Hawaii Luxury Condos

Hawaii luxury condos hit by recession and swine flu

The Hawaii luxury condo market is taking a beating along with the rest of the luxury real estate markets, with rising foreclosures, but this is causing issues for those in good financial standing as well as those foreclosed upon. The amount of foreclosures is meaning that, in some cases, as many as 20% of the units in some developments are delinquent in paying maintenance fees to the homeowner’s association or condo boards.

This means increased charges for those remaining tenants and owners, with fees rising as much as 10% to cover the shortfall. This is, in turn causing problems for owners who rent out their condos as investments. The rather odd Hawaiian state condo law means that any tenant delinquent for more than 30 days can be forced to pay the rent directly to the association, cutting out the landlord. The landlord has no recourse and is not allowed to evict the tenant.

Hawaii's luxury condominium market hit by recession, foreclosures and swine flu fears

Vacation rentals have dropped, rental incomes are down around 20% and this is just adding to the pressure. A similar situation is emerging in Manhattan, but the summer season in Hawaii looks like being particularly poor, with swine flu fears adding to the problem.

According to the Hawaii Tourism Authority, Hawaii’s visitor counts from Japan in June dropped 32.8% to 62,605 visitors, which is the lowest number since May 2003. Spending by Japanese visitors was down 34%. Although the Japanese market was hardest hit, overall, there was a 5.2% decline in visitors, and spending has dropped 16.1%