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What Is Really Happening In the Hawaii Real Estate Market - September 2006

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Oahu Single Family Homes

At the end of July '06 there were 2,396 Single Family Homes (SFH) Sold on Oahu. This figure was off by from a year ago, July'05 of 2,618 or -8.5% decrease over the past 12 months. This is not unusual as you must remember that the Market turned into a Buyer's Market in Dec.'06 and July'05 was in the height of the Summer Sales Season.

Sales in Hawaii are seasonal in respect to when most of the sales activity is at it's highest and lowest during a 12 month year. Typically strong sales occur every year beginning at the end of March through October. Sometime during the end of month of October the sales drop off dramatically and consequently inventory rises as a result of this drop in sales.

To sum this up, the best time to sell is during the height of the Season from March to October and the best time to buy is from October to February. The reason for the sales decline in October is simply most people do not want to sell during the Holiday Season. Those people selling their homes who remain on the market after October should pull their listings and re list again in March of the following year. For buyers, the best time to purchase is after October because those Sellers still on the Market 'Have to Sell' and are motivated! The buyer is more apt to 'get more for their money' during this time frame.


At the end of July'06 there were 1,885 Single Family Homes For Sale. In July'05 there were 958. This is 12 month period of increase of +49%. Remember the Market was very strong in July'05 but Inventory For Sale right now is at high. Sales are off for this 12 month period of -8.5% but inventory is up +49%. Below is what has happened to inventory in the past 18 day of Aug.'06. Inventory is still rising at a +19% for the month.







In July '06 there were a total of 379 Single Family Homes Sold. That is approximately 13/day. From Aug. 1st.'06 to Aug. 19th'06 there are 210 Homes Sold. That is 11/day. It is too early to tell, but from this indication Sales of Single Family Homes may be slowing. Overall Days on Market (D.O.M.) at the end of July was at 43 and has been dropping for the past 3 months. A very strong indicator of how fast things are moving!





The number of days it takes a listing For Sale go into Escrow with an accepted offer as of Aug. 19th. is 72 Days. Perhaps this is another indicator along with the number Sold to date of the Market beginning it's 'Seasonal Cooling Off' period.





The average Sold price to date for the month of Aug.'06 so far is $777,000. From I can tell, I believe that the average listing prices are higher right now. I believe they are in the $8's and $900,000 range, but the Sold prices are averaging in the $7's. I think that most of the market is experiencing abnormal amount of higher ended properties flooding the market to get a quick sale and get out. I also believe that a great number of Buyers are now standing on the side lines waiting and or taking their time to purchase in hopes of prices coming down. They may get their wish! But... .I must remind everyone that prices are not going to fall from the sky. They are going to go down gradually.

Ewa Plain is a prime example. Currently there are 341 Single Family Homes For Sale in this area. Last month there were 310. Average Sold Price in July'06 was $515,000 which considerably down from the previous months of this year.





Oahu Condos and Town Homes

In July'06 there were 498 Condo/Town Home sales. That is an average of 16/day. Currently to date for the month of Aug.'06 there are 349 and that is an average of 19/day. Obviously Condo/Town Homes are still very strong and HOT! June's average was 21/day. Still a little behind June's numbers, but still strong!







Again, as in SFH's I believe that the Condo/Town Home Market is primarily selling at a higher range due to a large amount of higher priced Condos on the Market. Another example of High Inventory and High Priced Listings is Hawaii Kai. Like the Ewa Plain, both Inventory and Days on Market are High.







As of Aug.'06 Hawaii Kai Condo/Town Homes Sold units to date is 12. That is approximately .67/day. In July the rate of Solds was 4.45/day. Sales in Condo/Town Homes in Hawaii Kai are definitely slowing down!!!

Although the Market is generally strong in both SFH's and Condos there are certain Neighborhoods that are not doing as well as the general whole. This is due to too much Inventory For Sale and a strong 'guess' that Buyers are waiting unless they see they have to have or it will be gone!

Here is the part again on 'Whether or Not I should Buy or Sell NOW?' For those of you who might still have this question, you have to ask yourself 'Will I hold onto the property for the next 5-7 years? If 'YES'... .the answer is YES! If the answer is 'No'... the answer is NO! The Market is going to still adjust for several years and when we come out 'on the other side' the Market will be at the bottom and then it will rise again!

'What goes UP, Must Come Down.' 'What goes Down, Must go UP!

Remember, each of us has different needs and goals. If the time is 'right' and 'circumstances are right', do not wait to buy or sell. This will be true as long as you are not looking to invest and quickly get in and out. Even if you are a Contractor and Buy and Sell properties all the time, you must figure in Market change into your calculations before buying and investing in repairs, alterations and additions. By the time you are done and ready to Sell, the market will have changed.

Just look around at all the FOR SALE SIGNS!!! There are a lot of Investors from the Top of the Market who purchased, renovated for quick profit and are now contemplating renting them because they can't sell them and they are hoping that they will still have a Positive Cash Flow!

Individual Neighborhood Statistics, Graphs and Predictions are available by email and regular mail by request every month. Forward all requests to:

Mike Gallagher R.A.
Prudential Locations
Mikeg@hawaii.rr.com
808-384-9015
116 B. Hekili St.,
Kailua, Hawaii 96734

If your property is listed, please disregard. It is not our intention to solicit the offerings of other Brokers. We will cooperate fully. This publication is neither endorsed by Prudential or Prudential Locations, L.L.C. The opinions and information are only those opinions of the author. Statistics are from the Honolulu Board of Realtors. All material is deemed reliable but not guaranteed. Use of these graphs and information is expressly prohibited without permission.

The views and information contained are not provided or endorsed by Oceanic Time Warner Cable or any its affiliates. The content provided is for general information and entertainment purposes only. Please seek professional advice before acting on any information contained within this web site. Any unauthorized reproduction is prohibited.

Comments

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HawaiiLife — Thursday, July 5, 2007
reportreply
Kauai is also showing a shift to a buyer's market. However, sales remain strong, but more inventory is becoming available. You can see this in the amount of listings as seen here: http://www.hawaiilife.com/kauai_real_estate/



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