The map above shows the decrease in Average Sold Prices for the 1st Quarter of ’08 vs. the 1st Quarter of ‘09
The map above shows the current conditions of Average and Median For Sale Prices and Sold Prices for neighborhoods on Oahu along with their individual ACS %’s. The ACS % is the % of all inventory for sale that is in Escrow with a Just Accepted Offer.
The ACS % which is a % of the total inventory for sale that is Just Accepted Offers indicates how high demand is. Right now the ACS % in this graph is showing us that demand is actually falling and we are almost at the height of the peak selling period.
The Median Sold Price has been steadily falling which is no surprise when you remember what I keep repeating about the price points that buyers are purchasing in at this time. It is the low end price ranges that most of the sales are coming from therefore we see this drop in Median Sold Prices. Look to the pie charts in this article for further explanation.
Sales have actually picked up. Is this a reason to rejoice? Is this an indication that the market is nearing the bottom as extolled in the Honolulu Advertiser this morning?
Both the writer for the Honolulu Advertiser and the President of the Honolulu Board of Realtors in this article that perhaps, ‘with caution’ that we may be nearing the bottom. Now, come on! Look at the sales graph! 254 home sales in June ’09 is o n l y 22 more homes sold than 12 months ago. This is reason to extol that we are nearing the bottom? This is a SALES CYCLE FOR THE SUMMER PEAK SELLING SEASON and nothing more.
Do you think we should rejoice about the Days On Market too? They did too in the article this morning in the Honolulu Advertiser. Again, look at the +13% over 12 months ago. Yes, the D.O.M. is low. This is nothing more than another cycle.
Now, here is something to rejoice about. The number of new listings coming onto the market has been declining for the past 18 months. This is contributing greatly to the inventory declining.
In the meantime the Median For Sale Price is up and down like a yo-yo and only -5% off from 12 months ago. This is because of the number of higher priced listings coming onto the market.
Now this is a nice drop in inventory and will go a long way towards getting us to a healthier real estate market.
Please remember that this figure is influenced greatly by the high priced listings coming onto the market in time for the peak selling season. Do you see the ‘ramp up?’
March 2009 Inventory For Sale
June 2009 Inventory For Sale
There is hardly any difference between the two pie charts.
March 2009 In Escrow with Just Accepted Offers
June 2009 In Escrow with Just Accepted Offers
Not much difference here either.
March 2008 Sales
March 2009 Sales
Do you see the shift to lower priced listings?
June 2009 Sales
Now here we can see the same shift to lower priced homes have taken place but to much lesser extent than we have seen in any of the other pie charts. There is a reason for this.
Like I said, if a high priced is going to sell this year, it is best to sell it now during the peak season and that is exactly what is happening as you can see in some of the more expensive price ranges.
I hope you have enjoyed this report. If you have any questions please feel free to either call or email me anytime.
Mike Gallagher, Broker in Charge, RE/MAX Honolulu
Ethics Complaints Review Committee Member
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Justin - Head Web Head | Jul 7th, 2009
Mike, I wrote a post about CNBC who also thinks the market on Oahu may be stabilizing. You can read it here,
http://www.hawaiilife.com/articles/2009/07/cnbc-thinks-the-oahu-real-estate-market-might-be-stabilizing/
I noted that the, “…increase in number of homes sold could very well be spurred from lower prices, lower interest rates and the Obama tax credit.” Do you think this could be the case?
I do think that prices will drop further, but I also think interests rates will rise which will offset any benefit of lower prices. Do you agree that now is a good time to buy or should we wait?
Mike | Jul 7th, 2009
Aloha Justin:
“Yes” I do think that the current interest rates and the Obama Credit is bringing a lot of first time buyers into the market place rigth now. I can see it in the number of sales. June was a little slower than I had hoped but May was very solid.
Right now there are ‘pockets’ of neighborhoods on the Island and I suspect similarly on the Outer Islands that are showing a very large uptick in sales and even a few areas with rising Median Sold prices. This is very good news for the market.
California is experiencing the same thing.
I have just run the numbers for June Oahu and I also compared them to the Ewa and Kaolei areas on Oahu which are typically the low price ranges on Oahu and I am now seeing a ‘bottoming out’ trend. The same is true for the overall Oahu figures as well.
Decreases in all stats are much more lower than they were a year ago and I am now hoping we are approaching the bottom of the market. If I am correct, I expect the bottom of the market to be around this Fall. I would like to see at least two more months worth of data to finalize this assumption, but believe, ‘optimistically’ with ‘caution’, that we are going to see the bottom fairly soon.
My next real estate article I will post in another few days will be all about this new data I am seeing now showing up in the numbers indicating that we may be reaching bottom soon. I will have supporting material to share.
“Yes” I also agree that if interest rates do start to climb and we know they will, it will lock out many buyers who will no longer qualify as they would at today’s rates. This will be very unfortunate to see, but with the current Administration’s rate of borrowing, I believe a rise in interest is enivitable. It is a question of when right now will this occur?
If I was a buyer and I found the right home and I could qualify for the loan I would buy it. I would not recommend waiting.
I hope this answers your questions. I thank you for your timely and important questions on this topic.
I wish you much Aloha,
Mike Gallagher, Broker in Charge, RE/MAX Honolulu
Ethics Complaints Review Committee Member
mikeg@hawaii.rr.com
808-384-9015
Justin - Head Web Head | Jul 9th, 2009
This answers my question perfectly.