January 6, 2011

Kahului real estate market outlook

The Kahului real estate market, a western section of the larger Maui housing market, saw a series of encouraging signs in recent months. Although the number of foreclosures in the region has become a concern for many analysts, there were a larger number of condominium sales and stronger resort market figures in recent months. According to statistics reported in the Lahiana News, the number of condominiums sold on Maui from January 2010 to September 2010 was a forty-nine percent improvement over the same period last year. The average sales price, however, saw a decrease of about nine percent. This helps to explain the number of sales in recent months in conjunction with historically low interest rates. Just as the condo market has been rallying, the resort real estate market has recovered strongly over the past year. Total sales have increased by about fifty percent over the last three quarters, while the low average price of resort properties has helped to drive demand. On Maui in particular, there will be a projected 629 resort sales in 2010, a record compared to the previous high of 588, reached in 2005. Conversely, while the average price of resort property on Maui was about $1,400,000, a substantial decrease from the peak figure, which was closer to two million dollars. Last year, the median price was closer to one and a half million dollars.

The number of foreclosures in Maui, including distressed Kahului homes for sale, decreased in the month of November 2010. Although many local and state government officials have started to initiate formal investigations of foreclosure practices as well as coordinate government relief efforts, it appears that the initial flood of mortgage defaults may have subsided. According to statistics provided by RealtyTrac, there were a total of 877 foreclosures in the state of Hawaii during November. For Maui in particular, the number of foreclosures fell by approximately ten percent compared to November 2009.  By comparison, Kauai decreased by nineteen percent, while the Big Island saw seven percent fewer and Oahu actually saw fifteen percent more foreclosures.

January 5, 2011

Ko Olina real estate market update & outlook

The Ko Olina real estate market, found on the North Shore of the island of Oahu, saw some signs of weakness even as the overall forecast for the state’s housing market began to improve. According to statistics compiled by the Honolulu Board of Realtors, there were fewer single-family homes purchased in the month of November 2010 compared to year-ago levels. There were a total of 245 single family properties sold in the most recent tracking period, while 258 were sold in November 2009, representing a decrease of approximately five percent. The elevated quantity of home sales in November of last year can be partially attributed to the federal housing tax credit, which expired at the same time last year. According to a report from Pacific Business News, the average sales price of an Oahu single-family home was $585,000, representing a decline of approximately five thousand dollars from the same time last year. Condominium sales saw a similar scenario, with the median price increasing and sales volume decreasing. In November, there were a total of 303 condos sold, while there were 402 sold in November 2009. The median price for condominiums rose from $310,500 in 2009 to $315,000 in 2010.

However, the outlook for the next few months is cautiously optimistic, according to a forecast by the Hawaii Association of Realtors. The outlook, which was published in Pacific Business News, indicated that higher interest rates and fewer houses on the market may point towards a seller’s market in the upcoming year. Experts expect the interest rate to rise above five percent in 2011, while the local housing inventory remains low. Similarly, unemployment on the island of Oahu, including Ko Olina, is quite low compared to national levels at 5.4 percent. As interest rates rise, it is possible that potential buyers who have been on the fence will make the decision to purchase a property in the upcoming months. Ko Olina’s economic success is heavily dependent on the tourist industry, which suggests that the region’s real estate might improve as the state’s most important economic driver also improves.

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December 5, 2010

Hilo real estate housing market Big Island Hawaii

The Hilo housing market continues to be adversely affected by high rates of foreclosures and destabilized by the uncertainty of the ongoing foreclosure fraud investigations. The investigation in particular has called the status of many foreclosures into question. An October 13, 2010 article from KITV 4 News found that “Hawaii is joining the other 49 states in a massive investigation into whether major mortgage lenders committed foreclosure fraud. Hawaii Attorney General Mark Bennett said he suspects there have been abuses here, partly because, he said, state laws may make it too easy to for someone to lose their home. In California some homeowners challenging foreclosures have physically taken back their homes. Many believe they now have an advantage over the mortgage company in court — because of revelations that foreclosure fraud by lenders may have affected thousands of homeowners across the country. Lenders including Chase and Bank of America confirmed they had people signing off on foreclosure paperwork for the lenders without any real review of the documents. Hawaii Attorney General Mark Bennett said that kind of behavior could cause a foreclosure to be reversed. “There have been foreclosure abuses across America,” Bennett said. “Likely Hawaii, as well…”

For the moment, however, it appears that the foreclosure investigation will have a delayed effect on Hilo homes for sale, as the third quarter foreclosure rate for the state increased by nearly fifty percent. According to an October 14, 2010 report from Pacific Business News, “The number of properties in Hawaii with foreclosure actions jumped 48 percent in the third quarter when compared to the same quarter in 2009, ranking the state 10th in the nation, according to the latest statistics from RealtyTrac. There were 4,060 properties with foreclosure filings — including notices of default, trustee sales and bank-owned properties — during the July-September period, or a rate of one per every 126 housing units. September alone saw a 67 percent increase in filings on Hawaii properties over the same month in 2009, ranking the state ninth in the nation. There were a total of 1,617 properties with foreclosure filings last month, or one per every 317 housing units.”

November 29, 2010

Kona real estate market on Hawaii

The Kona real estate market, one of the two major portions of the Hawaii Island housing market, has been suffering from a recent controversy regarding affordable housing. A planned affordable housing community with thousands of units has hit a roadblock, according to a November 5, 2010 article from the Honolulu Star Advertiser. The piece by Andrew Gomes noted that “A planned community with 2,330 homes initiated by the state to produce work-force housing on the Big Island is generating concerns and opposition that threaten to derail the project.The estimated $734 million master-planned community called Kamakana Villages at Keahuolu has been in the works for several years, and faces a key hearing today in Kona where the state Land Use Commission is expected to either stop or advance the project. Developer Forest City Hawaii LLC petitioned the LUC in September to reclassify the 272-acre site near Kailua-Kona from agricultural to urban use. But the former owner of the land has raised objections over the use of the site and whether impacts from increased traffic will sufficiently be mitigated. The Queen Liliuokalani Trust, which sold the project site and adjacent land to the state in 1992 under threat of condemnation, has raised its objections with Hawaii County officials, in arguments before the LUC and in a lawsuit filed recently to halt LUC proceedings.”

Statistics released by RealtyTrac seem to indicate that the negative influence of foreclosures on Kona homes for sale will not stop anytime soon. Across the state, and on Hawaii Island in particular, there were a considerable number of foreclosures in the third quarter of the year. According to an October 14, 2010 report from Pacific Business News, “The number of REOs more than doubled on the Big Island, which had 397 bank repossessions last quarter, compared to 160 a year ago. Kailua-Kona continues to lead in that county with the greatest number of foreclosure filings, and the greatest number of bank repossessions with 153, almost triple the amount it had in the third quarter of 2009.” The effect of the recent Bank of America automated foreclosure controversy is unclear, although in the end it will likely not stem the tide of distressed properties.

November 25, 2010

Hanalei real estate market update on Kauai

The Hanalei real estate market, a portion of the Kauai housing market which is heavily influenced by the tourist industry, is seeing some encouraging news in the most recent tracking periods. According to a November 5, 2010 report from the Honolulu Star Advertiser, “The state’s tourism industry is recovering faster than expected, and visitor arrivals could approach record levels in 2012, according to one of Hawaii’s leading economists.”Hawaii tourism has proven to be more resilient than most of us thought a year ago, and hopefully that will be the leading edge of economic growth as it spreads to other sectors of the local economy,” First Hawaiian Bank economic adviser Leroy Laney said yesterday at the bank’s 41st annual business outlook forum at Dole Cannery Ballroom. Laney said visitor arrivals — as well as spending — are tracking ahead of this year’s estimates, and he expects arrivals to easily exceed his 2010 estimate of a 5.5 percent increase. Through September, visitor arrivals were up 7.2 percent to 5,298,830, and expenditures were ahead 13.7 percent to nearly $8.4 billion, according to data released yesterday by the Hawaii Tourism Authority. Laney said a 4.5 percent increase in arrivals next year would be “realistic” and bring the state above the 7 million threshold so that in 2012 it would be in position to challenge the 7.5 million arrivals record achieved in 2006 and 2007.”

Less Hanalei home owners are facing serious financial distress, according to new statistics reported by the Honolulu Star Advertiser. Hopefully, this means that fewer Hanalei homes for sale will be Kauai foreclosures or short sales on Kauai. The November 2, 2010 article by Alan Yonan noted that “The number of Hawaii residents filing for bankruptcy dropped below 300 in October for the first time in eight months, although local bankruptcy attorneys say business is still brisk by historical standards. The 297 filings last month were the fewest since 291 cases were filed in February, according to federal Bankruptcy Court statistics. There was an 8.4 percent rise in filings from October 2009, the smallest increase in nearly a year. Bankruptcy filings for the first 10 months of the year are still running well ahead of last year’s pace. Despite signs that the economy is finally showing signs of improvement, many consumers are continuing to dig themselves out of debt racked up during the recent recession, which saw Hawaii’s unemployment rate hit a three-decade high.”

November 18, 2010

Makena real estate market on Maui

The Wailea Makena real estate market, an upscale portion of the larger Maui housing market, has retained a high median sale price despite the overall stagnant trend of the rest of the Valley Island. An October 12, 2010 article from the Honolulu Star Advertiser noted that “Terry Tolman, chief executive of the Realtors Association of Maui, noted that prices aren’t likely to rise until the considerable inventory of homes facing foreclosure or repossessed by lenders is absorbed. According to an analysis of Maui’s economy last month by Hawaii Pacific University economics professor Leroy Laney for First Hawaiian Bank, median home prices are declining but at a lower rate this year than in 2009. At the high end there were four sales for a median $1.5 million in Wailea/Makena, compared with eight sales a year earlier for the same median price. The largest submarket for single-family homes on Maui is Central Maui, where there were 21 sales last month for a median $437,500. That compared with 13 sales for a median $427,000 a year earlier. On the lower end there were 11 sales in Kihei for $381,000 last month, compared with 11 sales a year earlier for a median $450,000. On the high end there were five sales in Wailea/Makena for a median $3.9 million. There were no single-family home sales in Wailea/Makena in September 2009.”

Makena homes for sale and other Maui properties continue to face the difficulties associated with high foreclosure rates, according to a November 4, 2010 article from the Lahaina News. The report by Mark Vieth stated that “Fear arrives in the mail at hundreds of Maui households each month. In September in West Maui, for example, 71 homeowners received letters that their houses went into foreclosure. RealtyTrac reported 338 Maui foreclosures in September and 1,617 new filings in the state that month. Hawaii has a non-judicial foreclosure law (HRS 667) that gives mortgage companies the authority to foreclose on a property without court approval. If an owner falls behind two months on house payments, the mortgage company can simply submit an affidavit to the state Bureau of Conveyances to be stamped, received and filed.”

November 11, 2010

Lahaina housing market update

The Lahaina housing market, a substantial portion of the larger Maui real estate market, has been holding relatively steady over the last few tracking periods despite an increase in the number of foreclosures. According to an October 16, 2010 report from Pacific Business News, “What that means is the median-price home on Maui last month was $440,000, the same as it was in September of last year, but nearly $100,000 less than two years ago, and more than $150,000 less than September 2007, according to the numbers recently released by the Realtors Association of Maui. In 2006, that median-priced house went for $769,000. Some neighborhoods actually saw prices rise, but places like Kihei, which has seen a lot of foreclosure and short-sale activity, are still seeing lower median prices. For example, the median-priced home in Kihei that sold for $450,000 in September 2009 sold for $381,000 last month, a 15 percent discount. Real estate experts say that once the level of inventory is reduced that prices will start to rise again. We’re already seeing that on Oahu, where prices have been going up as the inventory goes down. But no one can say when that will happen on the Neighbor Islands, especially since nationally, some in the industry expect more foreclosures to come.”

Lahaina homes for sale continue to be adversely affected by the high percentage of foreclosures on Maui and in the state. According to an October 14, 2010 report from the Honolulu Star Advertiser, “In Hawaii, much of the foreclosure trouble has occurred on the neighbor islands, where investors rushed to buy vacation property during the real estate frenzy. Most of the foreclosure filings counted by RealtyTrac still involve property owners struggling to keep their homes. Of the 1,617 Hawaii filings last month, 80 were default notices and 1,046 were sale notices. Another 491 were repossessions by lenders. By county, Maui had the worst foreclosure rate in September, at one filing per 191 households, or 347 filings in all. The Hawaii island had the next worst rate at one filing per 194 households, based on 411 total filings. Kauai’s rate was one filing per 246 households, based on 121 filings. Honolulu real estate had the most filings with 738, but it had the lowest rate, at one filing for every 457 households.”

November 10, 2010

Kaneohe housing and condo real estate market update

Relative to the same time last year, the Kaneohe real estate market and the larger Oahu housing market saw increases in both median sales price and the volume of sales. According to an October 6, 2010 report from Pacific Business News, “Sales of single-family homes on Oahu were up last month, and prices for both houses and condominiums also rose in September, according to the Honolulu Board of Realtors. There were 274 sales of single-family homes on Oahu in September, which was an 8 percent boost when compared to the 253 sales last year, the board said. The median price of a single-family home in September was $622,450, up 3 percent from $605,000 last year. The median price of a condo on Oahu also rose to $335,000, an 8 percent increase from $309,500 last year. Condo sales, however, fell 16 percent to 298 sales, down from 354 sales during the same month last year. Year-to-date data shows that sales are up by more than 20 percent in both categories. The median price of a single-family home for the first nine months prices rose 4 percent to $599,000, while the median price for a condo was unchanged at $305,000.”

Three other indicators of market health also had good news for Kaneohe homes for sale, as inventory numbers, days on market, and percentage of original list price received at sale all ticket upwards. According to an October 7, 2010 report from Honolulu Magazine, “The days-on-market stats, which indicate the median number of days from when a property is first listed to when it’s pending sale, showed the most change: Last month, single-family homes remained on the market for 32 days, a nearly 40-percent decrease from Sept. 2009; condos lingered on the market for 39 days, representing an 11.5-percent decrease from Sept. 2009. The island’s inventory-of-homes data shows steady declines in the month of September…Another indicator of a steady market is the percent of original list price received at sale, which is the average percentage found by dividing a sold property’s sales price by its original price. Single-family homes in Sept. 2010 received about 95.2 percent of the original list price, a 2.9 percent increase from Sept. 2009. Last month, condos also received approximately 95.2 percent of their original list price, a 1.6 percent increase from Sept. 2009.”

November 7, 2010

Honolulu condo and housing market update

The Honolulu housing market, which encompasses a large part of the Oahu real estate market, has shown some modest gains in the most recent tracking period. Perhaps more significantly, it has thus far avoided serious negative repercussions from the expiration of the federal housing tax credit. According to an October 7, 2010 piece from the Honolulu Star Advertiser, “The market continues to exhibit resilience in avoiding a hangover effect from the rush of buying earlier this year driven by a federal stimulus program that enticed home buyers with tax credits. A sizable foreclosure inventory also hasn’t dragged down median prices significantly. Inventory overall has remained relatively light, which is fueling competition among buyers for well-priced homes. There were 1,515 single-family homes on the market at the end of September, which compared with 1,711 a year earlier and 2,389 two years ago. Low interest rates and home prices that are still lower than they were three years ago also have helped drive sales. There were 274 single-family homes bought last month, up 8.3 percent from 253 a year earlier. For the first nine months of the year, the number of sales is up 20 percent to 2,251. In Oahu’s condominium market, the number of sales was down 15.8 percent to 298 last month from 354 a year earlier. But year-to-date, sales are up 21 percent to 2,937. The median sale price for condos last month was $335,000, up 8.2 percent from $309,500 a year earlier.”

Honolulu homes for sale were purchased for a lower median price in the month of September, which is an expected corollary to a higher rate of sales. According to an October 7, 2010 article from the Associated Press and BusinessWeek, “The median price of a single-family home on Oahu dipped slightly to $622,450 in September after rising for four straight months. The Honolulu Board of Realtors on Wednesday reported that September’s figure was down from the $640,000 reached in August but up from the $605,000 in September 2009. The median price for a condominium increased to $335,000, up $30,000 from August and 8.2 percent from a year ago when it was $309,500. There were 274 homes sold in September, an 8.3 percent increase from the same month last year. Condo sales softened with 298 closings, down 15.8 percent. The board reports that the market is holding steady and that homes and condos are selling faster than they did last year.”

November 5, 2010

Kailua housing and condo real estate market

The Kailua real estate market, which is a primarily residential sector of the larger Oahu real estate market, continued to face uncertainty because of the recent foreclosure “robo-signing” scandal. Despite relatively encouraging figures regarding home sales and median price, foreclosures remain an amorphous variable. An October 8, 2010 report from KITV News found that “The legal notices about foreclosed properties published in the newspaper, seem to take up more and more space. Bank of America and Countrywide Home Loans are peppered across the pages…It may be too early to say what the bank decision will mean to families getting foreclosed on. It is possible it will buy them more time to work things out with the bank. Higashi does not believe the foreclosure sales already in the pipeline will be affected, But any processing delay could also mean there will be a delay in when the properties go back on the market. Higashi said that could be bad for areas where inventory is tight, but in areas where the foreclosure activity is concentrated like West Oahu and Mililani there is lots of inventory right now. Another area hard hit by foreclosures is the resort market on the neighbor islands where buyers picked up vacation homes. It is not clear how many of those were handled by Bank of America.”

An October 14, 2010 report from Pacific Business News suggests that the negative effect of foreclosures on Kailua homes for sale and Oahu at large has not been substantially mitigated by the Bank of America foreclosure freeze. According to the piece by Janis L. Magin, “A closer look at the RealtyTrac third-quarter statistics on foreclosures released Thursday shows the number of bank repossessions in Hawaii soared 72 percent compared to the third quarter of 2009. RealtyTrac’s CEO James Saccacio says bank repossessions hit a record high nationally, but he also said that he expects those numbers to dip as the big banks halt the foreclosure process because of the investigations into the so-called robo-signing scandal. But even if the numbers go down moving forward, Thursday’s figures still show a large increase in bank-owned properties are going to go back on the market, if they haven’t already, and Realtors say those properties often have a downward effect on market prices.”