From the Honolulu Advertiser:

Hawaii’s seasonally adjusted unemployment rate edged up to 3.2 percent in February, a 0.1 percentage point increase over January, the Department of Labor and Industrial Relations reported today.

That compared with the national unemployment rate, which fell 0.1 percentage point to 4.8 percent in February. Hawaii ties New Mexico with the 6th lowest unemployment rate in the country.

Hawaii’s February unemployment rate was up from 2.4 percent the same month a year earlier.

Still healthy numbers.

I came across this article in the Honolulu Star Bulletin titled, Weak Dollar Helps Isle Visitor Industry, which talks about a weak U.S. dollar is bringing more foreigners to Hawaii because we are considered cheap.

Visitors from Canada and Europe, especially, were taking advantage of favorable exchange rates, members of Hawaii’s visitor industry say. For the first time since the 1980s, the number of Canadian visitor days surpassed Japanese visitor days in Hawaii.

Overall, February arrivals by air rose 5.6 percent to 592,889 visitors compared with the same month last year, and arrivals from Canada soared 31.5 percent. Overall expenditures totaled $1 billion, a 5.2 percent increase from the year before.

It is also interesting because, while I was out shopping for an area rug for my new place, I got to talking with the owner of the store who mentioned the number of foreign buyers in his store has increased.  In fact, the first four sales of the year for him were foreign buyers. Two from Canada, one from Europe and one from Japan.

On another note, a new listing I have has had one Canadian, and two Japanese buyers out of the first 10 showings. 

There is definitely an increase in foreign travelers in Hawaii.  Read also this article about Foreign real estate investment in the U.S.  as well as Canadian Tourist Numbers Surge

I came across this interesting article at CNNMoney.  the title, Now’s The Time To Hunt For A Vacation Home, caught my eye, since I work and live in what is considered a “Second Home” market.  Though I don’t necessarily agree with some of what she says, like her choice of location for a second home.  I mean, come on, New Jersey? She ever been to New Jersey? (J/K)  Sorry Pops, I know you grew up there, but it isn’t Hawaii.

Soooo…what were the points she made?

I own my primary residence, have no intention of moving soon and am locked into a fixed mortgage at a decent rate. So rather than getting all worked up about how much my house may (temporarily) decline in value because of the subprime fiasco, I’m thinking about whether falling prices present a real opportunity.  So the market is soft. Good. And mortgage rates are down to 2004 levels. Even better. Is it time to buy? Maybe.

So have you considered the same opportunities?

For 2007, Hawaii’s per-capita income grew faster than the nation as a whole, with a 6% increase, but it was inflation, once again, that ate up most of the growth.

The increase ranked as 10th highest among states, the agency reported yesterday. Hawai’i’s actual per-capita income last year was $39,239, up from the $37,023 of a year earlier. That placed Hawai’i as having the 18th highest per-capita income in the nation. The national average was $38,611.

But while Hawai’i ranked high in the increases in per-capita personal income, people here probably didn’t feel as if they were 6 percent richer last year. That’s because the rise in personal income was not as big when inflation was considered. In 2007, inflation in Honolulu rose by 4.8 percent. So the inflation-adjusted gain in per-capita income here was less than 2 percent.

Nationally, inflation rose 2.6 percent last year. Given that, the inflation-adjusted gain in per-capita personal income was more than 2 percent nationally.

With all the serious news lately, I wanted to go a little on the softer side.  I hear so often that you don’t get much home in Hawaii compared to the mainland.  but I thought I would share with you a home that is a little smaller than your average Hawaii home.  You will be telling yourself that your place is just fine after seeing that. To me that is just silly.  Where would you put the flat screen?  Good thing it is on wheels, so he can wheel it to the dump when he comes back to reality.  J/K

Shafer grew up in a 4,000-square-foot home in Mission Viejo, Calif., but downsized in 1997 while teaching art at the University of Iowa in Iowa City. “I was fed up with maintaining and paying for more space than I needed, so I built a 100-square-foot house to meet my needs rather than adjusting my needs to the space,” he says. “It took about 400 hours, or two months with help from my friends.”

Downsizing is right!

Ever wonder what luxury homes around the country look like and sell for?  Well, I figure I would share this Massive property with you.  This comes from our affiliation to Luxury Portfolio (the largest global network of premier locally branded companies dominated by many of the world’s most powerful independent luxury brokerages.)  The home is located in Boca Raton, Fl and has 22,000 sq ft. 25 rooms, 10 bedrooms.   A little different from the previous home I showed you!

Here is the gist:

The Federal Reserve is considering doing something it has never done before: use taxpayer money to buy high-risk subprime mortgage-backed securities. Those are at the heart of the housing crisis.  (Fed Weighs Unprecedented Move, then click on the Listen Now icon

Now, let me get this straight.  The Fed wants to use taxpayer money to buy into the same mortgages that have almost taken down Countrywide, Bear Stearns and possibly Lehman Brothers and other major financial players?  How does this make since? and how will that help, except to bail-out those who are responsible?  Private investors won’t touch it, but yet we would essentially throw the taxes we pay away on a proven and guaranteed bad investment?  For what? to bail out the companies that made these investments in the first place.  Let me get into financial trouble and come bail me out instead.

I have been saying this for a while, but this Excellent articlein CNNMoney says it again and very well.  this is definitely worth reading if you are thinking of refinancing or buying a home in the near future.  If economic news is still bad or worsens then mortgage rates could go down.  Here are the best lines from the article.  A definite recommend for reading.

The Fed’s main tool is control over the short-term fed funds rate, which determines what banks charge each other for overnight loans. Long-term mortgage rates are mostly tied to the 10-year Treasury yield, which is determined by bond traders worldwide.

“There is a long disconnect between the fed funds rate and fixed mortgage rates,” said Keith Gumbinger, vice president of mortgage and consumer loan information publisher HSH.com.

Inflation drives long-term fixed rates.

Watching CNBC this year has been one heck of a roller coaster ride. The Fed rate cuts, and the Bear Stearn’s news made for quite a week.  There was a GREAT article by NPR explaining the moves by the Fed.

The Fed’s moves raise questions about just how deep the financial industry’s woes go…

Along with the Fed’s action, the federal government tried to do it’s part in assisting with the mortgage problems.  Read Fannie & Freddie Set Free from Business Week as well as CNNMoney’s story titles: Fannie, Freddie To Get Lending Boost.

Another stone fell into place in the federal government’s plan to build a path to credit market recovery. On Mar. 19, the Office of Federal Housing Enterprise Oversight, or OFHEO, said it was reducing the amount of capital it requires Fannie Mae (FNM) and Freddie Mac (FRE) to maintain on their balance sheets above statutory requirements.

The government is loosening capital restraints on Fannie Mae and Freddie Mac so that the mortgage-finance companies can expand their roles in the stricken housing market.

The Federal Reserve significantly cut rates this past Tuesday for the sixth straight time since September. This follows a busy weekend where the Fed also extended its hand to Wall Street, bailing out Bear Stearns with JP Morgan Chase. While rate cuts look good at face value, you need to prepare for what’s to come.

The Fed wants you to start spending money and wants to boost consumer and Wall Street confidence. Consumers are under stress with increasing consumer prices and a slowing housing market. Wall Street banks have been under stress from mortgage defaults and their impact on corporate balance sheets.

How does this impact you?
Fed rate cuts are inflationary. Since the Fed started cutting rates in September of last year, oil prices are up nearly 40%, gold prices are up over 25%. This is the direct result of a falling dollar which occurs from Fed rate cuts.

As a result, mortgage rates will ultimately rise from here. It is inevitable. Inflation is the arch enemy of fixed-income investments, long-term bonds and mortgage-backed securities, upon which mortgage rates are based.

Here’s a look at the inflation picture: Gas prices last September, prior to the Fed’s current cutting trend, were roughly $2.75 a gallon. Today, gasoline averages $3.25 a gallon nationally, up 18% before the first rate cut. This is a sign of inflation.

What should you do now?
If you are looking to refinance, don’t wait. Act now to get a great interest rate. Home loan rates have come down over 1.00% in the last two weeks. But after each of the last five rate cuts, we have seen rates rise significantly in a short period of time. Don’t get caught saying “I wish I had…”

If you are looking to purchase a home, I want to hear from you right away. Home prices have to fall over 10% to make back what you lose in monthly housing payments if rates increase 1.00%. There are some great buys out there today!