My overall take for Hawaii Real Estate has not changed. Due to increased taxes by our State and City & County of Honolulu in their mindless and uncaring manner toward their constituents, coupled with the National Obama Mantra of more Government in our lives is better...because it's the 'Socialist' thing to do...along with absolutely ridiculous new Federal Real Estate related regulation and reckless Government spending...we have NOT seen the worst. The worst is yet to come.
Please, whatever you do, do not buy into the news you may be hearing that the Economy is improving. It is not. Do not believe 'The real estate market is bottoming out.' It is not.
Look for a protracted decline in real estate values, followed by at the very least, a year's worth of flat line values going into late 2011 or possibly beyond.
For right now, protect what you have and hold onto your hats and pull up your socks as we are about to be hit by the all time highest Unemployment figures the Nation has seen since the early '80's prior to when President Reagan brought us to recovery. Get ready for much higher interest rates and inflation. Get ready for even more increased taxes from everyone and more negative State and Local budgets.
Hawaii, right now, is the most heavily taxed State in the United States when you take into account the number of taxes and the rate of these taxes we pay to the State and City & County.
There are only 3-4 States in the United States who do not have budgets under siege and their tax revenues are doing just fine compared with what they are spending. In other words, they have “Balanced Budgets.” These States are 'mineral rich' States like Alaska. So…that is approximately 48 States with Negative Budgets and in trouble.
If you are part of the 'Silent Majority' out there and you continue to keep silent, you are giving up our futures to the likes of Special Interest Groups that have already, killed the Hawaii Super Ferry, decreased business in Hawaii, decreased jobs in Hawaii, given us more State and City & County Employees, while giving us less Services at higher costs.
If you continue to be silent what we will see for our immediate future will be spelled: C A L I F O R N I A.
If you do not like it, then do something about it and allow yourself to be counted by the Left as 'mindless right wing radicals' by the Liberal dominated Press we are all well acquainted with.
Oahu Real Estate
Mid-Year ’09 Report
Written June 15th. 2009
Having to write this article in the middle of June for publication on July 1st. is not the right thing to do in presenting facts about the condition of Oahu Real Estate. Time/Warner Oceanic Cable article submission present me with challenges in attempting to portray an accurate picture as the accurate picture is based upon a 30 or 31 days / month. My article submission dead line is always the 15th of each month.
You see my predicament? I cannot accurately run any Excel Spread Sheets which produce the graphs without a full 30 or 31 days worth of numbers in order to present a clear and fair picture. I have to use the final month of June ’09 for an accurate Half Year Report.
So, what we will do here is give you accurate data up to May 31st. ’09 and my projections.
For a complete 2nd. Quarter Report ( Mid -Year ) for Neighborhoods, Condo Buildings and Town Homes for all over Oahu visit my website at
http://www.hawaiirealestatestatistics.com/website-guide.asp or http://www.hawaiilife.com/articles/
and http://www.aroundhawaii.com/business/real_estate/
The ACS % for Single Family Homes in May was 26%. Right now it is approximately 25% which is not what I expected. I would have thought that while we enter the peak selling season from April to September we would have an ACS % much higher and closer to 29%.
The ACS % for Condos is 20%. In May it was 19%. So if anything, the Condos are doing, in my opinion, better than expected, slightly. Considering that my overall projection for Condo sales and Median Sold Price is “Poor,” then I guess 20% is not bad.
The current Inventory for Single Family Homes is 1,712 with 429 in Escrow with Just Accepted Offers. The amount of Homes sold so far this month is 138. This data is of June 15th. ’09.
The current Inventory for Condos (which includes Town Homes) is 2,371 with 478 in Escrow with Just Accepted Offers. The amount of Condos sold so far this month is 137. As a % to total inventory this is not a good sign.
This data is of June 15th. ’09.
Overall you might say the Single Family Home market is fairing better than the Condo market and this is absolutely true. Buyers are afraid of Condos and rightfully so.
In my opinion the Average For Sale prices of Condos just got way out of hand over the past few years and their real market value was inflated. This was due to speculation, high demand and for the longest time, the really ridiculously high Average Single Family Home Sold price which in June of ’08 was $715,659. A condo was and still is a lower capitol investment vs. a Single Family Home, in Hawaii.
At the end of May ’09 the Average Sold Price for a Single Family Home was $646,660. That is a -10% drop in the past 12 months.
The Average Sold Price for Condos in May ’08 was $435,905 and in May ’09 is was $360,163. That is a -17% drop.
Let us take a look at what the % drops by Neighborhoods are for both Single Family Homes and Condos from May ’08 to May ’09 in order to truly see where the biggest drops really are.
How to read this map:
- Single Family Homes are preceded by RED ARROWS
- Condos/ Town Homes are preceded by GREEN ARROWS
- Single Family Home 2008 Avg. Sold Price is GREEN. For 2009 RED
- Condo/Town Home 2008 Avg. Sold Price is PINK. For 2009 BLUE
- % Change over 12 months is in each box after ARROW
(click to enlarge)
The largest losers of all:
- Kailua Single Family Homes -40%
- North Shore Condos -39%
- North Shore Single Family Homes -24%
- Makakilo Condos -24%
- Hawaii Kai Single Family Homes -23%
- Kaneohe Single Family Homes -15%
- Hawaii Kai Condos -15%Ewa Beach Single Family Homes -11%
There is one anomaly which is Kapolei Condos being the only +%. This is not a ‘fair’ analysis as in ’08 there were 16 sales and in ’09 there were only 3 sales to compare.
I think it would be best to also say a few words regarding Short Sales and Foreclosures.
Condo Short Sales and Foreclosures Pie Charts:
(Note: This Chart below is Inventory)
(Note: This Chart below is Sales)
Remember, these Pie Charts above and below are Year to Date Figures.
Considering all the Short Sales available For Sale on the Island we might want to ask how much are these categories contributing to the fall in prices?
Contrary to popular belief the Short Sales and Foreclosures all over the Island are NOT causing prices to go down to any great extent. The Short Sales and Foreclosures are impacting the fall in Sold Prices in certain Neighborhoods, particularly in the Metro and Ewa Beach Areas.
Condo Short Sales and Foreclosure Sales are only 8% of all sales on the Island!
Here are the Pie Charts for Single Family Homes:
(Note: This Chart below is Inventory)
(Note: This Chart below is Sales)
Remember, this Pie Chart above is Year to Date Figures.
Single Family Home Short Sale and Foreclosures are only 14% of all sales for Oahu Single Family Homes this year!
In short…(No Pun intended) Short Sales and Foreclosures are not of significant interest on Oahu…period. This is surprising, is it not? After hearing so much about buyers wanting to snap up Short Sales and Foreclosures, go figure!?!
What about the rest of the Neighborhoods?
Mililani
Mililani continues to amaze me. Mililani I believe is the best performing area on the Island and has been for years. If you are a buyer seeking to invest in a property that will not be as hard hit as other areas on the Island in this declining market or you want the chance to rent your property profitably, Mililani is a very good choice in Today’s Market.
If you consider that most buyers are purchasing in the lower price points for all neighborhoods on the Island, regardless if it is a Single Family Home, Condo or Town Home, you will see that Mililani fits right into this category.
Kapolei
Another area to pay closer attention to and if it fits your particular needs more so than another neighborhood, like Mililani, is Kapolei. This area is for right now, ‘On Fire.’ In May ’09 96% of all inventory For Sale was in Escrow with Just Accepted Offers.
One Last Final Word on Short Sales & Foreclosures
I cannot tell you how many people are out there looking up properties that are Short Sales and Foreclosures and asking agent for more information. For me, it is just too many inquiries to count.
If you take minute to try and get your head around these figures below you may learn a thing about what is happening in the Short Sale and Foreclosure Market.
In both Single Family Homes and Condos so far, year to date, it looks like to that roughly half of all Short Sales and Foreclosures are being Sold.
It also looks like most of the activity for Single Family Homes are in the Ewa and Leeward Areas. However, most of the activity in Condos are in the Metro and Ewa Areas.
My last thoughts for you…
So…last week I read this article by this local author on the Internet who says he was so lucky or something to have attended this short sale seminar.
By the time I am done reading this article I find myself in almost total disagreement with the author’s claims and comments.
Frankly, I wonder where this author gets his ‘Facts” from in this column. What really irks me is when I look up the Author’s name on Google…you know the same guy who is ‘so fortunate’ to have attended this excellent seminar, you discover…wow, the Author is none other than the On Line Marketing Director for the same firm who does the seminars! Gosh, how about that.
Be careful of what you are being told. Check all facts out for yourself. Are you getting part of the story? Always do your own research and verify others.
I hope you have enjoyed this article. I try to present the facts as I see them with no hidden agenda. Most of the time I feel I am successful.
I wish you all much Aloha,
Mike Gallagher
Broker in Charge, RE/MAX Honolulu
Ethics Complaints Review Committee Member
808-384-9015
mikeg@hawaii.rr.com
