Hawaii Foreclosures on the Rise in October

Posted by Justin - Head Web Head on November 23rd, 2009

Tags: Big Island, Foreclosures, Hawaii, Kauai, Lanai, Maui, Molokai, Oahu

3 Comments »

Just in case any of you missed the article…

Hawaii foreclosures up 134% in October

Hawaii Life agents, what does this mean moving forward? Will foreclosure rates continue to grow?

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3 Comments

Erik Hinshaw R(S) | Nov 23rd, 2009

I think so but something strange is happening here in Kona. While foreclosure rates rise the number of REO bank owned properties being release to the market seems to be getting smaller. It is getting to the point where it is hard to find any to show. If this keeps up prices might actually begin to rise. Perhaps that is what the banks are waiting for. Anyone else seeing this on other islands?




Katie Minkus, R(BIC) | Nov 24th, 2009

Aloha, Justin. You ask an intriguing question. Although Hawaii’s foreclosure rate has jumped 134% compared to this time last year, the actual number of foreclosures was just over 900 for all the islands combined. With over 5100 active listings on the on the Big Island alone, (and over 2100 BI properties sold so far this year), 900 foreclosures for the state doesn’t seem like anything to be too alarmed about, especially given the state of the economy! That being said, like most statistics, past performance is not necessarily a good predictor of future behavior. I believe it’s impossible to anticipate what is going to happen moving forward, especially when most Hawaii markets are completely different than traditional mainland markets. On the outer islands especially, where we operate mostly in a “resort market” we’re heading right into our busiest time of the year – the winter selling “season.” What Erik says is absolutely true, we’re seeing it at the high end as well where they’re raising the prices at Hualalai Four Seasons and Kukio resorts. Why? The Brokers there say it’s because they had such great sales this year versus what they expected. I suspect it’s because they’ve sold through most of the “distressed properties” that have been keeping downward price pressure on the properties. With the “competition” gone, sellers in these luxury resorts can theoretically go back to asking “what they want” and getting buyers to pay it.




Beth Thoma Robinson, R(S) | Nov 24th, 2009

I also think that as prospective buyers have become more comfortable with the uncertainty and patience required for a short sale, and we agents have become more skillful at getting short sales approved and closed, that properties which might have ended up as foreclosures are being sold as short sales. In the resort and North Kohala markets I follow, I wouldn’t be surprised to see more short sales, fewer new REOs–and then as Katie suggests, an actual upturn in prices as the distressed inventory gets worked through relatively quickly. But maybe Hawaii Life is unusual in the number of escrows we have in progress!