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What's Really Happening in the Oahu Real Estate Market - September 2007

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8/15/07 Report

Overall market conditions on Oahu are very strong. This is very much in contrast to what we are hearing on the news everyday from Mainland housing markets. It is the demand that is making the difference here. There are cases of over supply which playing havoc with sales values but these are isolated pockets in primarily the Ewa Plain areas.

ACS means “Active Continue to Show” is real estate terms. It is the next step towards closing after a seller lists their property for sale as “Active.” As soon as the seller receives an offer the agent selling the home must change the status of the listing from Active to ACS telling the public and all realtors that they now have an accepted offer and are possibly looking for a back up offer. This must be done by the realtor within 4 days or the Honolulu Board of Realtors will fine the agent. So…this is fresh data. This is not Sold Data which is 45 days or more old.
As you can see on the Map the little squares containing %’s are the ACS %’s. This % is derived by dividing the number of Active Continue to Show by the Total Inventory For Sale. This gives us a clear indication from the freshest data available of demand and which way the market is headed.

The overall ACS% for Oahu as of today for Single Family Homes (SFH) is 24%. This means that 24% of the entire inventory for sale is now in escrow with a Just Accepted Offer.

If you look in the Ewa Area you will see 20% and 21% which is below the Oahu Average of 24% which means it gets a down arrow in red. Those above the 24% ACS get a green up arrow.

If there are no escrows with Just Accepted Offers for the Month the Map was made then the ACS% is 0%. If there are no Solds for this same period you will see “No Sales.”

The Average For Sale Price is in green and the Average Sold Price is in red. These are the key indicators for each Neighborhood and you will see them for SFH first and then Condos.

I have decided to do this month’s report a little differently for you as deadline for submitting this article is 8/15/07 and each month’s report is due on the 15th. This means that this report submission date is between the last report of the Honolulu Board of Realtors Sales report and the next new one due out approximately the 3rd of every month. So I have decided to give you a Mid-Month Report.

The data in this report cannot be construed as trends as the data period is only two weeks. Trends come from two or months of consecutive data. If you want to see true trends then visit my website where you will have access to the graphs spanning the entire year. My intention here is to just keep you up to date on what is happening since the last full report for the previous month was issued.

Overall inventory has increased only by +5% a good thing. But in certain neighborhoods the inventory has increased at a much higher %. Remember…this is over two weeks. Everything in this report is the from the first two weeks of August. The inventory for the entire month of August could still go up or down, but I think it will continue to go up to the tune of +7% by the end of the month.

As I mentioned, demand is very strong. In light of a small increase in inventory there was an increase of +11% in sales going into escrow so far this period. This definitely is outpacing the inventory increase. This is a very good sign for sellers.

Oahu Condos

For the first two weeks of August inventory has risen by +7%. This is just slightly ahead of the Oahu Homes SFH’s rate of +5%.

Overall Condos with Just Accepted Offers have risen significantly by +14% over the first two weeks of August. This shows a very, very strong demand for Condos.

As you can see the sales of Condos for the first two weeks of August is very good at 223 sold from Aug. 1st to Aug. 15th. This same period last month there were 205 condos sold. This is a +8% increase in the sold rate.

The Average Sold Price is $347,926 which is usually a 2 or more bedroom unit with at least 1.5 baths. The very bad side of the condo news so far for August is the rate of Expired and Withdrawn Listings. In the first two weeks it is up 153 Expired and Withdrawn Listings. What this means to me is I still think condo for sale prices are still a great deal from unrealistic expectations of sellers and these expired and withdrawn listings are indication of price decreases.

Condos are still the preferred investment opportunity I tell most of clients. They will continue to be for some time to come. The best configurations will be 2-3 bedrooms with 2 baths and 2 parking, fee simple and located in these Neighborhoods: Kailua, Mililani Mauka and Hawaii Kai.

These three neighborhoods will give you the best return as they are the neighborhoods most buyers are purchasing. This means demand is high and typically every year these same neighborhoods are the same areas buyers flock to. Mililani Mauka is a new popular area for condos this year for buyers. They are newer, affordable and a good value. They are also very rentable.

For my money though? I’d put it in Kailua. Period. Kailua right now has been going through some very, very important changes and is starting to look like the ‘Carmel’ of Hawaii. The Town has been retrofitted with a new look to all of its buildings. Median strips and main roads have been widened and landscaped. New retails shops have opened as well as new restaurants. Plans exist to tear down everything on Hekili Street where the Bowling Alley is, close the road and put up a Mall.

Most important of all…the low income, ugly three story walk ups across the street from the Park next to Times Supermarket are being torn down and upscale Condos and Town Homes will be going up there. They will be priced from $500k on up to just over $1million. This means everything on Aoloa Street is going to go up in value. This is my opinion only and you need to do your own research, but I think of Aoloa Street right now as Solid Gold.

I recently sold a condo at Koolau Vista on Aoloa Street for $350,000. It was a 2 bedroom, 1.5 bath with 1 covered parking. I sold the same unit two years ago for $170,000. Now if that isn’t price appreciation, I don’t know what is!

Note how the Average Sold Price in Red is higher than the Average For Sale Price in Green is for Windward Cove, Koolau Vista and Kukilakila? This is where you want to invest in Kailua Condos.
Do you want to make money? Then do it!

One of the biggest mistakes you can make right now is to take make a generality of the horrible news in the housing financial markets and the real estate market in general of the Mainland. This is not the Mainland! Condos are the best and will be the best investment in Hawaii in years to come!

You will not see a lot of Expired and Withdrawn Listings in Kailua Condos.

Kailua Single Family Homes

Indications are that Kailua SFH’s are becoming just too expensive as you can see from indicators of certain neighborhoods.

But…it sure isn’t slowing down sales!

The rate of Expired and Withdrawn Listings should show us some good price reductions.

Here is another Area doing very well unlike its counter part…Kaneohe Single Family Homes.

Everything except Hokuloa is being purchased in great numbers. Hokuloa will be along shortly in this league I predict next month or by the end of August.

The downside for sellers is the significant rise in inventory at the rate of +15%.


Kaneohe Condos are HOT. The amount of Expired and Withdrawn listings are very, very, low.

Things may be starting to cool off in Hawaii Kai Single Family Homes.

 Things are not looking that good for Hawaii Kai Condos either…but there may be some bargains to be had out here.



Things are really heating up now finally in Ewa as the prices are probably the most affordable on the Island. Ewa has struggled all year as major for sale price decreases have occurred in order to sell the homes in this area. Ocean Pointe in particular is a disaster for a seller right now as at last count there was 47 of them for sale in this community. That is way too much inventory available for a seller hoping to sell and get their price.

I think the owners who are selling now in Ewa are starting to get the idea and have lowered their expectation on sales price and sales finally are starting to take off in the Ewa area. Inventory is on the rise and so are Expired and Withdrawn listings as sellers are still lowering their prices or removing the homes for sale and renting them.

Buyers are now snapping up these better priced homes. Where else on the Island are you going to buy a 3/2 that almost brand new for mid $500’s or less?

I must caution buyers of Ewa property though as further price erosion will occur over the next few years and in general for the whole Island, but particularly in Ewa. Over supply of new construction and further construction of planned communities will only add to the over supply of inventory for sale that already exists.

If you are planning on getting in and then out again in a short period you are going to mostly like loose your…property value. Be careful.

From here on in this article I will post some activity in other neighborhoods but without the comments and analysis. If you need complete information please do not hesitate to call or email me.

Finally I will end this report with a short “Mike’s Hot Button” discussing the inattention to photos on the internet in properties that are posted to the internet.

Mike’s Hot Button

I remember just a short time ago when a home sold in a number of days, not weeks. Now it takes at the very best over a month to sell a home and at the worst about three months or longer. I’ve seen homes on the market for sale for a year. I have to wonder why someone can’t sell a home in a year. Something has to be wrong. Could it be the price, the location, the way it shows?

Actually it can be all three of those reasons why a home cannot sell in a year. I don’t understand why someone would try to sell a home for a year without fixing at least some of those challenges. After all a home for sale for a year is very long time. Certainly anyone can figure out that something is wrong and you don’t have to have a Real Estate License to figure it out.

Just as important to selling a home is the homes presence on the internet. We all have to remember that the internet helps to sell the home about 85% of the time. Buyers use the internet to shop for homes about 85% of the time. Very few buyers depend upon the agent to find the home.

Considering how important this factor is…then why do we see stuff like this? Why do agents do things like this? Why do sellers allow their agents to do things like this?

I am talking about Photos. It doesn’t take a Rocket Scientist to figure out that if 85% of those buyers out there looking for a home are using the internet that photos of the property for sale just might play a very important role in the sales process.

Does the Honolulu Board of Realtors or the Honolulu Real Estate Commission teach anything having to do with Sales promotion? The answer is no. I don’t agree with it and hopefully I can convince someone at these two boards to change this. Right now these two entities teach very important aspects of properly executing the sale of a client’s property, legally and fairly. Both entities play a very, very important role in educating the agents, the brokerages and the public as well as playing a role in protecting the agent and the public from unfair, illegal practices that may come into play from less than ethical practices.

To not teach the agents the skills necessary in order to sell a home promotionally is a short fall for both the agent and the client.

Following is one of my favorite subjects, photos of client’s properties for sale on the Multiple Listing Service. Please note these are shocking photos and not suitable for everyone. Please remember this is an agent’s responsibility and it is also a client’s responsibility to help sell the home.

 Wow how inviting. This is obviously an empty home that is staged by the agent. No lighting. There is improper back lighting causing the camera to take its light reading from the window causing the rest of the picture to be dark.

 I don’t’ know where to start on this one. Same lighting problem and way too crowded of a room to show properly to someone on the internet perhaps how spacious the home is.

 Don’t see anything wrong with this picture? Would it help if I told you this was the only photo available on the internet for a year?!

 Maybe there was a view. Maybe their was the neighbor’s bedroom out this window and that is why the drapes are drawn? Maybe a little furniture and plants could have helped this room?

 Or…heh…let’s shoot the home at Night!

 This one probably had no electricity available in order to turn the lights on in the Kitchen…

This is one of my favorites…

Here’s another only photo for a year…but this time shot at night when lighting is best!


and last but certainly not least in this line up is the Number 1 Winner….

 Please remember the seller allowed this to happen too!


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 Honolulu
808-951-3200 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.

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 RE/Max or RE/Max Honolulu. 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. Any copying or distribution of this material herein is STRICTLY UNAUTHORIZED without express written permission from the Author.

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