Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
All I ask is that when this alleged "bubble" does "burst", would one of you please let me know - I'd like to move back to the Big Island when that happens.
"As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions."
The federal reserve eliminated the requirement for banks to hold any liquid assets during the early part of COVID so the banks would have little motivation to initiate foreclosures*. Additionally, lending practices are a lot different, there aren't a lot of properties held by people who financed them in a temporary interest only ARM only to get stung later when the interest rate goes up and the principal starts becoming due. We also learned that the government will pressure banks to extend and renegotiate loans rather than making people homeless. There is also talk about offering 40 year mortgages.
What does this mean for the housing correction? Maybe it will be the result of the next financial catastrophe and not the cause.
* Sounds pretty benevolent, right? OR, did the FED know back in 2020 that inflation wasn't going to be "transitory" and they didn't want their member banks holding the bag? If you look here, you can see the Overnight Reverse Repurchase Agreements keeps setting new records, recently surpassing $2.1 Trillion:
* Sounds pretty benevolent, right? OR, did the FED know back in 2020 that inflation wasn't going to be "transitory" and they didn't want their member banks holding the bag? ...
LOL. They certainly didn't know, nor did anyone else. Most in the business thought inflation was headed to zero.
Now, if you care to look around you, assuming you actually live in Hawaii, what do you notice about Hawaii that stands out apart from the obvious geographical accoutrements? It’s the cost of living, especially the cost of real estate. While there may be some merit in the land scarcity argument attributable to small desirable islands, the cost to borrow has driven prices more than anything to high levels all over the world. There is a direct relationship between interest rates and asset values. One goes up the other goes down. It’s not quite as straight forward as that, but probably enough for you to chew on for the time being. So lets keep it simple and take it one step further.
Now, there’s one more aspect to this, which is unique to our current dilemma. It’s the supply of homes for sale, or severe lack thereof. It may have escaped your notice, but there have been very few homes for sale, and what there are have been met with fierce competition, much of it from Wall Street, and some of it from uninformed retail buyers. Nobody is sure exactly where it (inventory) all went, but it seems to be largely explained by behavioral traits. That’s for another time. For now it’s important to understand the effect of a lack of supply, especially where demand is artificially stimulated by the very low cost to borrow. You got it. It pushes up prices even more. It creates an upward spiral. When upward spirals accelerate, they eventually lead to downward spirals as discussed above. Now, we’re not full cycle yet, but we’re heading in that direction. Nothing is certain, but the signs are clear.
To start, Hawaii should take back Lanai. No one (rich) person should own an entire island here. Call eminent domain and give it back to the people. Larry Ellison can live in a 400 square feet condo like the rest of us burger flippers, as someone here puts it.
Also, change the system from one driven by money to one driven by needs and standing. (Mark Zuckerberg does not need 1,400 acres of prime property all for himself.)
To start, Hawaii should take back Lanai. No one (rich) person should own an entire island here. Call eminent domain and give it back to the people. Larry Ellison can live in a 400 square feet condo like the rest of us burger flippers, as someone here puts it.
Also, change the system from one driven by money to one driven by needs and standing. (Mark Zuckerberg does not need 1,400 acres of prime property all for himself.)
Can Hawaii afford to do so? Eminent domain is not free; the state has to pay private owners fair market value for a taking. State's having trouble paying for rail and other things today. And then the question would become what to do with the island once the state had it back? Ship the homeless there and hope they stay?
As things stand now, Larry Ellison pays a lot of property taxes on Lanai, and I wager properties increased in value even more than they would have with Ellison running things. The state is probably better off with this setup than without.
Can Hawaii afford to do so? Eminent domain is not free; the state has to pay private owners fair market value for a taking. State's having trouble paying for rail and other things today. And then the question would become what to do with the island once the state had it back? Ship the homeless there and hope they stay?
As things stand now, Larry Ellison pays a lot of property taxes on Lanai, and I wager properties increased in value even more than they would have with Ellison running things. The state is probably better off with this setup than without.
Well - the State has a multi billion dollar surplus and can certainly afford Lanai. Regardless, what a poor use of taxpayer money. You also need a reason to declare eminent domain - you can’t try to seize private property because you don’t like who owns. And when Lanai was for sale - that would’ve been time for the State to buy it - and then of course they’d have no idea how to run it.
The City and County of Honolulu is paying for rail - not the State.
That surplus looks like it’s pretty much spent already on various different projects based on what I’m reading. And from why I understand this wasn’t some surplus that’s the result of some natural good state government policy, but rather greatly aided by an influx of federal dollars after Dems took control of Washington (important when discussing the surplus in this context in my view, especially when we’d have to factor in lost tax revenue if eminent domain was on the table). But yes it would be a waste of money regardless.
The surplus hasn’t all been allocated and it is all Fed money - and a massive contribution to inflation across the US. The Feds pumped so much money into the economy people are literally paying the price now.
"Some of the tax law changes impacting businesses include the following:
• Increase the transient accommodation tax, extend authorization of the Oahu surcharge, and authorize counties to establish a surcharge (Act 1, 2017 First Special Legislative Session)
Beginning on January 1, 2018, the Transient Accommodations Tax (TAT) applied to lodging accommodations in Hawaii will increase by 1%, raising the tax rate from 9.25% to 10.25%. TAT revenue from the rate increase will be allocated to fund the Honolulu rail project. "
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Ship the homeless there and hope they stay? 
