Hawaii housing
bubble claim
disputedState real estate experts
say recent remarks by a
Federal Reserve official
lack historical perspective
In contrast to remarks made Wednesday by Robert McTeer, chief executive of the Federal Reserve Bank of Dallas, Hawaii's real estate developers and building industry executives said yesterday they don't believe the local housing market is in the midst of a price bubble.
Their comments came at a news conference in which Gov. Linda Lingle proclaimed October Homeownership Month in Hawaii.
"(McTeer) wasn't here 10 years ago when prices were plunging. We have to put this in perspective of local history," said Craig Watase of Mark Development Inc.
"I'm not so convinced it's a bubble," added Kenneth Choate, president of the Building Industry Association of Hawaii.
"There has been pent-up demand from people wanting to buy a house -- that has been coupled with the lowest interest rates in years," he said.
In her remarks about the status of the real estate industry, Lingle noted the part played by construction in creating jobs and boosting the state's economy.
"The industry has been the main driver of our economy," she said.
Lingle noted that demand for housing is so great that it even had an impact on next month's BIA Parade of Homes.
With available homes being snapped up at such a rapid pace, fewer homes are on show this year, she said.
But in spite of the economic benefits a strong real estate market and construction industry has brought, Lingle and industry representatives sounded a cautionary note.
More needs to be done to make sure there are enough skilled construction workers to meet the demand, they said, particularly in light of the expected influx of work related to upcoming military housing privatization projects.
Recalling a similar situation she faced as Mayor of Maui, Lingle said: "The situation we want to avoid is having to import labor, then you have the tail wagging the dog," she said.
While Hawaii's real estate boom has brought an economic boost to the state, job growth and increased opportunity for home ownership, it has also brought to light problems related to land use classifications and the roles played by the counties and the state in that process, Lingle said.
Lingle pointed to the recent legal battles involving Hokulia, the luxury residential development on the Big Island.
"It's clearly an example of the problem of having a two-tier system," she said.
Lingle said she favors land use decision-making at the county level.
She also said the agricultural land use designation has become a default category and too often land that is not suitable for agricultural activity ends up being classified as agricultural, Lingle said.
"There is no distinction being made between true agricultural lands and rural land," she said.
Lingle said she hopes a group tasked with looking at land classification will come up with recommendations to remedy some of these problems. She also plans to raise the matter during next year's legislative session, she said.
