PRICE REDUCTIONS all over Oahu!

Several of my clients around Oahu have reduced prices on their homes this week, with the market seemingly slowing. The price reductions don't indicate a decline in housing prices, just a coming to reality with the current real estate market.

Price reductions don't always mean prices are coming down. What?

Usually when a seller wants to sell their home in Oahu, they assume that they won't get full price, and so they price it just above what they feel the sale price will be. Seems reasonable to most people that you don't always get full price. However, that tactic is backfiring on a lot of people lately.

Why?

Because believe it or not, most offers are coming in at or near full price. Yes it's true. Even though the Oahu real estate market is slowing in number of sales, homes that are priced right are selling at very close to asking price, or at full price. I've been going through the sales in Hawaii Kai, where I specialize, and I've found that a home either sells quickly at about full price, or it sits for a long time while the seller comes to grips with reality and lowers their home price a few times, until finally, he gets his asking price.

The bottom line is that homes are taking an average of 47 days to sell, so if you get beyond that without any offers, you've priced your home too high. The market is still strong, especially in East Oahu areas like Kahala, Diamond Head, Hawaii Kai, and the windward side in Kailua. The inventory in these areas is down and prices are still moving up.

So if you price your home according to the recent comps you should expect to sell quickly. In the case of my clients who reduced their prices, many of them wanted to get top dollar and even refused offers below their asking price.

One client of mine received 3 offers early on below asking price, but one of those offers was higher than his current list price. The market is not waiting for us, so we need to catch up to it. We need to come to grips with the reality of the slowing market, especially in west Oahu areas like Ewa and Kapolei.

Yesterday we reduced the price on my listing in Triangle (above Portlock) from $2.2million down to $1.999million. We expect to sell this quickly. We did a broker's open yesterday and had about 20 people come through. All were very impressed with the house and felt that it should sell right away. While a $200k price reduction seems like a lot, when we listed the house we were in a different market, even though that was only 60 days ago.

The market has now taken a hit from the national mortgage crisis, and buyers are more cautious. It doesn't help that mortgage rates for jumbo loans are now around 7.5% with points. So when we reduced the price, we simply reduced it to what we expected it to sell at when we were listed at $2.2million. Now we advertise this beautiful ocean view home at $1.999million, firm.

Letting a buyer see exactly what a seller's bottom line is reduces the need for haggling. When a buyer sees $2.2million, they wonder if they can get a good deal for a bit less. Now at our new firm price, they know it's a bargain and don't feel the need to negotiate. They can see that $200k is a huge price reduction. In Triangle and Portlock, this is the best house for the money, In fact, in all of Hawaii Kai, I challenge you to find anything better for under $2million. It's now a bargain and that's what buyers in Oahu are looking for.