Mortgage Woes include Wells Fargo

Wells Fargo, known for its tighter guidelines and conservative practices, is not exempt from the mortgage dilemma which continues to unfold day after day. Wells Fargo, the fifth largest U.S. bank, said it will recognise $ 1.4 billion in loses for the fourth quarter. Despite this fourth quarter loss, Wells Fargo is getting off lightly compared with some of its peers like Countrywide and Washington Mutual, which has suffered tens of billions of loss over the last year. To give you some perspective, Wells Fargo originated roughly $ 2 trillion since 2001, recording incredible profits during that time.
For the complete story, click on the link provided.

http://biz.yahoo.com/ap/071128/wells_fargo_charge.html

Maui Builders of Affordable Housing Fees Waived

The Land Use Committee has paved the way for builders of affordable housing to save thousands of dollars in county fees. For the full story, click on this link.

http://www.mauinews.com/story.aspx?id=35987

Maui Real Estate Sales Activity October 2007

Aloha,

Thanks for your comments and feedback.

Instead of analyzing the October sales figures, I've attached a link to the Real Estate Association of Maui's sales summary:

http://www.mauiboard.com/complete_stats.mv

Particularly interesting are the sales figures from 2002 and 2003, which show the total number of sales month to month, and year to year, dating back to Jan. 2002. By looking at these figures, you'll see there were many more sales, month to month, andyear to year in 2003, 2004 and 2005 than in 2006 and 2007. I've often wondered about the mental tug of war between buyers and sellers, and now I get to see the transition in action. Considering the large number of new developments that have come on line in the last three years, combined with the growing number of people listing their properties, its no surprise Maui's real estate market is anxious. Listed in Maui County, today, any buyer has the choice of 1086 homes, 1333 condos and 519 pieces of vacant land. There are 153 homes (14 %) in escrow, 116 condos (9 %) in escrow and 50 pieces of land (9.7%). These escrow numbers are sobering, no question.


More rate cuts are expected when the Fed meets on 11 December. Should this happen, it will total three rate cuts in four months. Sound familiar ? Remember April of 2002 ? Given that real estate movement lags rate cuts anywhere between three to six months, we anticipate buyers to return soon (Dec/ Jan) based on the half point September rate cut. Interestingly enough, I recently spoke with a Canadian couple this weekend who bought on Maui a year ago. They wanted to know the current state of market. After a short explanation, the wife, head in hands, said "Oh s...t, now is the time we should have bought!" With a weak dollar, "very motivated" sellers, and excessive inventory on the market, foreign money could very well turn this market this winter. Now is the time to do your due diligence and position yourself to buy. Looking forward the next six months, we could see one of the great buying opportunities for years to come.

Please note, if you'd like to opt out of this letter, simply reply to this mail telling me so.

Thank you,

John Papazian R(B) Peter Slate R(S)

Haiku Properties Haiku Properties

808 878 6800 808 276 4017

Big Banks carrying Bad Debt

In all the credit turmoil among major banks and lending institutions, real estate transactions are held hostage by borrowers ability to borrow money. I submit that real estate agents get together and say a small prayer for the credit crisis to be over, and for jumbo loans, with loose guidelines to return, as soon as possible !
Shares of Washington Mutual fell rapidly to their lowest levels in 20 years after the company issued its latest forecast. By midday in the session, the lender's stock had dropped more than 19% on nearly twice its average daily volume. Washington Mutual Inc. said on Wednesday that 2007 credit losses could amount to between $2.7 billion to $2.9 billion, almost double the estimates it made in July when the subprime meltdown began wreaking havoc in U.S. mortgage markets.
During presentations, the savings and loan cited Fannie Mae data that suggest U.S. mortgage origination in 2008 will fall to $1.5 trillion for the industry. That would be a substantial decrease from $2.8 trillion from all lenders in 2006. Earlier projections were that new mortgage-loan volumes would slump to around $2.4 trillion. Kerry Killinger, Washington Mutual's chief executive, refused to speculate on whether the company's board of directors would raise dividend rates. He pointed to a lack of visibility over market conditions, liquidity issues and even earnings.
"We don't always have great certainty around the future," Killinger said during the daylong conference. "We just don't know how long this level of lower performance will remain."
Adding to the uncertainty are comments from Chief Financial Officer Thomas Casey, who warned that overall expenses in 2007 could turn out to be greater than a broad range Washington Mutual had given in its third-quarter conference call.

Kauai and Big Island Home Resales Down

Home resales on the Big Island and Kaua'i last month were down by 24 percent to 56 percent, as Hawai'i's residential real estate market continues to soften. The softening real estate market is everywhere with other resort destinations such as Florida being hit particularly hard. As winter approaches, and the U.S. dollar weakens, many real estate agents are looking to Canadians and Foreign Nationals to help support their local real estate market. Stay tuned

HR 3648: Capital Gains Tax Exemption Proposal

When 2008 rolls around, HR 3648, a bill making its way through Congress, will limit investors exemption on "primary residences" ..... this is to say houses that are second homes and claimed as their primary residences.

Under current laws, if an investor lives in a residence for 2 of 5 years they are eligible for a full tax exemption: $ 250 000 for a single person, and $ 500 000 for married people. If HR 3648 passes, it will pro-rate the tax exemption for time an owner lives in a primary residence. Hence, an investor who lives in one of his houses for 2 years over a 5 year period will only be eligible for 40% of the full tax exemption.

The Pines of Koele and The Palms of Manele on Lana'i

The Pines at Koele are located "Upcountry", above Lanai City, and very close to the Four Seasons Lana'i, the Lodge at Koele. The Pines will offer twenty separate, fee simple, dwellings. Currently Phases 1 and 2 are on the market, priced from $ 1.150 000 to $ 1 559 250. There are two basic floor plans, a single story 2 or 3 bedroom and a two story 4 bed floor plan, settled alongside a lake, and adjacent the 2nd and 7th holes of the Experience at Koele Golf Course designed by Greg Norman. The Pines at Koele offer a fantastic second home opportunity. Residents of The Pines can purchase a membership in the Island Club, which, in addition to providing a full residential concierge staff, affords them use of facilities at both Four Seasons Resorts, the Lodge at Koele and Manele Bay, as well as preferred pricing at the restaurants and shops.

The Palms at Manele consist of eight duplex condominiums, located above the 18th fairway of the Challenge at Manele and offering stunning views of Hulopo'e Bay. The Palms feature ten foot ceilings and quality finishes range in price from $2.3 to $ 2.895 million. Single story and two story plans are available. As with the Pines, Owners may purchase a membership in the Island Club and enjoy the hotel, its amenities and preferred pricing.

In addition to The Palms and The Pines, there are 3 absolutely gorgeous, ocean front lots available which overlook Hulopo'e Bay.

For more information regarding Lanai property, please contact me directly: 808 276 4017, or visit my website: http://www.peterslate.com/

Honua' ula advances another round.

After months of hearings and open discussion, the County Council Land Use Committee seems ready to make a recommendation on the Honua'ula project, also known as Wailea 670.
Land Use Chairman, Mike Molina was quoted "I sense the members are ready to bring this to some resolution, and I know that the public is also awaiting our decision."
"We're definitely on the home stretch," Molina said.
Despite these upbeat comments, Molina was also quoted as saying "This is just a small step, literally a small step." Should the Land Use committee agree to approve the Honua'ula project, the project would require two readings by the full council, during which changes can still be proposed.
Stay tuned.