In June's column, I said that this was a "very healthy market." Well, it still is, only, with two exceptions... D.O.M. (Days on Market) and For Sale Inventory are rising dramatically. In most neighborhoods, the For Sale Inventory is rising well above and beyond the rate of increasing sales! If there is any doubt left out there that this is a Buyer's Market, well then believe me when I tell you ... This is a Buyer's Market, and will continue to be for some time to come!

I recently sought out opinions from Realtors who have been through at least one Buyers and one Sellers Market cycle. The overall opinion of most was that this market is in no danger of rapidly deflating Sold prices. Many of these Realtors cited Honolulu Board of Realtors' sales history back in the '90's where it showed the end of a Seller's Market turning into a Buyer's market, much like what's happening now.


1987 was the height of this market's cycle with 3,179 SFH's (Single Family Homes) Sold. At the bottom of this market cycle was 1995, when 1,642 SFH's were Sold. This is a -48% drop in # of Solds in this 9 year cycle.

In 1994 the Average Median Price Sold for SFH's was $360k. As the # of Solds continued their drop until 1995. Then, in 1996, as they began to rise again, it took a few years for the Median Price Sold to start to go back up again.

In 1995 the median was $360k. In 1999 it was $290k. This is -19% decrease over a 4 year period or -4.75% / year. This is a market lag. As the number of Solds start to improve, the Sold prices still are on their way down for a few years until the inventory drops and then the prices start to rise again. The Condo/Town Home market was no different. It is therefore important to primarily watch the # of homes sold. This will happen exactly the same way in our current market cycle as it plays out.

One can track our current statistics daily and monthly, but the reality of the situation is we will not see any appreciable changes by doing this where we can say "Ah Ha! I see what is happening now!" We all need to mostly track the quarter stats and the yearly stats. Then we will all be able to get a better handle on what is going on and get ahead of the market and plan accordingly. Remember, from the data above during the last boom and bust market cycle, things take time to change. Home sale prices are not going to drop out of the sky like a stone. It will be more like the final approach of an aircraft landing.

Should I sell now? Should I buy now or wait?

The answer to this question will best be found if you just look at your individual circumstances. What are your current needs? What will they be in the future? Are you going to stay in Hawaii? Do you need to down size as you get older? Will you need a single floor residence? Are your children all grown and out of the house? Have you owned your home for 25 years and want to take the money and run? Did you take an interest only mortgage loan? Are you buying or selling for the first time? Etc.

Everyone is in the same boat. Some of us are getting divorces. Some of us can no longer climb or go down stairs. Some of us are really getting tired of home maintenance and yard work. Some of us are financially strapped and so forth. All of these questions and circumstances are occurring to each and every one of us and the sales statistics are affected by them as we all decide what to do and take action upon our choices. So, to look at daily statistics or month to month is not what to focus on in home sale stats. It is the long term data. But... it would be safe to say you have a couple of years to think about it as the market gets deeper and deeper into a Buyer's Market, seeking out its bottom in this current market cycle.

The question, Should I buy now? is easily answered: YES. Statistics prove that if you are going to invest in Real Estate... for the long term, the answer is always YES. If you are not going to... the answer is NO.


What if I need to sell right now?

First study the market statistics as whole. Study the whole Island. See what is going on in the Mainland. Hawaii always follows the Mainland Market. But... only study the near shore line or shore line markets in the Mainland. These are most similar to ours in predicting market changes. San Diego, San Francisco, Los Angeles, etc.

When you have accomplished this, then do the same thing for your Neighborhood. Features, sizes, current inventory levels and prices will be all over the place for each neighborhood. Study the market data for your neighborhood. Look at your competition and act accordingly.

For Heaven's sake, don't do this on your own! Get a good Realtor to help you! It is worth it! These are trained professionals who have studied hard, gone to war in various markets, stuck around, haven't quit and they have the experience to get you what you want in this market. Realtors are the very best source to answer your very most important question... How much can I sell my home for?

Now decide on a marketing plan of attack. Do I need Open House, 360 degree photos, flyers, postcards, letters to other Realtors, websites etc., to promote the sale of my home? There are many brokerages to choose from and over 5,000 agents to suit your individual needs. Interview! Ask questions! Listen to the Answers! Then decide which brokerage and then which agent is best for your circumstances. This will be second most important question in the steps to sell your home! When you are deciding this important question and studying the market data, don't forget to look at Expired and Withdrawn Listings! Not just those for sale or sold. Reviewing all of this data will help you decide what to sell your home for and what Brokerage and Agent to sell it with!

Oahu Single Family Home

The Oahu SFH Median Price Sold figures remain, for the most part, flat lined for the past 3 months, with the number of sales climbing over last month to 374 sold. The Days On Market (D.O.M.) is what is the most significant figure for this month at 52 days. This is an increase of +19% over last month. The number of New Listings For Sale is still climbing as well, increasing an already inflated total inventory for sale. The only good news in these figures, depending upon your situation, is that the Median Price of New Listings For Sale has continued to be pretty much flat line now for the past 12 months. Current median New Listing Price is $720,000. Current For Sale Inventory is 1,722 units.

To recap, inventory for sale in the past 30 days by +11% while the number of units that sold in the same period rose +5%. That's a spread of +54% difference between the rate of increasing number of sales and increasing overall inventory for sale. Not a good situation for most sellers. Certainly a great buying position for buyers!


Oahu Condo/Town Homes

The Condo/Town Home Market Median Price Sold figures have been pretty much flat lined as well for the past 7 months. Current Median Sold Price is $305,000. The total number of sales have been up and down like a yo-yo for the past 6 months with no consistency. Current number of sales is at 374 units. This is 42 units more than last month. Running parallel with SFH D.O.M., the Condo D.O.M. is rising at a disturbing rate. Current Condo D.O.M. is at 38 days. This is a +16% increase over last month. In Feb.'06, the number of sales was 487 units. The number of sales for May'06 is 605. This is a sales of units increase of +20%. The inventory for sale in Feb.'06 was 2,209 units. The inventory for sale in May'06 was 2,413. This is an increase in inventory for sale of +8%. Unlike the SFH market the increase in the number of units sold is higher than the inventory rate. This is good sign for both sellers and buyers.


Expired and Withdrawn Listings:
Important: When looking at the Market Data you must look at the Expired and Withdrawn. This is vital information not readily available to the average buyer or seller and you will need to get this information from your Realtor. Expired, Withdrawn and Sold listings are like a 'report card' on the Brokerage and the Realtor who listed them.

 


Specific details for your Neighborhood or this Monthly report are available for the asking by calling or emailing Mike Gallagher R.A., Prudential Locations, L.L.C. Mikeg@hawaii.rr.com 808-384-9015.

Add Your Own Comment