July 3, 2010

Oahu real estate market update July

The average price of an Oahu home for sale rallied strongly in the month of May, pointing towards the continued recovery of the Oahu real estate market. According to a June 3, 2010 article from Pacific Business News, “Oahu home prices are up 5.1 percent on average over the past year, according to a report released Thursday by a provider of real estate valuation and risk assessment for financial services companies. Comparing the three months ended May 31 with the same period last year, California-based Clear Capital ranked Oahu as the seventh-highest performing major market nationally, with a 2.2 percent price increase, behind Dallas, Pittsburgh, San Diego, San Francisco, Houston and Minneapolis.
The number of bank-owned properties on Oahu — 7.5 percent of the total — remains modest. The United States’ biggest offender in this area, Las Vegas, shows banks owning 45.9 percent of all properties on the market.”

The Oahu foreclosure market, especially in the commercial sector, continued to face difficulty despite the perceived recovery of the rest of the real estate market. According to a June 18, 2010 article also from Pacific Business News, “The Four Seasons Resort Maui in Wailea, which serves as collateral for one of the largest delinquent loans in Hawaii, got a bit of more bad news this week when a portion of the loan was assigned an appraisal reduction of 25 percent. The Maui resort tops a list of more than a dozen hotel, industrial, office and retail properties that have defaulted on multimillion-dollar commercial mortgages or have been lost to foreclosure. The $425 million loan on the Four Seasons Maui property, which is owned by billionaire Michael Dell’s investment firm, was transferred to special servicing in April after falling delinquent on payments, according to Trepp.com, which researches commercial mortgage-backed securities and commercial mortgages.”

The economy of the island of Oahu seems to be gradually recovering as well, which should help boost the already rising numbers in the Oahu housing market. A June 21, 2010 report from the Associated Press found that “Personal income in Hawaii has grown at the sixth-fastest rate in the country through the first quarter of this year. The U.S. Bureau of Economic Analysis reports Hawaii residents’ cumulative personal income increased by 1.35 percent in the first quarter compared to the previous quarter. Military earnings jumped the most, at 0.37 percent. Retail trade, construction and federal civilian earnings all went up 0.13 percent. The industry with the largest earnings decrease was real estate, at a minus 0.05 percent.”