We hit 2015 running ... and this update will reflect that.  Lahaina has been honored as the 2014 eCity of Hawaii by Google.  The award recognizes the strongest online business community in each state ... and Lahaina is the digital capital of Hawaii!  Maui's also been busy garnering awards.  From OpenTable in the 100 best restaurants in the country category ... Mama's Fish House in Paia made the cut.  At the same time AAA has awarded the Five Diamond Rating to the Four Seasons Resort at Wailea and The Ritz-Carlton in Kapalua.  

                    

NASA has selected Maui as the preferred site to establish the world's first laser communications ground terminal.  The site, atop Haleakala, will communicate with next-generation Earth-orbiting satellites and interplanetary probes.   It will spur major economic activity in the state with job creation and revenues.  Speaking of revenues, Hawaii's minimum wage rose for the first time since 2007.  It's a 4 year plan with base wages of $7.75 an hour this year, $8.50 an hour next year, $9.25 in 2017, and $10.10 in 2018.     You might want to start saving your pennies ... new Lexus and Subaru dealerships have just signed on for the Target-anchored Maui Business Park phase II.   It's not often that you get to celebrate an anniversary all year, but golfer's will be able to do just that as Kapalua's Bay Course celebrates its 40 Anniversary throughout 2015.  If you want more information on the different promotions and events click here.

       

Economists and housing analysts have high hopes for the Real Estate market in 2015.  First, we're going to see Millennial (aged 20-30's) young professionals jumping into home ownership.  According to some forecasts, Millennials are expect to drive two-thirds of household formations over the next 5 years.  Home prices are stabilizing.  After two years of abnormally high levels of home-price appreciation, price increases moderated in 2014.  Lawrence Yun, National Association of Realtors chief economist, expects moderate home value appreciation between 4-5% this year.  Likewise, realtor.com is predicting a 4.5% gain.   Another reason for price stabilization is investors exiting the market.    Foreign buyers are also buying less in the U.S.  Chinese buyers continue to have a strong presence, but buyers from Europe and Russia - where their economies are starting to soften - are beginning to lessen their stake in U.S. real estate.  

      

Mortgage rates are expected to rise this year.  Freddie Mac is projecting mortgage rates to average 4.6% but inch up to 5% by the end of this year.  Then there's the return of the 3% down payment.  Freddie Mac and Fannie Mae have lowered their conventional loan down-payment program for qualified first-time buyers, from 5% to 3%.  Foreclosures have been on the decline.  According to Daren Blomquist, vice president of RealtyTrac, foreclosures "will likely fall to pre-crisis levels in 2015."

               

The drop in oil prices will also boost housing.  Yep, housing - not just driving related expenses. In CoreLogic's 2015 Housing Outlook: "Households in the U.S. spend more than $1800 on energy-related costs annually, and 22% of that energy consumption is due to residential real estate."  Rents are continuing to rise.  It's going to continue to be a landlord's market.  The National Association of Realtors says "increases in rental costs in 2015 could outpace annual home-price gains."  In a recently released equity report, about 90% of all mortgaged properties nationwide now have equity again.  If home prices rose by 5% more (predicted for this year), an additional 1 million home owners now in negative equity would also move into positive territory.

          

Here on Maui, the median price of a single family home rose 10.2% in December, with the median price being $565,000 compared to $512,500 in December 2013.  The number of sales declined 19.2%, with 63 homes closing compared to 78 homes in December a year earlier. Meanwhile the median price of a condominium last month was $387,500, a 6.2% increase from $365,000 in December  The number of sales rose 1.7% to 122 units sold, from 120 units in 2013.  

                            

Let's take a look at Kahana Properties:  Figures taken from the Realtors Association of Maui

KAHANA VILLAGE
STATUS	UNIT	BD	BA	LIST $	LH	SALE  $	CLOSE
Sold	34	2	2	799,000	LH	700,000	8/1/2014
KAHANA OUTRIGGER
Sold	1B2	3	2	408,000	LH	414,750	8/27/2014
Sold	4B1	3	2	420,000	LH	420,000	10/31/2014
KAHANA SUNSET
Active	B5B	1	1	535,000
Active	B3B	1	1	585,000
Active	B1B	1	1	639,000
Active	C1	2	2	599,000
Active	C3	2	2	675,000
Sold	A4	2	2.5	1,295,000		1,150,000	6/24/2014

Visitor arrivals to Hawaii from China increased by more by 25.8% during the first 11 months of 2014, and the Chinese are spending more once they arrive in the Islands.  That trend in expected to increase, and there could be a surge as soon as next month for the Chinese Spring Festival Feb. 19-24.   Hawaii's tourism industry in general set another record for visitor arrivals.  During the first 11 months of 2014, visitor arrivals totaled 7.5 million ... 9% ahead of 2013's record.  Visitor expenditures totaled $13.3 billion, 2.3% more than a year earlier.  the State Department of Taxation collected $380.4 million.

            

Next time you're at one of Maui's airports, you'll see a new 5-minute video on ocean safety. Not only will it be played at the baggage claim areas, but also in all hotel rooms.  They're aiming for captive audiences.   Hawaii hotel room rates are on the rise.  The statewide average daily room rate last week rose 1.8% to $254.51.  Statewide average hotel occupancy was 76.6%.   Maui had the highest average occupancy rate at 78.9%, as well as the highest average daily room rate at $326.25.

       

Hawaiian Airlines has reason to celebrate.  They carried over 10 million passengers in 2014, the most it has ever flown in a single year.  The airlines has come a long way.  It took 38 years for the company to reach its first cumulative 10 million passengers.  Not surprising ... they want to spread out.  Hawaiian Airlines has applied for flights between Tokyo's Haneda Airport and Kona Airport on the Big Island starting June 1st. Hawaiian believes the new service will bring 39,000 additional visitors, result in 1,151 new jobs, and $146 million in visitor expenditures.

          

Alaska Airlines passengers will be able to print out their own baggage tags at home on Maui during the first quarter of this year.  The program has already gone live in Honolulu, Kona and Lihue airports.  Ever had the problem of needing to get an envelope or box to a Neighbor Island really fast?  Well, Mokulele Airlines is now offering exactly that kind of service from all of its 10 airport locations on Oahu, Maui, the Big Island, Lanai and Molokai. You can drop off envelopes and boxes up to 10 pounds at your location, and it will be ready to pick up at the destination airport within hours!

            

A new study by Cruise Holidays International says that when cruise trips last more than 15 days, people want to come to Hawaii the most.  The most popular itinerary is a 15-day Hawaiian Island cruise from San Francisco (offered by Princess Cruises).  Coming in at No. 4 is another 15-day trip to Hawaii, but from Los Angeles (offered by Carnival Cruise Lines and Princes Cruises).

There is a lot of news in the Mortgage arena ... FHA cutting fees, Feds raising interest rates, even mortgage debt forgiveness.  I don't juggle that many hats, so I'll turn things over to my mortgage guru Dean Rathbun of Avis Mortgage.  Dean shares that mortgage finance giants Fannie Mae and Freddie Mac, will likely be guaranteeing a lot fewer new loans over the next decade, as the private sector steps up its role.  The Congressional Budget Office agrees with him - from 2008 - 2013 - Fannie Mae and Freddie Mac backed about 60% of new mortgages.  They'll likely only back about 40% by 2024 as private sources of capital take their place.