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How Big a Part of Our Hawaii Market Are Short Sales and Foreclosures?

We sometimes forget the progress this market has made over the past two years. We took a look at a few market segments to see how many short sales and foreclosures are out there. Seems like over the past few years these types of listings were dominating the market, and at some point in various neighborhoods and condo complexes, that’s all there was – short sales and foreclosures.

© Copyright Dan Fumento 2012

A lot of that distressed inventory has apparently been rung out of the market. For this study, we looked at homes and condos in the tax map area of 3-7, essentially Kona from the Palisades to just South of Keauhou. Then, we looked at homes and condos in tax map area 3-6, the resorts, Waikoloa Village, and Kamuela. Finally, we looked just at condos in areas 3-6-8 and 3-6-9, Waikoloa, Mauna Lani, and Waikoloa Village.

As you can see from the graph above, the results are remarkably similar. While we knew the distressed property was diminishing, it was surprising to see what a small part of the market it is at present. There may be shadow inventory out there waiting, but at this point in time, distressed inventory is not dominating the market, although it it still affecting prices. In our opinion, just another sign that this market is improving.

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Beth Thoma Robinson R(B)

April 16, 2012

Dan and Marion–thanks for putting the numbers on what is apparent to those of us who are practitioners. I know there are people reading news reports from the Mainland who believe this is a temporary phenomenon and that the banks are sitting on a lot of inventory. Even if I thought that were true in the markets you report on above, their whole reason for sitting on it would be to create an orderly market. We are seeing prices creeping up thanks to the revised supply-demand balance in many neighborhoods. Why wouldn’t the banks want to benefit from those healthier prices?

Beth Thoma Robinson R(B)

April 16, 2012

Dan and Marion–thanks for putting the numbers on what is apparent to those of us who are practitioners. I know there are people reading news reports from the Mainland who believe this is a temporary phenomenon and that the banks are sitting on a lot of inventory. Even if I thought that were true in the markets you report on above, their whole reason for sitting on it would be to create an orderly market. We are seeing prices creeping up thanks to the revised supply-demand balance in many neighborhoods. Why wouldn’t the banks want to benefit from those healthier prices?

Dan Fumento R(S)

April 16, 2012

Always interesting to see the actual numbers that confirm what seems to be happening. We believe the resales are starting to push up the short sale and REO prices as lenders do their appraisals. Used to be so many SS and REOs were dragging the market down.

Dan Fumento R(S)

April 16, 2012

Always interesting to see the actual numbers that confirm what seems to be happening. We believe the resales are starting to push up the short sale and REO prices as lenders do their appraisals. Used to be so many SS and REOs were dragging the market down.

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