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What's Really Happening in the Oahu Real Estate Market

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Aloha All and Happy New Year!

It has been an interesting year in Real Estate for Oahu and all over the Islands. There really is not much difference between what has been happening on Oahu as compared to the Outer Islands. It’s all pretty much the same.

Sales for the year were actually pretty good. In the beginning of the year it was a little concerning not knowing what was going to happen in the relatively new Buyer’s Market. Questions such as “Are Prices going to Hold, are prices going to go down, are prices going to go down so fast that it will look like they are falling out of the sky?” All of these questions were heavily on the minds of most Realtors and Consumers alike.

As we entered the first quarter of ’07 as we all collectively held our breath, it became apparent that none of what was being reported in the Mainland was happening in Hawaii. This was perplexing to most folks and so we waited…we waited expecting the worst to happen because what the heck, it was happening in the Mainland, right?

By the end of the 1st quarter we finally realized that our market was just not going to follow the trends of the Mainland and everyone started to relax…until the dire financial mortgage news hit the streets. This news shook us all up as now we were concerned that there just wasn’t going to be any mortgage money available, the lenders were tightening up all the credit standards and we were anticipating a big drop out of potential buyers. Well, this didn’t happen either in Hawaii.

What Did Happen…

(Due to article submission guidelines this report is based upon 11 months’07)

There was a slight drop in both Condo and Single Family Home sales between the months of November’06 vs. November’07 equaling -10% for Condos and -16% for Single Family Homes in units sold.

Total unit sales for Single Family Homes were off by -8.3% and Condo/Town Home unit sales were off -13.1%. Overall Oahu combined unit volume was off by -11.3% as of the end of November vs. last year.

Total combined SFH and Condo/Town Homes $ Volume went up down by -7.5%. Total $ Volume went down for Single Family Homes by -6.2% while the Total $ Volume of Condos & Town Homes went down by -9.2%.

The doom & gloom folks who thought prices were going to rapidly come down were incorrect. It’s just not going to happen with Hawaii as an internationally renowned destination. Now this is not to say that certain neighborhoods on Oahu went into the tank on equity and their Average Sold Prices dropped. They did, but many others went up in price as well.

The biggest losers in Single Family Units Sold are:

  1. Makaha -22.4% - Prices are too high
  2. Makakilo -19.6% - Prices are too high
  3. Pearl City-Aiea -19.1% - Prices are too high
  4. Aina Haina-Kulioulu -18.3% - Prices are too high and Low Inventory
  5. Hawaii Kai -16.1% - Prices are too high
  6. Ewa -13.5% - Prices are too high
  7. North Shore -12.8% - Prices are too high
  8. Windward Coast -11.1% - Prices are too high
  9. Mililani -9% - Prices are too high and Low Inventory
  10. Waipahu -5.6% - Prices are too high

The biggest losers in Single Family Homes in Median Sales Price drop are:

  1. North Shore -13.4% - Prices are too high
  2. Windward Coast -11% - Prices are too high

The biggest winners in Single Family Units Sold increase is:

  1. Waialae-Kahala +13.4% - Major Popularity and Sellers mostly get their price
  2. Kaneohe +8.2% - Very Popular because of Price and Sellers mostly get their price
  3. Moanalua-Kalihi +7.1% - Very Popular because of Price and Sellers mostly get their price

The biggest losers in Condo/Town Home Units Sold are:

  1. Windward Coast -48% - Prices are too high
  2. Makaha-Nanakuli -44.7% - Prices are too high
  3. North Shore -31.3% - Prices are too high
  4. Ewa -31% - Prices are too high and too much inventory For Sale
  5. Wahiawa -27.7% - Prices are too high
  6. Makakilo -27.3% - Prices are too high and too much inventory For Sale
  7. Pearl City-Aiea -25.6% - Prices are too high and too much inventory For Sale
  8. Waipahu -24.4% - Prices are too high
  9. Kapahulu-Kuliouou -13.9% - Prices are too high
  10. Moanalua-Salt Lake -13.7% - Prices are too high and too much inventory For Sale

The biggest losers in Condo/Town Home Median Sales Price drop are:

  1. Hawaii Kai -4.4% - Prices are too high and too much inventory For Sale
  2. Ewa -4.6% - Prices are too high and too much inventory For Sale
  3. Wahiawa -4.3% - Prices are too high
  4. Mililani -3.5% - Prices are too high and Mililani Mauka was preferred choice

The biggest Single Family Home winners in Unit Volume Sold:

  1. Waialae-Kahala +13.4% - Prices are very high, miscuing the data and popular neighborhood
  2. Kaneohe +8.2% - Prices are very high, miscuing the data
  3. Moanaloa-Kalihi +7.1% - Very Popular prices and low inventory For Sale
  4. Honolulu +4.1% - Very Popular prices and low inventory For Sale

The biggest Single Family Home winners in Median Sales Price Increase are:

  1. Wahiawa +8.9% - Prices are very high, miscuing the data
  2. Makaha-Nanakuli +6.9% - Prices are very high, miscuing the data
  3. Aina Haina-Kuliouou +5.6% - Prices are very high, miscuing the data and low inventory for sale

The biggest Condo/Town Home winners in Unit Volume Sold are:

  1. Kalihi-Palama +12.2% - Very Popular prices and low inventory For Sale
  2. Ala Moana-Kakaako +8.5% - Prices are very high, miscuing the data

The biggest Condo/Town Home winners in Median Sales Price Increase are:

  1. Windward Coast +84.6% - Prices are very high, miscuing the data
  2. Ala Moana-Kakaako +44.8% - Prices are high, miscuing the data & newly built inventory added
  3. Down Town Nuuanu +14% - Very Popular prices and low inventory For Sale
  4. Moanalua-St. Lake +8% - Very Popular prices and low inventory For Sale

Now, another way to look at this…

What’s Really Happening?
In some of these
Neighborhoods


Same period Jan. to Nov. 30th. Sales: ‘06 = 3,642 / ’07 = 3,339

 
Almost across the board
 

 Not the best %

  
Same period Jan. to Nov. 30th. Sales: ‘06 = 6,826 / ’07 = 6,802

  
Almost across the board

  
Slight drop


Much better %

  
January’08 is going to be huge!

  
Same period Jan. to Nov. 30th. Sales: ‘06 = 156 / ’07 = 126    Low sales rate


Median Sold Prices actually went down
 


These are Asking Prices

  
High Withdrawn & Expired Listings rate


High to low sales rate

  
Median Sold Prices actually went up


  
High to low Asking Prices

  

 

 

 
3rd. Qt. High to low Withdrawn & Expired Listings

 

 
Same period Jan. to Nov. 30th. Sales: ‘06 = 254 / ’07 = 213

 
Almost across the board but heavily miscued by higher priced listings for sale

 
Large rise in Median Sold Price because of higher priced homes selling

  
Big difference between Asking Price and Sold Price

 


Same period Jan. to Nov. 30th. Sales: ‘06 = 235 / ’07 = 233

 
Large increase in Asking Prices

  
Slight increase

  
Small difference between Asking Price and Sold Price

 
January’08 we will see a large amount

  
Same period Jan. to Nov. 30th. Sales: ‘06 = 636 / ’07 = 550 Low Sales rate

  
High to low

 
High to low

 
Small difference between Asking Price and Sold Price

  
3rd. Qt. High to low rate

  
Same period Jan. to Nov. 30th. Sales: ‘06 = 466 / ’07 = 322 Low Sales rate

 
Low to high

  
High to low


  
Very large total numbers

What you are seeing here is definitely a slow down of sales in both Single Family Homes and Condo/Town Homes in ’07. However the rate of decline is much larger for SFH’s than it is for Condos. The % of Sold Price to List Price is much lower than Condos as well as sellers simply have not been able to get for their homes what they thought they could. Apparently agents just went along with the Seller’s Sales Price at the time of the Listing was taken or the agents simply didn’t know any better and the result was an overpriced home hitting the market. This is why Days On Market (D.O.M.) have gone up and their were many Withdrawns which indicated a lot of price changes as well as a lot of Expired Listings where they simply pulled from the market.

Condo/Town Homes slowed but the prices the Sellers got for their units were much better and more realistically priced when they came onto the market as the Sellers were able to overall get a much higher % of Sold Price vs. List Price.

In addition to this the sales emphasis this year has been on Condo/Town Homes as the preferred choice of most investors and not Single Family Homes. One obvious reason for this is not just the much higher price for a SFH but most investors were figuring correctly that SFH prices were going to come down. In fact they did, but not really anywhere near where some were figuring they were going to drop to.

Real Estate Annalists are predicting the ’07 sales trend to be roughly the same for ’08. They are not expecting any sharper declines in unit or $ volume sales than what was turned in for ’07.

I quoted at the beginning of this article Total Combined Unit Volume and Total Combined $ Volume for Single Family Homes and Condo/Town Homes. They were -11.3% for Unit Volume and -7.5% for $ Volume.

I would pay much attention to the Unit Volume Sales than the $ Volume as the $ Volume was inflated to begin with as a much larger % of Single Family Homes priced well over $1,000,000 were taking up so much of the For Sale Inventory as compared to lower priced For Sale Inventory.

11.3% - Is the # you want to remember for results from ’07.

I sincerely hope you have enjoyed this report and I wish you all much Aloha and Happy New Year!

I want to thank everyone for their continued support, my clients, my friends and most of all my Editor!

You can visit my website for additional information at:

Hawaiirealestatestatistics.com

Until the next time, I wish you all much Aloha!
Mike Gallagher, Broker in Charge
RE/MAX Honolulu

Disclaimer

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.

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.


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.


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Puna
Regarding the Kilauea volcano lava flow.




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