A few months ago, oneÂ of my clients elected to hire another Hawaii Realtor because we disagreed about the value of the property I was being hired to sell.Â That was several months ago, and now, perhaps ironically, the listing price has been lowered to where it should have been several months ago.Â Only the market will tell if that recent price reduction is enough.
It’s a relatively common event for a seller to switch Realtors, only to finally take the advice the first Realtor had been giving all along (usually a price reduction).Â In this market, though, the danger lies in not taking the advice in the first place.
Here are the facts: as the months go by, fewer and fewer properties sell in Hawaii.Â On Kauai, for example, there are currently 416 houses on the market (a figure that goes up almost every day).Â In November, only 15 houses sold (down from 22 in October).Â The simple math indicates that we have over two years of inventory.
Condominiums are worse.Â There are 549 listings on the market, and this month, only 7 sold.Â That’s over 6.5 years of inventory.
I wrote in my last post that there are lot of sellers who simply can’t afford to sell their homes.Â By that, I mean that they owe more than their homes are currently worth.Â There are, still, a growing number of short sales (where the bank allows the seller/borrower to sell for an amount that doesn’t pay the bank back in full).Â But this is extraordinarily rare, and my understanding is that only 8% of ‘Short-Sale’ transactions actually close escrow.
So, for those of us who CAN afford to sell (I just sold my property in November)… the simple laws of Supply and Demand dictateÂ that we must lower our prices.
If you’re considering selling property in Hawaii, here are a few points about how to price it:
#1 Listen to your Realtor.Â You’re hiring an expert for a reason.
#2 Don’t give much meaning to the listing prices of ‘comparable’ properties.Â If they’re still on the market, they’re priced too high.
#3 Pay Attention to recent sales prices of comparable homes, and price your home less than or equal to those sales.
For those of you who are tracking the stats, here are the real estate sales Statistics for November 2008 on Kauai (note: the Median Price and Sales Volume in the Hanalei District are inflated by a couple of sales in Hanalei: one for over $10m and another for over $2m).
Matt Beall, Principal Broker