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2012 Mid-Year Hawaii Housing Status

July 31, 2012 by Michael Borger 1 Comment

Aloha! Ok, we’re about a month past midyear 2012 but it still works as it can take a while for those troublesome stats to kick in. What a first half of the year it’s been for housing and real estate in Hawaii. Let’s look at some key points:

  • Inventory is tightening up just about everywhere and prices have creeped up. Homeowners are in many instances holding on to properties whereas before they may have considered selling. Is this a sign that the housing bottom is behind us? Perhaps….
  • ….but others still clamor that the banks are holding back about 90% of their foreclosed inventory and we’re about to get whacked back down again, maybe sooner than we thought. Do you agree?
  • I can tell you from my own experience running my real estate investment company that many homeowners today are also choosing to turn properties into rentals to either cash flow or at least break even and wait out an expected price appreciation to sell down later on the road for more gain.
  • The controversial Oahu rail project continues on, despite calls for its removal both in and out of the mayoral race.
  • Speaking of the Honolulu race for the mayor, who do you think is the best candidate for Hawaii’s homeowners? Cayetano? Carlisle? Caldwell? (Apparently your last name needs to start with a “C” to be mayor…)
  • The banks continue to foreclosure through the courts (judicial) and Hawaii homeowners who were in mortgage default for a year or even longer (yes, it’s happened all around us) are finding out that the time has come to decide how best to move on

It’s my opinion that the temporary tightening of inventory in Hawaii is just that — temporary. Sure, the banks can’t open up the faucet on wide of their shadow inventory and flood the market — we all know that will depress the local housing market to levels possibly even lower than they were a few years ago. But they have to figure something out and that REO pipeline will stay open for, as some estimators predictor, 3 to 5 years.

But here’s thing — it’s still very much tied to JOBS. And while Hawaii’s unemployment rate is very favorable compared to those of our mainland cousins (thanks to encouraging recent tourist numbers), we’re still connected to the national system and all its wonderful nuances.

STAT TIME

Let’s look at some interesting stats courtesy of RealtyTrac…

Bar chart showing declining foreclosure activity in Hawaii for the first half of 2012As this bar chart surely shows, the key point of interest is the steady decline in properties in Preforeclosure. In case you’re not familiar with the term, “Preforeclosure” generally means homeowners who are in default but have yet to be officially foreclosed upon. In other words, they are still the homeowners on title.

To the point, I have a hard time believing that the numbers of homeowners in default went from just under 500 in January to under 100 in June — as is many times the case, stats can be deceiving and not tell the whole story. I suppose there could be a logical reason for this, some mix of increased refinancing and/or successful loan modifications (the latter unlikely). Anyone care to shed some light?

Bar chart showing most Hawaii foreclosures in the first half of the year in the 300-400K value category

In this chart we can see, unsurprisingly, that the vast majority of homes either headed for foreclosure or already past that point fall in the 300-400K category. Unfortunately, these numbers include all housing types (SFH, townhouse, condo) so making a clear inference is a bit difficult, but it would appear that most homeowners in Hawaii needing help are in the lower end of the price spectrum when compared across the state. However, interestingly enough, the high end luxury homes are represented as well — I guess some people bit off more than they could chew in the good times!

By the way — completely unrelated — but is anyone else enjoying this year’s flowers as much as me and my girlfriend??

Source: via Michael on Pinterest

Filed Under: Foreclosures, Hawaii, Market Analysis Tagged With: Avoid foreclosure Hawaii, Foreclosure, Housing

Oahu Real Estate Market Rebounding – Don’t Believe the Hype!

September 8, 2010 by Michael Borger Leave a Comment

So I just had a quick glance at this brief report on real estate in Hawaii. It basically states that the average median price on sold houses and condos on Oahu climbed from July to August. The jump for SFH (single family homes) was over $40K — that’s quite an increase. Of course, it follows that someone is quoted in the article as saying that the increase in median price is a sign of a strengthening market.

I think it’s extremely premature to come to that conclusion. Anyone who has a basic understanding of statistics can tell you that a one-month spike of over $40K can at least partly, if not largely, be attributed to the decrease in the number of homes sold (each home sold then contributes a larger percentage to the change). Maybe a few more higher-end / luxury homes sold that month than normal which account for the climb by skewing the numbers. I know for certain that a few expensive homes sold in Hawaii Kai – that would most definitely bring up the average. Further inquiry would need to be done before coming to a clear conclusion. Forty thousand in one month seems to be more of an anomaly to me than a sign of a rebounding market.

I may be more conservative than other folks, but I believe in looking at the bigger picture. The real estate market on Oahu may indeed be somewhat of a different landscape from that of the mainland, but we are in the same “system” nonetheless. We still have problems with our economy and unemployment. We have countless foreclosures and short sales happening this very minute, despite some of the lowest interest rates in history. People ought to be flooding into the market, yet they’re not.

So while the news coming out of this article may still be considered positive by some, I’m going to temper my enthusiasm for the time being until a few more of these come across my desk. I’d advise you to do the same.

Filed Under: Hawaii, Market Analysis Tagged With: Hawaii, Housing, median price, Oahu, Real Estate

Interesting Article – American Housing Preferences

September 1, 2010 by Michael Borger Leave a Comment

I just read this article from MSNBC this morning. I found it a very interesting read, discussing how the housing preferences in America have changed over the past ten years. I think it says a lot about who we are as a society and what we value. What are your thoughts? Do you find all the changes to be positive trends? Has Hawaii followed suit or do we stand out from the crowd?

What do you think the report ten years from now will say??

Filed Under: Market Analysis, National Tagged With: Hawaii, Hawaii real estate, Housing, Market Analysis

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