Oahu real estate prices are up! *in some areas

I was reviewing the Oahu real estate sales data that came out this week, and I realized that the housing stats really show a tale of many cities. While areas like Ewa, the North Shore, and Wahiawa are showing huge inventory increases and price drops, other areas of the island are doing the exact opposite.

Since location is everything in real estate, I thought it would be good to post what the best areas are for owning and buying real estate in Oahu right now. Take a look at these areas that are shining (numbers are annual) :

Diamond Head : Inventory is down 29.3% since last year. Prices are up 5.4% even though the number of sales is down 1.7%. Diamond head is a no brainer. The houses are big and beautiful, with wide tree lined streets, gorgeous mansions abound, ocean views galore. Only a short drive to town, Diamond Head shines as a gem in Oahu real estate, always in high demand. Who would have expected inventory to drop by a third? Nobody probably. You just can't find anything like Diamond Head anywhere else in Oahu. The location close to town is unbeatable.

Waialae - Kahala : Inventory is down 39.1% and prices are up 3.5%. Number of Sales is also up 17.5%. These price gains in Waialae and Kahala are bigger than they look because the prices were high to begin with. The median price is $1.8million! This is where the CEO's and doctors live, the politicians and the people you see in the news. Manicured streets, beautiful homes, a great location just 5 minutes to town. Kahala has great ocean views and a home town feel to its stately properties that draws everyone in. With the island's best private golf club, it's also a draw for golfers with money. If you can afford to live in Kahala, you can afford the $50k membership at Kahala country club.

Aina Haina - Kuliouou :Inventory is down 25.5% and prices are up 5.9%. Even though the number of sales is down 18.7%, with inventory down even more than that, you can see why prices are up. This area is a sleeper too, because hardly anyone talks about it, but it has great homes. Usually the lots are nice and big, ocean views are available in the back of the valleys, and it's closer to town than Hawaii Kai. Also, with the recent purchase of the Aina Haina shopping center by a mainland investor, we expect to see some great renovations to the neighborhood making real estate even more desirable!

Hawaii Kai : Inventory is down 12.6% and prices are down 0.9%. however, the monthly median price was up 11.5% to $847,500 since last month! Whoa! Can you imagine prices rising that much in one month? Well they didn't really. It just means that more expensive houses sold this month than last month. Probably a couple real big sales that drove the median price up. Hawaii Kai is always going to be desirable and in high demand because it fits the upper midlle class so well, and is so nicely located just 8 miles to town. Also the homes on the marina are fanatastic. If you like boating, Hawaii Kai is for you.

Kailua - Waimanalo : Inventory is down 21.2%, prices are up 2.5%. I would have thought that prices in Kailus would be up more than 2.5%, but it's also interesting that while inventory is down, the number of sales is up 8% since last year. So you have a few factors indicating that prices should be rising in Kailua for a while. The numbers get skewed because of Waimanalo, which really is a totally separate community. It's unfortunate that the Honolulu board of Realtors lumps them together because they have very little in common, especially in the are of real estate.

Mililani : Inventory is down 11.1% and prices are up 2.4% The number of sales is down 7.4%. This newish community has a huge draw on mainland transplants because of the newer homes and master planning. Nice amenities too. The community center in Mililani has a nice pool and rec area. Great schools too! In fact the schools in Mililani are always near the top of everyone's list. Homes in Mililani are usually built in the last 10 years, of course they're newer on the Mauka side than the Mililani town side.

The biggest price gainer of all was Wahiawa - but I think it's mainly because it was so cheap for so long. A lot of run down areas in Wahiawa, but recently there have been some new homes being built. With a median price of about $400k, it's very affordable.

Honolulu welcomes bicycle riders! Wins award!

This article was published in the Star this morning. "The League of American Bicyclists awarded Honolulu an honorable mention in its Bicycle Friendly Community program."

I've never thought too much about it, but I do see a lot of bicycles on this island. It seems like every few weeks there is some major race. Last weekend was the century ride, in which people ride 100 miles around Oahu. That must be one heck of a ride.

"The city recently released a sustainability plan that calls for the completion of an islandwide Bikeway Master Plan by 2008. City planners are also integrating bike paths into proposed development around rail transit stations. "

Ocean Pointe townhouse - someone please steal it!

It's no secret that prices in Ocean Pointe have gone down a bit in the last year. With inventory in the Ewa and Kapolei areas up 7.6% since last year, and prices down 5% in the same period, no wonder it's been harder to sell a house in Ocean Pointe.

I've written a lot about this great new community, which isn't that new but is still growing. The builder, Haseko, is still adding new properties, which is making it hard to sell the resales. Recently Haseko has offered to pay about 3% in seller concessions, which adds up to a lot of points paid for a great interest rate! With median prices in Ewa around $535k, paying 3% is a lot! Also, the builder is now offering full upgrades on everything and full landscaping. Builders never want the price of real estate to go down, so instead they go crazy with upgrades and when things start going south on them, they start buying cars and furnishing, even vacations. A client of mine just closed on a purchase in Ocean Pointe, and the builder agreed to give them a 3 car garage instead of a 2 car garage. They also paid 3% in seller concessions so they could have a killer interest rate.

I currently have this great townhouse listed in Ocean Pointe for $389k. It's 3bed, 2.5 bath, and has a huge garage. It sits right across from the new elementary school, Keonelua. So this house is perfect for people who want to be close that school and have a price target of $400k or less. In fact of the 18 listings in this complex, we are the cheapest one. And it shows great! Homes in Ocean Pointe are always pretty nice inside, since they are only a few years old, and this one is no exception. Great kitchen, upgraded floors, the works. We had originally listed the house at $409k, but with the market slowing the mortgage crisis hitting Oahu like everywhere else in the nation, we knew it was important to get sold quickly, so we reduced the price this week to $389k. I'm kind of surprised that we didn't sell in a day or so at this price, but I'm sure this weekend will bring us a lot of showings and buyers, and ultimately, offers!

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.

Disney in Oahu! Great news for Oahu real estate!

The Advertiser reported today that Disney has just decided to build a luxury resort at Ko Olina beginning next year.

Here are the highlights that are pertinent to Oahu real estate:

• The resort is expected to open in 2011 and provide 1,000 jobs.
• There are absolutely no plans for a theme park.
  Lingle said the project will add jobs and help the community.
• Ko Olina master developer Jeff Stone said he was elated by the news. "It's a dream come true."
• It will actually increase public access to the beaches at Ko Olina becayse this development will add parking.
  This development should help in the larger plan of nurturing Kapolei as a secondary urban center, creating the true "second city."

Whenever new jobs come to Oahu, and national attention is brought to our island by a big name like Disney, it's sure to help the real estate market in Oahu. Particularly, in this case, the market in Ko Olina and Kapolei. With Kapolei so close and hundreds of properties at Ko Olina, thie new resort can only help the cause.

As a side benifit, the new jobs will mean more people driving to Ko Olina, and less people driving to town. That should help with the traffic from the west side into town. Great news!

This is really a great thing for Oahu real estate. And also for my kids.

Oceanview homes in East Oahu

Everyone loves an ocean view, and Hawaii has the best ocean views in the world. On a clear day you can see Molokai and Maui in the distance from East Oahu. The great thing about homes in Oahu is you can have an ocean view without being near the ocean, or you can be way up on a hill just a few hundred yards from the ocean, or you can be right on the beach!

If you live in East Oahu, you can be on a cliff in Diamond Head and have a great ocean view from high above the beach, or you can get a house right down on the sand. In Hawaii Kai you can live up on a hill like Mariner's Ridge, which is about a mile inland, but has amazing views of the marina and the ocean.

Or you can live in Portlock and Koko Kai where the ocean seems to coming right up to your window. Some of the houses there actually feel like you're in a boat, because the ocean view is half way up the horizon and the water is so close. I recently walked into a $12million listing in Koko Kai and started feeling like the house was rocking because the ocean was moving so much. It was just my mind playing tricks on me of course!

There are plenty of areas in East Oahu that are affordable (by our standards) and have an ocean view. Some of the upper areas of Aina Haina, Mariner's valley, even a few houses in Koko Head terrace have a nice view.

The question it, how much are you willing to pay? If you want a great view like this, it's probably going to cost you a premium of $300k on your house. Maybe even more if the view is really great and unobstructed.

September home sale stats. Number of sales down 29%, prices up 4.8%

I've been saying for some time that the market here is still strong and going up, and today's stats vindicate that. The highly anticipated September homes sales stats were released with better than expected results.

While the number of single family home sales was down 29% compared to the same month last year, overall prices were up 4.8%. Total condo sales were down 13.9%, with prices up 4.7%

This is pretty much in line with what was happening in California about a year and half ago, when sales numbers dropped but prices continued to climb. Many people (including me) think the Hawaii market follows CA by a year or two. The bad news is most of CA priced are now down about 15-20% from last year.

The overall median sales price for single family homes in all of Oahu remained at $650,000, the same as last month, while condo sale prices went up to $335,000. The highest we've ever reached for single family homes was $685k in June. While some people have been predicting a big crash, that has yet to materialize.

Prices were down most on the North Shore, where the median price dropped by 20.3% to $637,500. However, that number is quite deceiving because only 4 homes sold on the North Shore last month, so the price is effected more by the 2 low sales.

Even though the number of sales on the island were pretty low, with only 255 homes selling, the inventory of single family home was only up a little to 1936, which is the highest this year, but lower than all of last fall. Condo inventory was barely up to 2486, which is also lower than much of last year.

So why is inventory not up more, since sales are down so much? Answer - Because the number of new listings was down 7.7%, and there have also been a huge number of expired and withdrawn listings. So while less people are buying, a lot of people are also not selling. Most likely what has happened is that the people who were panic selling already sold, and now it's just people who are moving.

As you might expect, the areas in high demand are still rising in price.
East Oahu prices were up 5.1% to $940,000.
Hawaii Kai sales same as last year but prices up 11.5% to $847,500.
Metro Condos up 8.7% to $325,000.

And homes are still selling fast. Number of days on market - 45 days for single family and 42 days for condos.

Now - the important part. LISTEN UP: We always say that Kahala is the first to go up in an up market and the first to go down in a down market. When we get in a slump, we say, "Kahala will lead us out."
So here is some great news. In Sept compared to a year ago, 62.5% more Kahala and Waialae homes sold with the prices up 19%.

So if you're thinking of buying, you better get on it. There are only 5.1 months of inventory of single family homes for the whole island. 4.9 months of condos. Tell that to your family on the mainland. They'll be in disbelief.