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Oahu Real Estate Sales Down – November 2008

We often invite guests to write articles about their respective market’s performance over the past month (it’s been a bit hit). This month, David Buck, RA is writes about November’s market on Oahu real estate

Remember when the Dow Jones plunged, the “bailout” talks started & the sky was falling? A lot of that was mid September. Any listings going into contract then would equate to November closings! I unfortunately had 3 transactions fall apart during all this. Guess what? We’re all still alive & breathing, and I’ve since put several transactions back under contract. As predicted, November 2008 would be an interesting month for Oahu sales:

Through the month of November, everything seemed to be down across the board. Year to date, our total volume of sales on Oahu is down from $4.65 Billion to $3.447 Billion. This is a 25.9% decrease from 2007. The total number of sales on the island is also down over 30% (the reason why our volume is down less than sales is there were some monumental sales in Diamond Head and Kailua). Our median sales price for a single family home is also down at $594,500 which is the 3rd time in the past 3 years we’ve dipped under the $600,000 mark. Condos were also down with a median sales price of $316,000 which actually wasn’t as bad as November. There are two areas of interest to note that stuck out at me in November:

1. The number of Condo sales on Oahu was 201, down from 316 the previous month and the lowest number of sales since 1999!

2. The average number of days on market for condos was 88, up from 53 the previous month and the longest time on market since 2000!

The condo market is slowing down dramatically. There were months over the past year when there were more sales in a single project than there have been on the entire island in November! What’s also interesting is that over 500 new condo listing that came on market. Existing inventory is 2,655 units, actually down from 2,663 the previous month.

Well if 500+ came on market & only just over 200 sold, how is inventory down? A number of reasons: sellers pulling their place off the market to rent (I have several clients considering this) or the listing could have expired. If only 200 units sold and 2655 are on market, as a seller you have to ask yourself: What will it take to get my place in the less than 10% of listings that are actually selling?

The answer is PRICE! Places that are priced right will sell!

What does this mean for buyers? Since both homes and condos are sitting on the market longer, sellers are motivated, you can get a better buy than you could over the last few years. And, interest rates are back to the low 5% range!

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Jeff

December 4, 2008

It is always price. No matter what market you are in.

Justin

December 9, 2008

David, if you know of any great deals in the $300K range, let me know, I’m looking to invest.

Todd

December 16, 2008

Aloha Justin and David,
Will lower prices be the trend for condos over the next 6-9 months and should I wait?

David

December 29, 2008

Buyers seem to forget what resident sellers have known for a long time. Those living on Kauai or any other island are living in paradise. Hawaii is not the mainland. There is only so much island. I expect that when people realize many sellers are quite happy living the good life and that hawaii will always be PREMIUM property that the hawaii market will recover far in advance of the mainland. Give it a year with Obama as president and watch the mood of the nation improve. By the time you all realize that Hawaii is at bottom you will have missed the bottom of the market.

Todd

January 19, 2009

Dear David,
I’ve had a month now to look at prices and latest news articles and it still seems that things are still in my favor on waiting a few extra months and this is what I have discovered.Most MLS listings that you see today are listings that were started as much as a year ago. The more recent listings like in the last 30 days are now offering more bang for your BUCK(Sorry David,I couldn’t resist,lol.). I truely believe that if I could hold off 2-4 months before making all of my purchases, that I will fair pretty good in the long run.I did have one condo that I was eyeing that was a short sale,sold for $14k more than the asking price which kind of surprised me.
Bottom line is that, what you are saying seems to be right on the money. I believe that there is only going to be a short window of opportunity. Sales might be down but that doesn’t mean the prices will go down all that much.There are always bargains in any market but I believe that there will be a few more bargains than before. Most of the bargains that I’m seeing now are on the higher end condos. Can you explain what I am seeing or am I reading the big picture wrong?

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