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Whats Really Happening in the Hawaii Real Estate Market - August

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Aloha All: At the time I am writing this I will have switched my business yet one more time to another Brokerage.

I have been with RE/Max Kai Lani in Kailua for the past 6 months after coming from Prudential Locations for the past 7 years, except for a very short stint at Coldwell Banker Pacific Properties for 3 months.

I am now with a prestigious firm in Honolulu. As of Today I am with RE/Max Honolulu. It is the same RE/Max we all know so well for their balloon and undoubtedly their #1 position in Real Estate in the Mainland.

It would seem I have traveled the full spectrum of the typical agent who after serving and paying their dues with Big Box Companies such as Prudential and Coldwell Banker I now have gone off to work with a much more independent brokerage where you truly do run your own business.

It's been a very exciting 7 years for me in Real Estate Sales and I owe a debt of gratitude to Prudential Locations for my in the trenches training and coaching. I highly recommend any new agent to seek them out for an interview. They don't take just anyone. You have to be truly motivated and have the essential people skills to be accepted. Of course if you are a new agent and want a personalized course given to you, join me at RE/Max Honolulu and I'll give you one!

My progression upon my career path has awarded me many National recognition awards, many closed sales and a slew of new clients and new friends.

I know have the opportunity to work with one of the best in Town, RE/Max Honolulu where I join them as Broker In Charge in reviewing contracts and mentoring agents and at the same running my business. 

I have been trying to decide to do something a little different with these columns to just change them up once in a while. I intend to give you, the reader hard core information to help you in your choices regarding Real Estate in Hawaii. This is the first of these articles.

Much Aloha, Mike Gallagher/ Realtor/Broker In Charge/ RE/Max Honolulu





Oahu Single Family Homes


I am sorry to say that this... but I am not sure what is going on right now. It's a little disconcerting as what I can only put my finger on is that the ACS % for Oahu Single Family Homes had been running much higher earlier in the year. It's weakened now to 24%. The same thing is happening in Condos too. Also earlier in the year the Condos were running a higher ACS % than the Single Family Homes for a few months and now they are lagging behind the SFH ACS %.

Inventory for sale doesn't seem to be going up which is a healthy thing for the market. But when you start to look at the sales rate I just don't understand as July and August should be two of the strongest months in sales every year. Right now the sales have dropped -11% for the month of June vs. May.

The Average Price Listed is $961,120 and the Average Price Sold is $823,379. What this shows us is that the average for sale prices are pretty high. This means the typically higher end is still on the market for the majority of listings for sale. The low end of the market for sale doesn't seem to be anywhere as the average sold price is pretty high too at $823,379. This indicates that the majority of the sales are taking place over the $800,000 listing threshold.

The graph below will show exactly what the ACS%'s were for the year so far. As you can see it hasn't dipped much but clearly it is not going up. A higher ACS % would have resulted from lower inventory and higher amount of sales going into escrow with Just Accepted Offers or “Active Continue to Show.”

I do not track Sold data as much as Active Continue to Show data. Sold data is at least 45 days old and ACS data is only 4-5 days old. Sales Agents must change the status from Active to ACS within this period of days after an Accepted Offer is received and executed by both buyer and seller. The ACS data is a more accurate method of judging the sales direction.


As you can see the Median Price Sold is a much more affordable $685,000 (if you can call that affordable) vs. the Average Sold Price of $823,379. Inventory in this $600k+ range is out there and is being purchased on a continuous basis. But it is important to note that as the graph shows this number is rising and pretty much risen all year long so far.


The sales rate has been good all year and each month has risen steadily. There is a slight dip in sales for June vs. May but this is not a trend. A trend is something that takes place for 3 months or more of time. We will just have to see what July brings in sales.



Another very good sign for a healthy market is the Days On Market or D.O.M. This is the number of days it has taken to get an accepted offer on a listing for sale. As you can see this has steadily dropped.

The new listings per month are up and down with no real consistency. The Median Price of these new listings has remained all year around the $700,000 level. This correlates to the Median Price Sold of $685,000.



Whoa! Look at the for sale inventory! Just a little bit of a jump here since April! Well at least it's leveling off for the past 2 months.


Now if we look at the overall Median For Sale Price of all listings we see a different story. Definitely prices are coming down as far as asking prices. Good news for all buyers!


Oahu Condos


Oahu Condos ACS% is what bothers me the most. We have seen where the ACS% has come down on Single Family Homes and that is a little disturbing, but this kind of drop in Condo ACS% is off by
-6% points or -21% since April. You have to go back to the graph of ACS% for SFH's and see that in April SFH's were 24% and in June it was 24%. Now in June for Condos it's 22%. See my point? In March and April the ACS% for Condos was 27% and 28% respectively. Now at the end of the month of June we have 22% which is now -2% points or -8% down from the Single Family Homes when earlier this year this % was higher than Single Family Homes! Let's take a look at the inventory for sale situation.

In April the inventory was 2,301 which so far has been the high point for the year. In May it dropped dramatically and is now climbing back up at the end of June to 2,275. The only thing that made April such an outstanding month for Condo sales was the sheer rate of demand. ACS% was running 28% and the inventory was running at all time high at the same time. ACS%'s do not go up at the same time as there is high inventory unless there is high demand.

Now conversely we see the ACS% for June at 22% while the inventory is less than April! Demand is what is making the difference in June for Condos.


Now sales don't look like they are off at all for June. In April the sales were 527. So we can see now that Sales which ='s Solds, which is 45 day old data, has remained high for Condos all year since February. The only way you are going to get a low ACS% for June is if the inventory increase is outpacing the demand.


As we can see from the graph above this is the flow of Just Accepted Offers or ACS. See how high it was at the beginning of the month? Now at the end of June the final figure is 501. Why?

As an escrow moves forward from the date of the Accepted Offer and moves from Active to Active Continue to Show it takes about 4-5 days. From there it takes about 10-14 days to do an Inspection of the property by the buyer's Inspector. Immediately after this inspection and the inspections is ‘approved' by the buyer signaling the seller that the buyer is going to go through with the purchase the status changes again to Pending for this transaction. Please remember an escrow's life span is about 45 days.

Now let's discuss Pending Sales. Pending Sales are those that have moved beyond Active Continue to Show or ACS. Pending Sales are classified as sales in escrow that are just about to close and record.

See the date above June 29th and how high the number is? That is because of all the escrows that were due to close by the end of the month. Also note the rise at June 19th. Those are the escrows that went under contract with a Just Accepted Offer at the beginning of May. Now they too are closing roughly 45 days later. We should see a high number again at the end of July as those escrow in Pending move to the final category or stage, Sold.

What you should keep in mind as well along with this are the amount of Withdrawn and Expired Listings that have fallen out of escrow, or never made it to escrow and are now for the most part off the market.




See how in January the Withdrawns and Expireds are sky high? That's because those are all the listings that couldn't sell the last quarter of the year. They were taken off the market.

The Withdrawns and Expireds for June of 287 Condos is a pretty significant figure. That number equates to about 13% of the total inventory for sale. Hopefully what we are not going to see....
will be a lot of Withdrawns and Expireds at the end of next month and August, considering the slow down in Just Accepted Offers we are experiencing right now with the ACS% at 22%.

As we can see from the above graph the Average Price in Escrow with a Just Accepted Offer is at $422,137 and the Average Sold Price is $403,241. Both of these numbers are clear indications supporting all of the above discussion condos that Condo Sales and listings are in the upper area of $400,000+.

Please note that “Median” and “Average” are very close in mathematical definitions. “Median” means the “middle value.” Half of the values are above the Median, half are below. “Average” almost always refers to the arithmetic mean. In general, however, the average could be any single number that represents the center of a set of values. The median of a set of numbers is the value for which half the numbers are larger and half are smaller. If there are two middle numbers, the median is the arithmetic mean of the two middle numbers.

This is why you will see a difference in the figures of “Average” and “Mean” on all of the graphs.

From the graph above titled Median Price Sold for Condos we can see that the price point has risen for June.

This is a clear indication of buyers and sellers of more fully featured condos are successful in selling and are what the buyers are looking for to purchase. Typically the best selling Condo configuration will be 2 bedrooms and 1 and one half baths with 1-2 covered parking spaces. This condo configuration can also be described in Real Estate jargon as 2/1.5/2 which means 2 bedrooms, 1.5 baths and two parking. Security, pool, a Maintenance Fee under $500/month and washer and dryer in the unit are the preferred features.

However, the graph above may indicate more 3/2/2's or three bedrooms, 2 baths and 2 parking with the same features. I am deducing this purely from the price point of $384,000 which is a little higher than the typical 2/1.5/2 typically sells for.

As for purely investments with the intent not to move into the unit once purchased but to rent it out the typical Landlord is going to be out of pocket $200-$300/month as the rents usually will not cover the monthly mortgage and maintenance fees. However an investor/landlord with cash will be able to borrow less by putting more down and will have less negative cash flow, breakeven cash flow or positive cash flow depending on the purchase price, the down payment, interest rate, term, maintenance fee and the amount of rent the investor can get for the condo.

Investor/landlords who have the cash will want to look for condos in ‘popular' areas such as Kailua, Hawaii Kai, Pearl City and both Mauka and Town areas of Mililani. These areas the buyers and renters have chosen to live the most. Salt Lake might be the fourth consideration as it is primarily an area of all condo buildings and well situated in respect to access to Town and nearby amenities.


Days On Market for condos is a very short 37 days until a seller will get an accepted offer. This number is higher for Single Family Homes who's D.O.M. is currently 41 days.


New listings coming onto the market/month have risen in June and I expect this pattern to follow the yearly pattern of rising until the end of the year. As a note I am always surprised that most sellers wait too long to put their investments up for sale. I have always suggested the following in selling your property first by preparing it for sale in Jan-March. What a seller wants to re-paint the unit, fix plumbing issues, redo the Kitchen and baths, etc. and then put the property on the market in late April this time period is just ahead of the prime ‘selling season' of June, July and August. A seller does not want to be selling their unit in a time of when most sellers are doing the same thing as they are less apt to get the price they want. An investor should sell their property at a time of less inventory and like competition which would be April through May.


Readers will want to remember that the Median Sold Price was $384,000 in June. The graph above shows that the Median Price of New Listings coming onto the Market each month of this year has been up and down, but the month of June shows this figure to be at $350,000. This is -$9,000 less than the Median Sold Price. So what we are seeing is that although the Median Price Sold is higher the Median Price of New Listings for June is lower. This means more sales will probably be recorded over the next 60+ days just slightly lower than the $350,000 mark. This is my guess, but all investors should check their resources for further analysis.

As we can the Median For Sale Price of all listings, not just the new listings coming on board each month, has steadily climbed upward over the last three months. Please remember this is a result of higher priced new listings coming onto the market. Do not confuse this with the graph showing Sold Prices.


I hope you all have enjoyed this report and found it beneficial in your research of Hawaii Real Estate. As always, please remember to check as many resources that you personally trust to properly arrive at an overall evaluation of this subject matter. All buyers and sellers should draw their own conclusions and conduct their own investigations.

Final Notes

In evaluating Hawaii Real Estate investments you should conduct your research on the data, interview agents and brokerages and consult mortgage lenders. By all means feel free to contact me for your personal questions you may have. I can be reached via the below information:

Mike Gallagher Realtor/Broker/Broker in Charge
RE/Max Kai Lani
808-237-5300 Office
My Cell: 808-384-9015
My Email:

Neighborhood Reports and a wealth of Hawaii Real Estate subject matter can be found also at:

I wish you all my Aloha and ‘Good Luck' in your investigations!
Much Aloha,
Mike Gallagher

P.S.: If your viewing this report on the internet please see the New Monthly Feature:

The Honolulu Board of Realtors Statistical Report
An Outstanding Resource for all.




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