Hawaii Real Estate starts Here!

The Honolulu Board has published the monthly statistics and there are some interesting take-aways from the single family homes monthly indicator report.  We are seeing a year over year growth in median sales price.  It is a small 4.2% gain, but taken along with other indicators we could be headed toward continued increases in prices.  The growth in the number of sales from March 2009 to March 2010 was up 32.1% and the inventory of homes has declined by 12.9%.  So, we are at a point where we have only 7.2 months of supply of single family inventory.  That is a dramatic decline of 29.8%.  This taken with a decline in the days on market by 10% to 72 days may be a signal that we are looking at perhaps a spike in prices coming very soon.

There is still an aggressive push by the home buyer tax credit.  As the deadline approaches there is likely to be a continued increase to the frenzied pace of buying.

Click here to view the entire report.

Everyone knows that there are bank owned properties out there in Hawaii.  I have heard that there are perhaps hundreds of bank owned properties or REOs (Real estate owned) properties out there on Oahu just waiting to come onto the market.  It has been the big shadow overhanging the market.  People have been expecting that these properties may come on the market all at one time just adding tremendously to the inventory and crashing prices.  Every state in the country has been worried about this, but especially those hardest hit with foreclosures:  Florida, California, Nevada, and Arizona.  So let us face the fear.  The fact is that there are no regulators that are forcing these banks to dump these properties on the market.  So if no one is forcing them to put these properties on the market, will they put them on the market now?  Perhaps not.  And more importantly perhaps not all at one time.  If the foreclosures have been kept back from the market, the banks think that the real estate prices will not only stabilize, but rise across the country.  They are more likely to gain much more by waiting and not flooding the market with inventory.  So, the longer we do not see vast numbers of REOs coming onto the market, the more people should see that there is more room on the upside with prices.  I believe that when the banks feel that the market is strong enough that they may see a possible time to make gains from their losses they will put a measured amount of their inventory on the market.  I do not believe, unless forced by regulators, that they will flood the market and depress prices further.

The May 2009 Honolulu real estate resale statistics came out this past week.  Looking at the numbers at first glance, the report revealed some interesting information which has been little discussed.  Not considering the median sales price, the number of single family home sales has increased this year.  The month of May saw 225 homes closed up from 189 in April and up from January at 122.  Normally a real statistician, which I do not claim to be, looks at seasonally adjusted numbers.  On the mainland, there is definitely lines of activity throughout the year because of weather and summer vacation from school.  Thus there is a substantial slow down in sales during the winter months and a real uptick over the Summer months.  Hawaii is of course different.  We do see an uptick over the Summer, but December and January seem to be a good months as well for activity.  Fall can be a little slower just like February, but we do not have distinct lines of activity like other places.  So, even though most people would look solely at the year-over-year numbers and compare May 2009′s 225 sold homes with May 2008′s 263, a decline of approximately 14.5%, the entire economy is a completely different animal than what it was last year.  The real test now is if the stimulus package, the first time home buyer tax credit and the low interest rates are working.  I would conjecture that a 16% increase in the number of homes sold from April and a 45.8% increase from January’s dismal 122 homes sold can be looked upon as a truly hopeful sign.  It certainly will take some time to show if this is indeed working, but going into what is normally a busier real estate time of year, I suspect the numbers will only improve.