Oahu Map December 2010

 
For the sake of most of frequent, current readers who are already familiar with these reports, I am not going to go back and recap what all the things on the above maps mean but I encourage New Readers to read the “Oahu December Real Estate Report” on my website at www.hawaiirealestatestatistics.com and there you will find a full explanation of the above map.

You will want to take some time to note the differences between the two December maps above showing what has changed, same Month, year over year.

Overall the Average Sold Price for Single Family Homes on Oahu sold at a higher price than they did in year 2010 but by only less than a one percent increase year over year.

Unit sales were down eight percent in Year 2011 versus Year 2010. The only months of year 2011 that showed higher unit sales than at the same time in year 2010 were January through March of year 2011.

It took considerably longer to sell a home on Oahu this past year than it did in year 2011 with a plus twenty three percent increase in the Days On Market. This is the Honolulu Board of Realtors calculation method of Days On Market which I do not agree with. I think the Board uses a method that only measures the amount of time correctly priced homes go into Escrow and not my preferred method of measuring the amount to time a home has been on the Market.

Please note the vast differences in the two Days On Market graphs above, one measured by the Honolulu Board of Realtors only tracking those homes that go into Escrow which means they are tracking correctly priced homes versus the latter graph which measures how long a home has been on the market.

For years we have experienced a steady, dramatic decline in New Listings coming onto the market as owners refuse to give up more equity or simply do not have enough equity in order to sell for a profit. Now we can see that this past year has brought a much needed change to the market as more and more home owners are coming onto the market to sell. Although we still recorded minus seven percent fewer listings than in year 2010 the decline is leveling off and I believe for the first time in the past five years that we are now either:

1. Entering into the Bottom of the Market
2. We are in the Bottom of the Market

This is a good thing, as finally I believe we will experience good sales and growth again in year 2012 after the crash of the market back in year 2008. I caution the reader that this is a very fragile Real Estate Market, weak National Economy and there are still grave concerns on the Horizon concerning additional Foreclosures and Short Sales that will come onto the market in year 2012 which could dramatically affect the health of the Real Estate Market.

For more words of caution on this fragile Real Estate Market please see the reports issued by www.corelogic.com and read their “Shadow Inventory” and “Negative Equity” reports. It is well worth your time to do so.

In order to keep sales in the pipeline to accommodate a New Buyer who now wishes to purchase in lower price ranges, a majority of New Listings have come onto the market at lower prices. This is significant information as you also have to consider that a whole lot of very high price range homes have come onto the market this past year which dramatically affects the Averages or Medians. For the Average For Sale Price of New Listings to have come down by eleven percent, there were a whole lot of New Listings in lower price ranges that have come onto the market. As you see below the high end listings have kept the Average For Sale price high and there is very little change in the Average For Sale Price from year 2010 to 2011.

Even with an increase of seven percent in New Listings we see that the inventory level is still declining. This is because unit sales are good and the momentum of New Listings coming onto the market has not built up to speed yet. I believe we will see a strong increase in New Listings this year.

Remember there is a big difference between Inventory and Months of Supply. Months of Supply is calculated by using current rate of sell. Sales have been strong.

 
Oahu Months of Supply December 2011

 
Oahu Months of Supply December 2010

Between the two Months of Supply Maps for December 2011 and December 2010 at first glance there appears to be very little difference in the current supply of home’s Months of Supply. The details are in the individual Areas on the maps.

Although hardly anyone tracks the rate of Withdrawn and Expired Listings, I do just to see how many there are and I like to see the totals in comparison to the overall amount of Sales and Listings. The point I would like to make is that we had a five percent decline in Withdrawn and Expired Listings between year 2010 and 2011 but we had a decline of eight percent in Unit Sales. The number of Withdrawn and Expired Listings remained high while the rate of Unit Sales was even higher. This is due to less overall inventory available For Sale.

When trying to understand the impact of inventory levels upon sales and the condition of the market we need to break down the inventory to see where it is at by Price Ranges. Only after doing this can you begin to understand what is truly happening in the market.

The division of inventory by Price Ranges has changed little over the last two years but now we can see where the increase in high priced homes on the market and their sales. High priced inventory dramatically affects all Averages and Medians. Do not forget this.

This brings us to the end of the Single Family Home Market analysis and I have changed the format of this report intentionally so that in the beginning of the report we have the Single Family Homes and now we have the Condo Report.

Condos

The Average Sold Price for Condos has definitely increased this year as new; higher priced inventory has come onto the market and sold. Much of this increase is due to Luxury Condo Sales in Kakaako, Waikiki and Ko’Olina. Even the high end, older Condos that are available in Kailua and Hawaii Kai have experienced an increase in sales.

Although there is little difference in Unit Sales over the past year in comparison to year 2010, remember the preceding graph “Average Sold Price” shows an increase due to higher priced inventory coming onto the market and selling.

Please remember that the Honolulu Board of Realtors Days On Market only tracks correctly priced homes in my opinion and above we see a relatively low number of Days On Market in comparison to my preferred method of tracking Days On Market. (See Below)

Despite the decrease in New Listings of minus ten percent for the year from year 2010 I anticipate that we will see a new round of New Listings come onto the market in the spring of 2012 that will accelerate through the Summer Months.

The Average For Sale Price of New Listings has hardly changed in year 2011 from year 2010 but there are more higher priced listings coming onto the market these days which are experiencing strong sales.  I believe that this trend will continue.

The inventory is no longer increasing as we acquire fewer New Listings and experience strong sales. The amount of inventory for Condos on Oahu is now in very good shape. Both Single Family Homes and Condos on Oahu are under six Months of Supply and Oahu has truly entered the realm of a “Seller’s Market.”

We can see where the peaks are for Condos Months of Supply and dips occurring after many unit sales. Overall there is eight percent less Months of Supply than we had in year 2010.

Condos as well are experiencing an influx of higher priced homes coming onto the market and I believe that this will continue throughout year 2012 as we have seen in year 2011 and increase of interest and sales of Luxury and Higher Priced Ranges Condos. There are many Cash Buyers out there now and they were purchasing homes all year long in 2011 and I believe they will continue to do so throughout year 2011 and in greater numbers.

Think about this: In 2009 there were approximately 500 listings For Sale in the Ewa Plain Area and almost fifty percent were in Foreclosure and Short Sales. Today there are approximately 100 total listings For Sale and only 34 of them are Foreclosures or Short Sales. That is a whole lot of homes that have sold!

The higher end price ranges mostly remained unchanged from year 2010 with the exception of the Top Price Range of $800,000 which experienced an increase of two percent. In 2011 most of the Condo Sales took place in the lower price ranges in reduced numbers from what we experienced in 2010.

In closing, I have high hopes for this year as we begin a new phase to Oahu’s Real Estate Market with increased New Listings, higher unit sales and an increase to the Average For Sale and Sold Prices. I believe 2012 will be a good year but I also caution everyone to stay connected to what is going on the National level as well as the International level in terms of the Economies.

The “Shadow Inventory” consisting of more Foreclosures and Short Sales as a result of more and more home owners loosing not only their jobs but their ever decreasing equities, will arrive onto the market this year and by latest count there are approximately 1.6 Million of them. I recommend you watch closely as this may just derail any type of recovery for both our Economies or our Real Estate Markets.

I hope that you have enjoyed this report and of course if you have any questions about buying or selling Real Estate in Hawaii please do not hesitate to call me.

I know of no other Realtor or Agent on this Island of Oahu who knows the Market as well as I do and more importantly, where the Market is headed.

If you really want to have the ‘straight info’ on what is really happening in Hawaii Real Estate you will be empowered by visiting my website or speaking with me, as I tell it like it is.

I have been in this business for twelve years and sold and purchased lots of homes for many happy clients. I can either help you buy your next home safely and for the right price or I can help you sell your home for the right price correctly, in the shortest period of time and obtain the best price and terms for your home.

If you have the time please visit my website for a wealth of information on the Oahu Real Estate Market and read my monthly articles on Oceanic Time Warner Cable's www.aroundhawaii.com.

I wish you all much Aloha and I thank you for your readership.

Mike Gallagher, Mike Gallagher Real Estate, Inc.
808-384-9015, mikeg@hawaii.rr.com