures as shown on the graph below, Poipu Beach condo prices have already returned to those levels. This suggests that Poipu Condominium prices may contract even further (2003 levels) since they are essentially second home investment properties.

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The Patient Is Not Responding !!

James Pycha (R) - REMAX KAUAI — Sat, 29 Nov 2008 14:12:16 -0600

Seeing the threat to the world economy’s vital functions, the policymakers have been working overtime. Interest rates have been cut dramatically. American rates are already down to 1%; Britain’s are at a 50-year low; and this week China’s central bank lopped 108 basis points off its main policy rate. Hundreds of billions have been pumped into banks and financial markets. Many financial institutions have been bailed out: the rescue of the once mighty Citigroup is merely the latest unthinkable to happen. Despite all this, the patient has not responded. This is partly because some traditional remedies, such as looser monetary policy, are weakened in a credit crunch. It is also because the doctors have been ham-fisted: look at Hank Paulson’s changes of mind about whether to use America’s $700 billion rescue fund to recapitalise banks or to buy toxic assets. In addition, though, a lot of policy has been far too timid. Halting the world economy’s decline will demand something rather bolder than anything seen so far in this crisis.

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Mortgage Dilemma Exists

James Pycha (R) - REMAX KAUAI — Fri, 28 Nov 2008 22:10:25 -0600

The current scarcity of funds available for mortgage lending creates a chicken-and-egg situation,

1. Investors who provide funding for home loans don't want to commit more money until they believe the housing market is getting better.

2. But it's hard for the housing market to rebound as long as mortgage credit is tight.

3. Lower prices eventually will break this impasse, by luring buyers back into the market and reassuring investors that the market is finding a bottom.

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Kauai Real Estate - Sold Last TEN Days

James Pycha (R) - REMAX KAUAI — Fri, 28 Nov 2008 21:56:49 -0600

Taxkey	MLS#	Sold Price	Sold Date	Type	Days on Market	Subdivision
4-2-8-17-10-47	199947	$200,000	11/20/2008	Condo	410	Koloa Beach
4-2-8-17-26-129	207507	$700,000	11/26/2008	Condo	224	Koloa Beach
4-5-4-5-18-97	211709	$386,000	11/21/2008	Condo	75	Princeville
4-2-3-24-54	206283	$250,000	11/21/2008	Land	237	Kakela Makai
4-3-3-17-76	202750	$230,000	11/26/2008	Land	346	Pikake Subdivision
4-3-3-17-127	215908	$253,000	11/25/2008	Land	38	Pikake Ph II Subd
4-2-1-9-40	215159	$435,000	11/21/2008	Res	15	Eleele Nani Subd
4-3-6-20-26	203163	$615,000	11/25/2008	Res	269	Molokoa Subd
4-4-1-11-9	213848	$520,000	11/20/2008	Res	72	Wailua House Lots
4-4-6-15-13-5	214851	$305,000	11/20/2008	Res	71	Kapaa House Lots
4-4-6-17-127	214848	$422,000	11/20/2008	Res	1	Ilima Gardens
4-5-3-11-46	197400	$1,350,000	11/28/2008	Res	509	Queen Emma Bluffs
4-5-5-3-15	216570	$10,500,000	11/26/2008	Res	33	Hanalei
4-5-6-4-26	202631	$2,740,000	11/26/2008	Res	364	Hanalei
Total	$18,906,000			190	<< Average

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BIG BAIL-OUT is Bigger Than You Think !!

James Pycha (R) - REMAX KAUAI — Mon, 24 Nov 2008 15:20:38 -0600

There is More Bail-Out Money from Other Sources.

Wall Street analysts, congressional overseers and the media have parsed every detail of the Treasury Department's financial rescue program -- $250 billion and counting.

Largely outside public view, however, the Federal Reserve is lending far more than that amount -- $893 billion, roughly the equivalent of the annual economic output of Mexico -- to help a wide range of institutions weather the economic storm.

As of last week, the Fed's loans included $507 billion to banks, $50 billion to investment firms, $70 billion for money market mutual funds, and $266 billion to companies that use a form of short-term debt called commercial paper. It is considering a new program that would make billions more available to prop up consumer lending: auto loans, credit cards and the like.

In lending these vast sums, the Fed is essentially substituting its own unlimited ability to supply cash for that of private markets, which are not functioning normally. The central bank is even fulfilling some of the original goals of the Treasury Department's $700 billion rescue program by allowing financial institutions to use securities that are difficult to sell as collateral for loans.

"The existing system of lending is broken," said David Shulman, a senior economist at the UCLA Anderson Forecast, which analyzes economic trends. "The Fed is coming in to do that lending. That's why they call it the lender of last resort."

But unlike the Treasury's rescue package, which has elaborate disclosure requirements and oversight mechanisms, the Fed lending is occurring quietly and at the discretion of its five governors, as well as top officials of the 12 regional Fed banks. Timothy F. Geithner, president of the Federal Reserve Bank of New York and the Obama administration's expected nominee for Treasury secretary, has been a leading architect of the new lending programs.

Following a long-standing practice designed to protect investor and depositor confidence in the institutions it deals with, the Fed refuses to name the banks and other companies accessing the cash. It has also declined to specify which assets institutions have pledged as collateral in exchange for loans, a decision that has drawn skeptical questioning from Capitol Hill and at least one lawsuit under the Freedom of Information Act. Fed officials argue that any disclosure along those lines would create a stigma for banks and others that need to borrow from the Fed, making the programs less effective at jump-starting lending.

"There's a concern that if the name is put in the newspaper that such and such bank came to the Fed to borrow overnight for a good reason, that people might begin to worry: Is this bank credit-worthy?" Fed Chairman Ben S. Bernanke told Congress last week. "And that might create a stigma, a problem, and might cause banks to be unwilling to borrow."

Bernanke also said there is little chance taxpayers will lose money on most of that lending, because the central bank lends money only to institutions it views as sound

(Washington Post Today)

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Kauai Real Estate Sales - In Escrow Last 10 Days

James Pycha (R) - REMAX KAUAI — Mon, 24 Nov 2008 09:44:24 -0600

Subdivision	Taxkey	Location	Price	MLS#
Weliweli Heights	4-2-8-20-4-7	Poipu Makai #B2	$800,000	206435
Princeville	4-5-4-5-24-42	Nihilani - Princeville #14C	$619,900	212856
POIPU BEACH ESTATES	4-2-8-31-168	Poipu Beach Est Lot #:168	$500,000	218198
	4-4-5-16-11-1	4841 Lani Rd #A	$129,000	207597
Wailua Homesteads	4-4-2-3-50-1	Kamalu Rd #A	$388,000	215796
Kai Ikena Subdivision	4-2-3-21-53	4063 Oni Pl	$550,000	213599
N & S Olohena	4-4-4-15-3-3	N & S Olohena Lot #:	$1,350,000	216496
Hulu Manu Subd	4-4-6-24-45	5325 Luana St	$395,000	181040
Anini	4-5-3-4-26-1	3591 Anini Rd #A	$999,500	212775
Lihue	4-3-6-10-83-2	2933 Pikake St #2	$309,999	204927
Nonaka Subdivision	4-4-2-22-62	Puupilo Rd	$525,000	210368
Kapaa Meadows Subd	4-4-6-38-75	1605 Kuahale St	$349,000	207429
Kahuna/Waiakea/Kawaihau	4-4-6-6-89-2	1720-B Makalemha Pl #B	$950,000	215846
		TOTAL	$7,865,399

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Timothy Geithner as Treasury Secretary

James Pycha (R) - REMAX KAUAI — Mon, 24 Nov 2008 09:27:24 -0600

Assuming he is nominated Mr Geithner brings two crucial qualities. First, he represents continuity. From the first days of the crisis last year, he has worked hand in glove with Ben Bernanke, the Fed chairman, and Mr Paulson. He can continue to do so while awaiting confirmation. If Citigroup, for example, needs federal help, Mr Geithner will be involved. An unknown when he joined the New York Fed in 2003, he is now a familiar face to the most senior executives on Wall Street and to central bankers and finance ministers overseas.

Second, he represents competence. He has spent more time on financial crises, from Mexico and Thailand to Brazil and Argentina, than probably any other policymaker in office today. Mr Geithner understands better than almost anyone that in crises you throw out the forecast and focus on avoiding low probability events with catastrophic consequences. Such judgments are excruciating: do too little, and you undermine confidence and generate a bigger crisis that needs even bigger policy action. Do too much, and you look panicked and invite blowback from Wall Street, Congress and the press. At times during the crisis Mr Geithner would counsel Mr Bernanke on the importance of the right "ratio of drama to effectiveness".

In normal times, risk aversion damps economic cycles; in a crisis, it accentuates them, leading to withdrawn credit, evaporating liquidity, margin calls, falling asset prices, and more risk aversion. "The brake becomes the accelerator," as he puts it. Indeed, although he worked alongside Mr Paulson on the crisis, he has at times advocated a more aggressive approach. For example, news reports say that he was not comfortable with Mr Paulson's decision to take public money off the table in the ultimately unsuccessful effort to save Lehman Brothers. He has not always got it right: he was the most important architect of the original bail-out of American International Group, an insurer, which in time has proved flawed, requiring significant amendment.

G-20 Update

James Pycha (R) - REMAX KAUAI — Mon, 17 Nov 2008 17:17:13 -0600

As well as promising a "broader policy response" to the current crisis, the G20's leaders laid out a detailed plan for financial reform.
They promised to "strive" for a deal on the stalled Doha round of world trade talks by the end of the year and, more importantly, made a collective pledge not to raise any barriers to trade and investment over the coming year.
Add in the promises made around the gathering's fringes, particularly Japan's pledge to bolster the IMF's kitty by lending it $100 billion, and the weekend yielded enough to justify the traffic jams in Washington, DC-and to mark an important shift in global economic governance.

KAUAI Real Estate Market: CLOSED SALES - Last Ten Days

James Pycha (R) - REMAX KAUAI — Mon, 17 Nov 2008 09:36:26 -0600

Location	Type	Price	Sold Price	List to Sale	Land Area	Living Area	Days on Market	Sold Date
1440 Kanepoohui Rd #2	Land	$265,000	$255,000	96.2%	30,492		57	11/12/2008
7144-N Kahuna Rd #1	Land	$509,000	$480,000	94.3%	99,316		258	11/14/2008
4826-B Alii Rd	Res	$435,000	$435,000	100.0%	14,513	940	0	11/14/2008
3754 Kakela Makai Dr	Res	$779,000	$688,000	88.3%	10,369	1,650	288	11/7/2008
6359 Kipapa Rd	Res	$399,000	$375,000	94.0%	10,672	500	74	11/13/2008
6165 Waipouli Rd #2	Res	$998,000	$879,000	88.1%	87,120	2,630	349	11/13/2008
4362 Ulua St	Res	$595,000	$520,000	87.4%	6,080	1,448	123	11/14/2008
MORE INFO HERE		TOTAL >>	$3,632,000	92.6%	Average >>>		164

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KAUAI Real Estate Market: New Escrows - Last Ten Days

James Pycha (R) - REMAX KAUAI — Mon, 17 Nov 2008 09:23:32 -0600

Subdivision	Location	Price	Type	Days on Market
Nawiliwili-Niumalu	Halelani Village E102	$245,000	Condo	243
Princeville	Nihilani At Princeville #14C	$619,900	Condo	144
Princeville	Nihilani At Princeville #5A	$699,000	Condo	152
Princeville	Nihilani At Princeville #33A	$731,500	Condo	192
Kukui Grove Village-West	2415 Ulu Maika	$975,000	Land	22
Lawai Homesteads	Kua Rd	$350,000	Land	26
Moloaa & Kaapuna Hui Lands	Moloaa & KaapunaL	$445,000	Land	641
Pikake Ph II Subdivision	Pikake Lot #:1732	$267,500	Land	38
Wailua Homesteads	Kamalu Rd #A	$388,000	Land	53
Wailua House Lots	276 Makani Rd	$449,900	Res	52
Hulu Manu Subd	5325 Luana St	$395,000	Res	859
Ilima Gardens/Ota Tract	4811 Ohu Rd	$465,000	Res	10
Queen Emma Bluffs	4140 Aloalii Dr	$1,595,000	Res	516
Kahuna/Waiakea/Kawaihau	1720-B Makalemha Pl #B	$950,000	Res	67
	TOTAL >>	$8,575,800	Average >>	215

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Recent Poipu Land Sales

James Pycha (R) - REMAX KAUAI — Thu, 06 Nov 2008 21:52:44 -0600


Land Area	Location	Price	Price per sq. ft.	Taxkey	Sold Date
12,333	Kukuiula Ph I Lot #:9	$830,475	$67.00	4-2-6-16-9	6/13/2008
9,105	Kukuiula Ph I Lot #:7	$1,125,000	$124.00	4-2-6-16-7	9/17/2008
13,530	Kukuiula Ph I Lot #:51	$1,315,000	$97.00	4-2-6-16-51	7/25/2008
21,474	Kukuiula Ph Iib Lot #:23	$1,680,000	$78.00	4-2-6-18-23	6/13/2008
26,944	Kukuiula Ph Iib Lot #:24	$1,736,000	$64.00	4-2-6-18-24	6/13/2008
20,751	Kukuiula Ph Iib Lot #:22	$1,760,000	$85.00	4-2-6-18-22	6/13/2008
13,482	Poipu Beach Estate Lot #:163	$625,000	$42.00	4-2-8-31-163	9/23/2008
15,744	Poipu Beach Estate Lot #:155	$657,000	$42.00	4-2-8-31-155	9/19/2008
16,208	Poipu Beach Estate Lot #:158	$675,000	$42.00	4-2-8-31-158	9/16/2008
15,824	Poipu Beach Estate Lot #:154	$685,000	$43.00	4-2-8-31-154	9/5/2008
16,540	<<< Averages >>>	$1,108,848	$68.40

Poipu Aina Estate Lots Listed

James Pycha (R) - REMAX KAUAI — Thu, 06 Nov 2008 18:01:13 -0600

Location	Land Area	Acres	Tax Key	Price	List $/SF	Price per Acre
Poipu Aina Estates	128,937	2.96	4-2-8-22-2-1	$950,000	$7.00	$320,947
Poipu Aina Estates	108,464	2.49	4-2-8-22-36-1	$995,000	$9.00	$399,600
Poipu Aina Estates	107,593	2.47	4-2-8-22-31-1	$1,175,000	$11.00	$475,709
Poipu Aina Estates	110,206	2.53	4-2-8-22-31-2	$1,250,000	$11.00	$494,075
Poipu Aina Estates	110,206	2.53	4-2-8-22-32-1	$1,300,000	$12.00	$513,838
Poipu Aina Estates	112,384	2.58	4-2-8-22-32-2	$1,375,000	$12.00	$532,950
Poipu Aina Estates	106,286	2.44	4-2-8-22-34-1	$1,375,000	$13.00	$563,527
Poipu Aina Estates	113,256	2.60	4-2-8-22-34-2	$1,450,000	$13.00	$557,692
Poipu Aina Estates	118,918	2.73	4-2-8-22-33-1	$1,525,000	$13.00	$558,612
Poipu Aina Estates	114,998	2.64	4-2-8-22-33-2	$1,525,000	$13.00	$577,654
Poipu Aina Estates	122,839	2.82	4-2-8-22-33-3	$1,550,000	$13.00	$549,646
Poipu Aina Estates	115,434	2.65	4-2-8-22-33-5	$1,550,000	$13.00	$584,906
Averages	114,127	2.62		$1,335,000	$11.67	$510,763

Poipu Area Home Sales (From June 5, 2008)

James Pycha (R) - REMAX KAUAI — Thu, 06 Nov 2008 17:54:38 -0600

Subdivision	Location	Price	Bed rooms	Bath rooms	Living Area	Sold Price	Sold Date	Price per square foot
Koloa Estates Subdivision	2963 Pua Alani Pl	$1,695,000	6	4.5	4,019	$1,350,000	6/26/2008	$336.00
Koloa	4432 Lawai Beach Rd	$5,900,000	3	2	2,341	$5,650,000	7/7/2008	$2,414.00
Weliweli Houselots	2418 Kipuka St	$799,000	3	2	980	$750,000	6/24/2008	$765.00
Lanai Villas @ Poipu Kai	1691 Kelaukia St	$1,450,000	4	3	2,135	$1,338,000	7/16/2008	$627.00
WAINANI AT POIPU	Wainani #:41(27)	$1,795,000	3	3.5	2,026	$1,650,000	7/3/2008	$814.00
Bayview @ Poipu Kai	2228 Iukika Pl	$1,900,000	5	4	2,950	$1,750,000	6/16/2008	$593.00
Kiahuna Golf Village	5347 Puuone Pl	$1,995,000	3	3	3,124	$1,862,500	6/5/2008	$596.00
Kiahuna Golf Village	2868 Milo Hae Loop	$1,995,000	4	4	3,261	$1,780,000	6/10/2008	$546.00
Kiahuna Golf Village	5314 Opua Pl	$2,100,000	3	3	2,161	$1,700,000	9/5/2008	$787.00
		$2,181,000			2,555	$1,981,167		$830.89

Denial and Acceptance

James Pycha (R) - REMAX KAUAI — Mon, 03 Nov 2008 11:45:36 -0600

Regardless of who becomes our next president, real estate sales will continue to languish until Sellers get over their denial process and adjust prices to levels that will attract Buyers in this market.

This denial stage, although understandable, is irrational and destructive. Sellers must admit that the value of their Kauai real estate, in fact, has dropped and may be less now than what they paid for it 2, 3, 4 years ago.

As property equities fall, Sellers lose value. No one knows how long and how far this "drop" stage will last during this severe global economic contraction. Real estate values will likely reduce further through 2009. The prudent owner (investor) should liquidate now and place their cash proceeds in a certificate of deposit (Now at 4.5% annual return). Under this premise, the negative asset is converted to capital growth. Holding on for a "miracle" is simply unrealistic and foolish. Sellers that refuse to lower their prices cling to unrealistic expectations because of prices seen in 2004-2006. Buyers refuse to pay these prices and believing prices will fall further, wait on the sidelines.

Once the denial process becomes "acceptance," Sellers will begin lowering prices to reasonable levels (for actual market conditions) then, buyers will come off the sidelines and start making offers. Inventory levels will fall and the market will return to a normal level. The completion term of this cycle is anyone's guess. However, the advent of a democratic administration will likely lengthen the cycle. For now, however, Sellers appear to be at the beginning of the acceptance stage. We provide no assistance to our selling clients if we do not strongly advise them to lower their prices significantly enough to actually attract real Buyers now before their negative asset loses more value.

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Kauai Home Sales & Past Recessions

James Pycha (R) - REMAX KAUAI — Sun, 02 Nov 2008 21:17:54 -0600

Start of Recession	Worst two quarters	Change peak-to-trough	Change in unemployment rate*	Quarters in recession	Quarters of slow growth
1948	-3.5	-1.7	3.3	4	0
1953	-4.3	-2.6	3.4	4	5
1957	-7.4	-3.2	3.4	3	8
1960	-2.3	-0.5	1.9	3	4
1969	-1.3	-0.2	2.6	4	10
1973	-3.1	-3.1	4.1	5	8
1980	-4.3	-2.2	2	2	7
1981	-5.6	-2.6	3.3	5	7
1990	-2.5	-1.3	2.4	2	11
2001	-0.1	0.3	2.2	3	11
2008 (projected)	-3	-1.6	3.1	3	12

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World Economy - A wing and a prayer

James Pycha (R) - REMAX KAUAI — Sun, 02 Nov 2008 20:34:20 -0600

FROM THE ECONOMIST:

This credit crunch will be grim, but most emerging markets can avoid catastrophe. The biggest ones are in relatively good shape. The more vulnerable ones can (and should) be helped.

Among the giants, China is in a league of its own, with a $2 trillion arsenal of reserves, a current-account surplus, little connection to foreign banks and a budget surplus that offers lots of room to boost spending. Since the country's leaders have made clear that they will do whatever it takes to cushion growth, China's economy is likely to slow-perhaps to 8%-but not collapse. Although that is not enough to save the world economy, such growth in China would put a floor under commodity prices and help other countries in the emerging world.

The other large economies will be harder hit, but should be able to weather the storm. India has a big budget deficit and many Brazilian firms have a large foreign-currency exposure. But Brazil's economy is diversified and both countries have plenty of reserves to smooth the shift to slower growth. With $550 billion of reserves, Russia ought to be able to stop a run on the rouble. In the short-term at least, the most vulnerable countries are all smaller ones.

There will be pain as tighter credit forces adjustments. But sensible, speedy international assistance would make a big difference. Several emerging countries have asked America's Federal Reserve for liquidity support; some hope that China will bail them out. A better route is surely the IMF, which has huge expertise and some $250 billion to lend. Sadly, borrowing from the fund carries a stigma. That needs to change. The IMF should develop quicker, more flexible financial instruments and minimise the conditions it attaches to loans. Over the past month deft policymaking saw off calamity in the rich world. Now it is time for something similar in the emerging world.

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Kauai Real Estate CLOSED Escrows Last 7 days

James Pycha (R) - REMAX KAUAI — Sun, 02 Nov 2008 20:21:19 -0600

Taxkey	Location	Price	Sold Price	Bdms	Bths	Land Area	Living Area	Days on Market
4-2-8-20-8-22	Poipu Sands #222	$998,500	$910,000	2	2		1,371	283
4-5-9-5-25	05-7834 Kuhio Hwy	$1,995,000	$1,250,000			14,513		415
4-1-2-12-21	4459 Kawailoa St	$369,000	$320,000	3	1.5	7,590	864	203
4-2-1-5-9	4718 Melemele Rd	$429,000	$350,000	3	1.5	11,854	900	116
4-2-5-10-50	3548 Horita Rd	$649,000	$643,000	3	2.5	10,000	1,283	139
4-4-1-14-59	302-A Makani Rd	$395,000	$373,000	3	1	7,620	760	210
4-4-2-6-147	210 Nalomeli Pl	$570,000	$525,000	3	2	8,572	1,553	387
4-5-1-5-128-1	4844-A Wailapa Rd #A	$1,150,000	$1,050,000	4	2	95,832	2,094	95
Total			$5,421,000

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Kauai Real Estate in Escrow Last 7 days

James Pycha (R) - REMAX KAUAI — Sun, 02 Nov 2008 20:12:26 -0600

Location	Price	Bedrooms	Bathrooms	Land Area	Living Area	Days on Market	Contract Date
Hanalei Bay Villas #9	$899,000	2	2.5		1,244	45	10/27/2008
Kauila St	$244,800	Land		8,583		352	10/27/2008
4568 Kawailoa St	$325,000	3	1.5	6,098	1,094	54	10/29/2008
4586 Io Rd #18	$289,000	2	1	4,301	702	184	10/29/2008
Koloa Town Lot #:	$389,000	5	3	6,779	1,400	13	10/27/2008
5110 Kome St	$468,000	3	2.5	6,000	1,544	64	10/26/2008
4362 Ulua St	$595,000	3	2.5	6,080	1,448	131	10/25/2008
Kalihiwai Rd	$900,000	3	2	108,900	2,880	688	10/23/2008
4313 Maka Rd #A	$421,900	3	2	5,682	1,649	7	10/28/2008

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Half-Point Fed Cut is Agressive

James Pycha (R) - REMAX KAUAI — Wed, 29 Oct 2008 13:35:40 -0500

WASHINGTON - Bowing to growing concerns about a deep recession and the remarkable declines on Wall Street, the Federal Reserve lowered its benchmark interest rate by half a percentage point on Wednesday, tapping its most visible policy tool to free up more money for banks and businesses.

The move brings the Federal funds rate to 1 percent. While Fed policy makers now have less room to maneuver on interest rates if the economy deteriorates further, investors had been hoping for the relatively aggressive cut as a sign of vigilance among American central bankers seeking to restore the free flow of credit. The move brought the rate down to near the lows reached in 2003 and 2004.

But the economic outlook is much grimmer than it was in 2003. Back then, policy makers were trying to vanquish the last remnants of a downturn.

This time, policy makers face an economy that is sputtering on all fronts - consumer spending, job creation, business investment, housing and possibly even exports - and the downturn has only begun.

The Federal Reserve is within striking range of reducing the overnight lending rate to zero, a point that Japan reached in the 1990s and remained at for years while it struggled to revive its economy.

If the Federal funds rate were to reach zero, the Fed would not be out of tools for stimulating the economy. But it would have to resort to unconventional tools that it has never used before. Instead of trying to reduce rates on overnight loans between banks, for example, it might start buying longer-term Treasury securities in order to push those rates down.

The Fed's biggest weakness at the moment is that the economy's problems have less to do with interest rates than the reluctance of banks and financial institutions to lend money. Even though the Fed has loaned out almost $600 billion to financial institutions in the last month alone, banks are still reluctant to lend to businesses or consumers.

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Housing Forecast Across the U.S.

James Pycha (R) - REMAX KAUAI — Wed, 29 Oct 2008 12:02:27 -0500

Although all of the economists agreed that we are in a recession-despite lack of official government confirmation-and have been for many months, several characterized the current financial turmoil as an overreaction, given the country's narrowing trade gap and strengthening dollar. "I'm hopeful that the markets will come to their senses soon," said Michael Moran, chief economist for Daiwa Securities America.

But even if the stock market bounces back, don't expect housing to rally right away. The forecasters pointed out numerous factors that are likely to drag out housing's convalescence: Unemployment is currently at 6.1%, compared with 4.4% last year, and it is projected by some to reach 8% next year. Home prices have already tumbled 20% from their peak three years ago, and will probably sink another 10% before stabilizing. Some 12 million homeowners currently owe more on their mortgages than the houses are worth, meaning more foreclosures and a drop in the already-weakening homeownership rate. And bloated supply will continue to outpace demand in most parts of the country for another year or two.

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$540 billion to support money-market mutual funds

James Pycha (R) - REMAX KAUAI — Wed, 29 Oct 2008 11:06:29 -0500

America's Federal Reserve took further measures to boost liquidity by unveiling a plan to provide up to $540 billion to support money-market mutual funds. The funds, which are usually low-risk investments in short-term debt, have been troubled since the collapse of Lehman Brothers, which caused Reserve Primary to lose money for its investors, the first time such a fund had done so for 14 years. Around $500 billion has since been withdrawn from the market, which invests in commercial paper, certificates of deposit and other financial instruments. The Fed's facility creates five "special-purpose vehicles" that will buy instruments held by the funds.

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Bargain Hunters are Reducing Real Estate Inventories

James Pycha (R) - REMAX KAUAI — Mon, 27 Oct 2008 22:58:51 -0500

Lower home prices are luring some buyers back into the U.S. housing market, but foreclosures and a weakening economy are likely to keep downward pressure on prices for at least another year, economists say. A quarterly Wall Street Journal survey of housing data in 28 major metro areas shows that the glut of unsold homes listed for sale is shrinking in most of them. In many cases, sales have been stimulated by investors who are grabbing what they see as bargains on homes that can be turned into rentals. Metro areas with the biggest drops in for-sale signs include Sacramento and Orange County in California and the Virginia suburbs of Washington, D.C.

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