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Business :: Real Estate :: Understanding the Hawaii Real Estate Market :: Oahu Real Estate Report 1...

Oahu Real Estate Report 12 Month Year 2009

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The first Dollar amount in each of the boxes above in the Neighborhoods show the Average Sold or Median Sold in RED for Single Family Homes and the second Dollar amount above this box in BLUE show the Average or Median Sold Price for Condos.

Again, the S.F.H.’s are noted with Red Arrows and Condos are Green Arrows. All arrows are pointed in a downward position to denote a loss from last year’s Averages except for two areas which showed no change over ’08.

All % boxes are in RED which indicates a loss in Average or Median Sold for year 2009 vs. year 2008. The Average loss in Median Sold Price for S.F.H.’s comparing the results from ’09 to ’08 show an average median loss of -7%. For condos it was -6%.

I believe that Medians are misleading and I like to rely upon Averages wherever I can. In the case for all of Oahu’s numbers I can only use Medians but for the regions on the map I can obtain averages which show a much clearer picture of what has happened.

Following in this report I have provided you with graphs depicting the progression of each important data category one needs to take into consideration in analyzing how the market area has been affected.

Since these graphs begin with January ’07 and end with December ’09 you are provided with a long term view of what is happening.

It is important to remember that nothing changes swiftly in real estate sales. It is only over the long term that we can see the accumulated change.

2008 was a disaster for real estate on Oahu. It was similar on our Outer Islands as well. As activity started to pick up in ’09 sales began to increase while inventory continue to rapidly decline. Towards the end of ’09 with the introduction of the First Time Home Buyer’s Credit we incurred a rare boost in sales during the Fall when normally this time of year is typically in a sales decline.

The A.C.S. % is derived by dividing the total inventory For Sale by the total number of homes in Escrow with Just Accepted Offers (A.C.S.) Just Accepted Offers is a status the Honolulu Board of Realtors assigns to Accepted Offers that have just begun the Escrow Process. The Board also mandates to its members that agents must change the status of a For Sale Listing to A.C.S. within 4 days of an Accepted Offer or the agent is fined. 

When we look at A.C.S. data it is ‘freshest’ data we can obtain from the M.L.S. Sold data or Sales data is nice to see but this data is from the past and old. Generally, an Escrow time frame from opening to closing takes 60+ days. When looking at A.C.S. data we can see where we going, unlike Sold or Sales data which shows us where we have been.

Over the past 12 months the Average of each month’s Median Sold Price of 2009 was relatively unchanged, registering a less then -1% drop. I consider this good news.

Unlike the Single Family Homes (S.F.H.) Average Median Sold Price of less than -1%, the Condo Average Median Sold Price dropped by -6%.


As I previously mentioned, it was a disastrous year for Real Estate Sales in year 2008. Depicted in the above Sales Graph we see a general decline in unit sales that started in April 2008 and did not end until February 2009.

During 2009 sales just kept on increasing all year until October 2009 when seasonally, sales typically begin to decline each year. However, due to the First Time Home Buyers Tax Credit we experienced a gratifying bump in sales units which ended the year for 2009 vs. year 2008 with only a -3% decline in unit sales for Single Family Homes.

If we had not had the benefits of the First Time Home Buyers Tax Credit the rate of unit sales decline would have been much more significant.

Unlike the Single Family Homes the decline in sales for Condos was much more pronounced at a loss of -10%.

I have often said in my reports that it is the Condo market that will lead the way in the current downturn. This will continue throughout this year in 2010 as well.

It is important to realize how important it is that the inventory for sale is rapidly dropping. This reduction in inventory levels has not occurred for many years.

It is the interest rate, employment rate and most importantly of all, Consumer Confidence that will effect the inventory levels. Right now I would think that we can expect more losses in inventory levels.

Why is the inventory dropping? This is a great question and this is why I want everyone to understand how important the inventory level is in its ability to provide us with a window to determine the health of the market.

The last downturn in inventory level was much more gradual than that we are experiencing now. Consumer Confidence continues to decline. Unemployment is above 10% and stubbornly refuses to move. Although the U.S. Government as spent Trillions of $’s on hopes of repairing the Economy the prospect of increased employment this year is not good.

For further explanation of these important statistics that effect our lives and our current Real Estate Market conditions I urge you to view the “Buy The Numbers” reporting at Rasmussen Reports which you can find at

I believe the majority of Home Owners on Oahu are not ‘under water’ in their mortgages which means they still have more equity on their homes than what they owe on their mortgages. (For more on Short Sale and Foreclosure Statistics read my reports at my website:

These home owners probably believe that in the near term (5-7 years) the Economy will be repaired and their former equity positions on their homes will come back to pre 2008 numbers.

To summarize, most owners are waiting for the market to return as they do not need to sell and are willing to wait for the market to improve. The only ‘problem’ with this thinking is that I believe most owners do not realize how much further the market is going to drop and the subsequent loss of equity that will ensue on their investments. The downturn in the market is going to go on for some time to come. I do not see the market nearing anything we might call ‘stabilization’ until 2011 at the earliest. As for returning to pre-2008 equity numbers, I think we might be looking at a decade.

As a testament to how strong sales were for us in year 2009, the D.O.M. (Days On Market) actually dropped from year 2008. It did not drop by much, one day only, but…it dropped in a declining market which is good news for us all.

However, a drop in Condos did not incur like Single Family Homes.

Unlike the Single Family Homes whose D.O.M. (Days On Market) dropped last year 2009, the Condo market D.O.M. increased +8% which indicates it is taking a lot longer to sell a Condo in this market.

The dramatic drop in inventory levels for Oahu Real Estate is contributing to the strengthening of the market conditions. The only danger to the inventory For Sale going into a Free Fall is that sales will dry up when buyers cannot find homes to purchase.

A drop in New Listings inventory For Sale of Single Family Homes of -20% and a drop of -20% for Condos may not seem like much but this number is for all of Oahu. On closer inspection here are some more pronounced drops:

A drop in New Listings inventory For Sale of -24% may not seem like much but this number is for all of Oahu. On closer inspection here are some more pronounced drops:
(The %’s below are for December 2009 vs. December 2008)

 Single Family Homes  Condos
Hawaii Kai  -53% -75%
Kailua -42% -56%
Mililani Mauka -74% -65%
Mililani Area (Town) -49% -72%
Ewa - Kapolei -57% -53%
Kaneohe -42% -53%
Makakilo -40% -37%

These are but a few of the areas I track statistics for Oahu and now we realize that the drop in For Sale inventory is more serious than what it appears to be on the Oahu Inventory Graphs.

The Average Median For Sale Price of New Listings of SFH’s for year 2009 is a more serious problem than what it appears to be. A -5% drop does not appear to be a significant drop until you stop to consider that the Average Median Sold Price is $575,375.

This is a difference between the two numbers of $73,492.00 or 11%.
At this rate, there may not be enough to inventory to satisfy the Average Buyer’s price range if new lower priced inventory is not available.

The Average Median For Sale Price of New Listings of Condos for year 2009 has dropped by -9%.

This is a good thing because now buyers have more choices in the market to purchase a Condo in this popular price range as there is inventory available.

My best guess is that the reason for less than a -1% drop in Average Median For Sale Price of SFH’s is that there was plenty of higher priced inventory that had come onto the market during year 2009. Higher priced inventory will definitely affect this number. 


Due to the amount of and the price of New Listings that have come onto the market at lower price ranges, the Average Median For Sale Price has dropped -10%.

This is good for the market for both buyers and sellers as this new lower Median For Sale Price of Condos will generate sales.

What we see from these two Sales Pie Charts for SFH’s, for year 2008 and 2009 is that buyers were overall choosing lower price ranges to purchase.

In the above For Sale Pie chart of SFH’s we can compare it to the Sales for Year 2009 Pie chart above and see how out of step what is For Sale by price range is to what sold last year in year 2009.

… and we continue to be out of step with what buyers are choosing to purchase as compared to what is For Sale as of January 12th 2010.

The year 2009 Sales Pie Chart indicates that buyers are still seeking lower price ranges to purchase in greater percentage over the sales in price ranges of year 2008. Sales in the higher price ranges continue to fall off. I believe that this trend will continue in this year 2010 but we will see a bump in higher priced units being sold in the Spring of this year 2010 as at this time of year this is typically happens as higher priced listings come onto the market.


In the above For Sale Pie chart we can compare it to the Sales for Year 2009 Pie chart above and see how out of step what is For Sale by price range is to what sold last year in year 2009.

Granted, there are just some Neighborhoods and Condos that will never be acceptable to prospective buyers looking for a certain price range.

The current Real Estate market on Oahu may be ‘Out of Step’ with buyer demand for right now. As long as many home owners continue to not put their homes on the market and decide to not sell, inventory will keep dropping and sales will suffer. However, eventually the inventory is going to bottom out and more home owners will sell when this occurs as prices will stabilize and begin their upwards climb once again.

When? I certainly do not have a “Crystal Ball” but my best guess is that sometime in year 2011 we are going to see a stabilization of the market here in Hawaii as well as the Mainland.

However, variables do exist. Our Nations Trillions of Dollars debt and climbing, tax increases of every kind, Unemployment, U.S. Government no longer buying Mortgage back Securities (effective March 31st. 2010) and the eventuality of rising interest rates…will have a bearing on the market recovery.

I hope that you have enjoyed this report and as always if you are looking for good Realtor who knows the market for your buying or selling needs, please do not hesitate to call or email me.

As a Realtor, Broker, Broker in Charge and member of the Ethics Complaints Review Committee for the Honolulu Board of Realtors, I am responsible for teaching agents within my Company to service the Public at a high standard of Ethics and proficiency in order to afford our clients a smooth and gratifying transaction. This makes life long clients and happy clients.

My statistics are used in training agents within our Company so we can empower our clients.

Mike Gallagher, Broker in Charge, Abe Lee Realty
Ethics Complaints Review Board Member, Honolulu Board of Realtors 808-384-9015

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