Canada Housing Market to Follow U.S./Hawai'i Experience?

Hawai'i, especially on the Big Island, has been experiencing steep deflation in the housing market. Construction jobs are at about 30% unemployment here now. The residential real estate market has been in the doldrums for a couple of years now.

Investment advisor, Mike "Mish" Shedlock, in commenting on the current condition of the real estate market in Vancouver and Calgary, Canada, identifies a post-peak pattern of housing market declines in the U.S. His pattern appears to be very close to what we observed in the Big Island housing drop. It is worth a look for future reference. Here it is:

Housing Collapse Cascade Pattern

- Volume drops precipitously
- Prices soften a bit
- Inventory levels rise slowly
- Higher-end home process remain relatively steady for a brief while longer
- The real estate industry tries to convince everyone it's "business as usual" and homes are affordable because rates are low
- Bubble denial kicks in with media articles everywhere touting the "fundamentals"
- Stubborn sellers hold out for last year's prices as volume continues to shrink
- Inventory levels reach new highs
- Builders start offering huge incentives to clear inventory
- Some sellers finally realize (too late) what is happening
- Price declines hit the high-end
- Increasingly desperate sellers get creative with incentives, offering new cars, below market interest rates, trips, etc.
- Gimmicks do not work
- Price declines escalate sharply at all price levels
- The Central Bank issues statements that housing is fundamentally sound
- Prices collapse, inventory skyrockets and builders holding inventory go bankrupt

Mish notes, "Some of those may happen simultaneously or in a different order, but the whole mess starts with a huge plunge in volume."

Click here for the entire article.

Appliance-dependency Helplessness in Hawai’i

In today’s headlines, the U.S. President continues to tout the “Recovery Summer”, while the most publicly-visible and influential Keynesian economist, Paul Krugman, upon whose analysis and opinions help drive the president’s economic stimulus policy, states that we’re at the beginning of a Third Depression (either to be long or great).

Perhaps to emphasize the point, the Dow Jones industrial average has dropped 428 points (4.2 percent) in the last four days, currently down 14.5 percent from its 2010 high in April. Investors appear to be choosing liquidity over capital investment. This sort of trend generally is taken as not a positive development for architects,

However, this is not my most preoccupying concern. The most vexing problem lately has been getting the laundry done.

Some months ago, various of my progeny and their family members, together with us, their parents, moved into one house to help manage reduced incomes resulting from the contracting private sector economy.

There are eight of us here. Several of us play soccer, some surf, one is a triathlete, training sometimes twice a day, and there is a one year old, and we generate dirty clothes regularly and efficiently. We used to do 2 or 3 washer loads a day, until our 7 month-old Maytag washer broke down in a noisy, grinding and ultimately, irritating, though non-agitating (if you know what I mean), way. That was 6 weeks ago.

Four weeks ago, the repairman came out to fix the washer. He took off the top and front panel to reveal at least part of the damage. Concrete rings around the front and back of the drum, presumably functioning as counterweights or stabilizers, were cracked and chipped. The repairman said he would order the replacement parts and call me when with the date they were expected to arrive.

He never called. After repeated calls to his number, I was told the part would arrive a week ago last Sunday. I called on Monday last. No answer. The next day, his receptionist told me the part was on factory back order and wouldn’t arrive until July 16.

Skipping many uninteresting steps. I called the factory. They located a distributor with the part. It arrived yesterday. There were no stabilizer rings. I’ve called twice to the repairman to ask how to proceed with repairs. Neither call has been returned yet. Week seven begins.

We live on an Island, 3,000 miles from the nearest continent. Obtaining certain goods has always been a patience-building exercise. Usually, we just tally it up as part of the price of Paradise. I don’t know how many more weeks must yet pass before our warranty-covered repairs are completed. Patience-building time and Paradise price inflation are both growing.

In the meantime, the local laundromat is prospering in the down economy from the many bags of dirty clothes we wash and dry there every week at no small cost of time and money (Paradise premium rates).

If only architects provided a service that had to be obtained every week…

The Heroic and the Honorable

Thoughts running through my head today…

Today, Friday, is nearly over. Today was King Kamehemeha Day in Hawaii, a state holiday commemorating the king who conquered all other Hawaiian kings and united the Hawaiian Islands as one nation.


King Kamehameha

Tomorrow morning, Hawaiian Standard Time, is the World Cup Football (soccer) match between England and the USA. It will be the first time in 60 years the two national teams have played each other in the World Cup. The host country for the quadrennial World Cup games this time is South Africa, a nation a half a world of time zones away from here.

Some of us in the family watched the movie, “Invictus” a couple of weeks ago. It is a very sanitized version of the story of how the South African national rugby team began to reconcile blacks and whites and unite the Rugby Championships host nation of South Africa during a time of great tension, shortly after Nelson Mandela became president.

History, as written by winners of wars, identifies as heroes, those who, often violently and through persistent use of bloody force, conquer their enemies and establish their subjugation. Sometimes this appears to work out for the better, sometimes for the worse. Sometimes it seems the jury is still out on the effects of the outcome.

King Kamehameha accomplished an extraordinary goal and is honored as a hero today. Warfare during his reign was up close and personal. The defeat of foes was accomplished through stabbing, slicing, bludgeoning and crushing with low-tech, handmade, though very lethal, weapons in a style of fighting not much different from warfare from ancient times in Asia and Europe. Kamehameha’s achievement was accomplished by killing a lot of people.


“The Battle of Nu’uanu”, painting by Hawaiian artist, Herb Kane

Nelson Mandela was imprisoned for 27 years on charges of sabotage. He was leader of the military wing of the African National Congress (ANC). Violence was considered a necessary tool to overcome the established government’s policies and practices of apartheid, a system that precluded the black majority of South Africa from freely participating in the political, economic and social spheres of the nation.


Nelson Mandela

One tool of the ANC was necklacing. I remember seeing this atrocity on a cable TV news program in the 1980’s. The ANC would tie up anyone they felt was an enemy collaborator, lay him (or her) on the ground, put a car tire around his neck, fill it with gasoline and light it on fire which produced a horrifically slow and painful death. Winnie Mandela, Nelson’s wife, affirmed this as a necessary and defendable practice. I don’t know for sure whether Nelson gave public assent to its use or not, but his followers must have believed they had his tacit approval to do this. Eventually, the ANC and its allied organizations became victorious in their goal of ending apartheid and assuming political control of the nation as Nelson Mandela was elected president. He worked as president to achieve a multi-racial democratic government.

Tomorrow, if the US wins against England, the victorious players will be acclaimed, no doubt by some, as heroes of the game.


Team USA, 2010 FIFA World Cup South Africa

If you were to ask a group of parents if they would wish their children to be courageous, chances are most would say yes. If however, you were to ask these same parents if they would wish for their children to be acclaimed as heroes by killing a lot of people, many might decline. Most would probably be quite happy if their children became “heroes” by winning an international competition as representatives of their nations.

We live in an imperfect world. Heroism can be an imperfect designation. Many of history’s heroes carried with them a lot of bloodguilt of the innocent to their graves. There is only One who is capable of judging them with perfect justice and mercy. Heroes win victories for their nations. True honor, though, can be hidden from human eyes, and might only be seen by the Lord.

I realize that my life benefits from the heroic actions of many people who have gone before me and that I am blessed to live in a country that still enjoys a lot of freedoms many others don't have. Still, I would rather have as my closest friends the honorable, than merely the heroic.

50 Years After the Hilo Tsunami

I’m a little behind here, fighting off a cold and lacking energy. but...



Sunday marked the 50th anniversary of the 1960 tsunami, which devastated Waiakea town (a town section of Hilo) along Kamehameha Avenue and the Hilo bay front. Where once stood houses and businesses there is now a wide, open-space buffer, including park areas and the soccer fields all of my children played on in inter-island competitions while growing up.

The tsunami collapsed house against house as it rushed up the slope of the town. Sixty one people perished. Waiakea Town was condemmed and deeded over to the state.



Hilo, the County of Hawaii government headquarters, is on the windward coast (opposite side from Kona) of the Big Island, the Island of Hawai’i.

On February 27 of this year, our family woke up to tsunami warning sirens, due to earthquake-generated concerns) here in Kona. Condominiums along the shore were evacuated, businesses were closed and nearly everyone moved up the slopes of Hualalai as a precaution

Down the road from where we live, a group set up a few shade tents right off the highway on the edge of a precipice, along with tables, chairs, coolers and barbecue grills to watch the big one hit about a thousand feet lower and a mile away. We watched for it while attending a house blessing event at 600 feet elevation and a clear view of the coastline about ½ mile down slope.

The anticipated tsunami never arrived, thankfully. The drama far exceeded the event. This was a good thing, in spite of the potential for producing cynicism in some people from, yet another, “false” alarm. As the Hilo tsunami demonstrated, it’s important to be vigilant and responsive to warnings. Complacency can become fatal along the island coastline.



Click here to read one survivor's recent recollection of the 1960 Waiakea-Hilo Tsunami.