Mortgage Market News and Insight

For the Weekend of February 22^nd, 2025

 

Hawaii’s Most Read Mortgage Publication for 17 Years

 

Volume 17 – Issue 23

Additional Thoughts on Exceptional Trees

I want to thank all of you that responded to my recent newsletter about my tree.  It is obvious that trees impact some part of us very deeply inside.  Many of you shared stories of your own loss of a large tree.  Because trees grow on a schedule a lot like us humans, the shade and visual pleasure we get from a specific tree may last our entire lifetime.  Many of you that lost a tree conveyed it was like losing a family member.

 

If you missed the saga of my 119 year old tree succumbing to the storm in late January, here’s the link to that newsletter:  2/1/2025 newsletter.  I promised to provide updates and to share what I have learned while dealing with a large fallen tree and damage to my home.

 

The Exceptional Tree Program:

In dealing with multiple arborists on the fate of my tree, I learned the Exceptional Tree Program may not be the right choice for many.  The program offers a tax break to owners of trees deemed exceptional by the county in exchange for regular maintenance.  The key here is regular maintenance.  Part of the program’s requirements stipulates that you must maintain the tree regularly.  Even my big tree didn’t need annual work but that’s not your call.  Additionally, as in my case where the tree needed to be removed completely, there are regulatory steps one will have to take, prior to removing the remainder of the tree.

 

The program is a good idea if you have regular maintenance performed on your tree.  The tax credit is a great incentive.  But as with all government programs, there are strings attached.  If you believe you have a tree that could possibly earn the distinction of being one of Hawaii’s exceptional trees, do the research yourself, and see if the program is right for your circumstances.

 

 

Some Thoughts on Large and/or Tall Trees:

In retrospect, despite the damage we received from the collapse of a major portion of our tree, we were very lucky.  This was a very large tree.  Freakishly large for a Kiawe, but as for size and weight, I’ve seen some really large Monkeypod and Banyan trees on residential properties.  We were lucky, that despite damage to a structure on our property, no one was hurt or killed.

 

As the tree was removed, it became clear that we did dodge a bullet.  The picture below shows the base of the tree trunk.  It’s nearly 4 feet in diameter.  Yes, Kiawe trees are known to have hollow centers, but for the size and weight of this tree, there was not much holding it in place.  The stump grinder on Monday will determine how deep the roots went, but Kiawe is not known for having a deep root structure.

 

There is no doubt that it wasn’t a question of if, but instead, when would this tree fall.  I’m sure you’ve never looked at a tree and wondered “how much does this tree weigh?”  I certainly never did.  But if you have a large tree on your property, you should start thinking about it.  I would highly recommend you find a licensed arborist to evaluate the health of your tree.  Maybe everything is good, but maybe you have a growing timebomb.

 

 

The above picture represents a portion of what once stood majestically as a beacon in East Oahu.  The estimate was that the entire weight of the tree was approximately 30,000 pounds, yes 15 tons!

 

And as the workers hauled her away, I had mixed emotions of sadness for the loss, but a sense of relief that a potential danger has also been eliminated.  It was at that point that I turned back towards the portion of my home that will next be the focus of repair and renew, and noticed an ominous sight:

 

 

 

Holy Crap!  How tall are those Coconut trees?  What were once a beautiful backdrop to frame my back yard, my neighbor’s coconut trees have now grown so tall they are now a hazard.  The tallest is probably 75 feet or higher.  They are planted about 15 feet from the property line.  I am not an anti-tree person looking to deforest my neighborhood, but these coconut trees are too tall, too old, and too close to my home, for my comfort.  I guess the nest step is to ask the neighbor about cutting them down.

 

I hope this series has opened your eyes to the dangers and liability of having large and/or tall trees on your property.  As a kid, I loved to climb trees.  None of the trees we climbed were ever more than 20-30 feet tall.  When you get bigger or taller than that, the tree can become a serious liability.

 

I will miss my tree, but I’ve had a souvenir from a cousin of this tree for years.  After Hurricane Iwa grazed Oahu in 1982, a large Kiawe tree was toppled in Kapiolani Park.  The tree sat there for weeks on its side.  Being 18 and having more brawn than brains, my roommate suggested we take a portion of the tree to make into a table.  With a 2-man 6-foot handsaw, like something from the pioneering days, we eventually were each the proud owners of a heavy stump of Kiawe.  My piece survived multiple moves, but that dream of a table was never realized.  Jump forward 10 years when a delivery guy noticed the large slab of wood in my garage.  He said he was a weekend woodworker and had the machinery big enough to make my dream of having my table a reality.  The slab was thick enough that I ended up with 2 tables, each a mirror image.  By the way, this table being only 4 inches thick, is still a very heavy piece of furniture!

 

 

 

 

 

 

And now the week’s economic news…….

 

Existing Home Sales Mixed Messages

With a lack of major economic data, it was a quiet week for mortgage markets.  As expected, the housing sector revealed weakness in January, mostly in regions which experienced bad weather.  Mortgage rates ended the week with little change.

 

In January, sales of existing homes fell 4.9% from December but still were up 2% from a year ago.  The median existing-home price of $396,900 was up 4.8% from last year at this time and a record high for January.  Inventories remain stuck at historically low levels, standing at just a 3.5-month supply nationally, far below the 4.6-month supply typical in a balanced market.  However, inventories were 16.8% higher than a year ago.

 

While it was heavily impacted by bad weather and thus anticipated, the latest home building data was not encouraging.  Overall housing starts in January plunged 10% from December, matching the consensus forecast.  Single-family starts declined 8% from December and were a little lower than last year at this time.  Less affected by the weather, single-family building permits, a leading indicator of future construction, were nearly flat from December.  A separate survey of home builder sentiment on housing market conditions from the NAHB unexpectedly turned sharply lower this month.  Builders cited uncertainty about tariffs, high mortgage rates, and rising costs as areas of concern.

 

The news on mortgage applications this week was consistent with the other housing sector reports.  According to the latest data from the Mortgage Bankers Association (MBA), applications for refinancing fell 7% from last week but still were a massive 39% higher than one year ago.  Purchase applications fell 6% from the prior week but were up a little from last year at this time.

 

The positives for this report are that despite some of the highest mortgage rates in this cycle, demand was still solid.  As rates decline, more buyers will enter the market.  With the pace of new homes being built lagging way behind demand, increased homes prices will follow.  Once again, I cannot stress, if you have any desire to buy a home in the next 12 months, do so now.  What you’ll save in supposed interest expense will all be negated due to a higher home price.

 

 

 

 

 

 

Next Week

Investors will continue to look for additional guidance from Fed officials on their plans regarding future monetary policy.  For economic reports, Consumer Confidence will be released on Tuesday. New Home Sales will come out on Wednesday.  Personal Income and the PCE price index, the inflation indicator favored by the Fed, will be released on Friday.

 

 

Until next week….