It's not an all time low, but it's close to a 5 year low.  Right now there are 83 homes for sale in all of Hawaii Kai at any price, most of them well over $1 million. 

In Ewa Beach and Kapolei combined, there are only 137 homes for sale.  That is extremely low.  In all of Kailua, there are 113 homes for sale, most of them well over $1 million. 

For the past 4 years, inventory has been on a steady decline, while sales have increased a bit.  Actually they were up 30% in 2010.  

Why?  Maybe everyone has such a low interest rate that they don't want to sell. Maybe people believe prices will increase if they hold for a while.  Maybe nobody wants to leave Hawaii.  

Whatever the reason, there are very few homes for sale, especially under $800,000.  In Hawaii Kai, there are 16 homes under that price.  

This isn't so much an interpretation as an observation.  The low supply of homes has kept prices stable in Hawaii, while other States are seeing huge numbers of foreclosures, high inventories, and quickly declinine prices.  

For the past 2 years, Freddie Mac's Super Conforming Mortgages and Fannie Mae's Temporary High-Balance Conforming loans provided higher maximum loan limits for high cost areas of the country ($793,750 in Honolulu County, versus the conforming maximum loan amount of $625,500). This was a temporary higher loan limit that is set to expire soon on September 30, 2011.

Right now, an Owner Occupant Rate on these "super conforming" loans are approximately 4.625%, 1.625 points according to Honolulu Home Loans, from whom I got an email this morning on this very topic.

It's unlikely that Congress would extend the temporary higher loan limits, so the impact on the real estate market in Hawaii could be substantial. However, in the past 2 years I've only seen 2 or 3 of those high balance loans, while most people seem to top out at $625k anyway, with cash for the rest.

Having worked in both the CA and Hawaii real estate markets, one thing that really stands out is that people in Hawaii are far more conservative, and often have very large down payments. In fact I think most people don't even consider the high balance loans, because they haven't even heard of them.

I don't think the government should extend higher loan limits, and actually it would probably be better if they got out of the finance business entirely. Fannie and Freddie caused the housing bubble via the "Community Reinvestment Act," as they forced lenders to give loans to people with poor credit and low income. Bad idea from the start.

Would you like 50 people through your first open house?  

Would you like multiple offers over asking price in the first week of your listing?

Would you like to get the market price of your home now, or wait 90 days to get a low ball offer? 

This week I listed this beautiful 2 year old house for $639k, while the comparable sales said we could probably list it $20k-$40k higher.  Had we done that, we would have probably taken 3-6 months to sell, and would have ended up at around a $650k sale price.

As a result of our 'too low' listing, we had over 60 people through the open house, and are now working with buyers on offers that are over asking price. We will certainly get this home in escrow by this weekend.  

The banks have known for a long time that listing a house 'too low' just results in people bidding up to about the market price.  That's why they always list their foreclosures way below the market price of a regular "fixer."

The problem is that sellers are fearful of under selling their home.  But in this market, buyers want to a deal, a good price, a fair price.  They would rather pick up a quick deal than low ball an old listing. The result is that you end up around the same price, but it sells faster.  

But here is the part sellers forget - if your house sits on the market 6 months, you've just made 6 more payments that you might have avoided if you had sold it quickly.  In the end, any difference in price (if there is one) is offset by the time you save and the payments you don't make.  

Bottom line - you almost CAN'T price a house too low.  The lower it is, the faster it sells, the more offers you get, the higher it gets bid up.  

This house will be open again Sunday, 2-5pm.  By then, we will probably be in escrow well over asking price.  It's been on the market for 3 days. 

The average rate for a 30-year home loan rose above 5 percent this week for the first time since last April — just as Americans are feeling more secure in their jobs and confident about the economy, and just before the big spring home-buying rush.

Freddie Mac said Thursday that the average rate was 5.05 percent, almost a full percentage point higher than in November, when it hit a 40-year low.

Economic signals suggest the recovery is gaining momentum. New claims for jobless benefits came in this week at the lowest in three years, and the unemployment rate has fallen nearly a full percentage point in two months. Americans are spending more and saving less.

The exception is the beleaguered housing market. Record foreclosures have forced home prices down, and last year was the worst for sales in more than a decade. About the only good news was that qualified buyers could get the deal of a lifetime from their lenders, if they had the means — and the stomach — for the market.

Now rates are rising, and analysts expect that will continue through the end of the year, to about 5.5 percent. The next few months are the busiest for the housing market — about one in three home sales happens in the spring.

Rates have been rising since the fall, mostly because of fears that higher inflation is coming. Investors have been demanding higher yields on Treasury bonds ever since the Federal Reserve announced its program to pump up the economy by spending $600 billion to buy government debt. Mortgage rates tend to track the yield on the 10-year Treasury note.

Mortgage rates are still extremely low by historical standards. Anyone who bought a house 30 years ago might remember paying 18 percent on their loan.

And many analysts say low lending rates are less likely to persuade people to buy than, say, reasonable home prices or a steady job market.

Home prices are expected to fall at least 5 percent more this year. Because of the feeling that the home isn't the failsafe investment it used to be, renting is more attractive. Especially when some analysts say it could be years before prices return to their pre-recession peak.

That may be contributing to the fact that, despite record inventory levels of affordable homes in nearly half of U.S. cities, mortgage applications continue their downward slide as buyers remain on the sidelines.

On a $200,000 loan, the payment difference between today's rate and November's is less than $100 a month — hardly enough by itself to spook a buyer.

If rates continue to rise, as many predict they will, the housing market will be in for yet more trouble. "Six percent would do serious damage if it happened in a very short period of time," said Patrick Newport, U.S. economist at IHS Global Insight.

Even 6 percent would be a bargain for homebuyers historically. Rates were in double digits through most of the 1980s. It wasn't until 1991 that rates consistently stayed below 10 percent. At the peak of the credit bubble in July 2006, the 30-year fixed mortgage was 6.76 percent.

"We're turning to a more normal mortgage rate environment, says Guy Cecala, publisher of the trade magazine Inside Mortgage Finance. "That pretty much means the 30-year in the 6 percent range. I don't think rates will be going down."

Built in 2008, this beautiful house has a huge landscaped lot, 4 bedrooms, 3 bathrooms, and an upstairs family room. It is prices well below the market at $639k and we expect a TON of showings and offers next week, after the first open house, which is Sunday. 

There is nothing else in Makakilo priced under $700k that has more than 2000sqft. 

Click this link to see 37 great pictures!

 I was honored this week to be named in the Top 100 Realtors in Hawaii (out of about 4000 agents) and will be featured in Hawaii Business Magazine's June Issue.  I was #45.

Along with this honor came a promotion to Vice President of Realty Executives Oahu, which is mostly a title only along with some benefits, and I'm very grateful for this as well. 

I give all the glory to my God and Father in Heaven for his grace and blessings on me.  Thank you Lord.  

Deuteronmy 8:18 says,  'You shall remember the LORD your God, for it is he who gives you power to get wealth, that he may confirm his covenant that he swore to your fathers, as it is this day.'

As a farmer prays for rain, I pray for my business and give him thanks for the gracious 'rain' in my life.

When I first walk into a home I'm going to sell, I can usually tell in a few seconds what needs to be changed in order to stage it. However, many sellers don't have the budget to stage it the way I recommend, and some just don't want to change anything, because they think their personal taste in decor is just fine (they're usually wrong.)

Once in a while I walk into a home and wish I had brought some kerosine, but often I can suggest a few simple and cheap methods to stage a home for showings. Here are my top 10 cheapest staging methods:

   1. Move and rearrange furniture. Most people make all the their furniture point at the TV, which is often not the best way to show a room. Moving furniture around in a house is a simple way to make things feel more open and usuable to a buyer.

   2. Clean. You'll get more for a cheap house, and you'll sell faster. Scrub the inside, power wash the outside. Especially if you have Hawaii's infamous red dirt on your house, you have to power wash that off. Clean the bathrooms really well. Hire a professionaly cleaner if you're not going to do a great job.

   3. Freshen the air. A lot of homes stink, literally. Especially in Hawaii, where people use a lot of Kim Chee and weird Asian spices (like my mom does.) Like the post below, you should use candles or Fabreeze. If it's REALLY BAD, you can get an ozone machine to take the must out of the air. It makes the house smell sort of like bleach, which is better than smelling like pets or Kim Chee.

   4. Paint. This should be on the top of your list, even though it's #4 on mine. Paint is cheap and it can make any room or house look better. Read my post about painting non-neutral colors and freshen up your house. In Hawaii the colors that won't get easily dirty are best, because there is so much red dirt (see above!)

   5. Flowers/plants. Go to the grocery store, not a florist, because flowers are way cheaper at Safeway than some little grocery store. They don't have to be perfect, just look lively. Get a lot of nice green plants. If you want, you can buy fake ones at Costco for about $100 each, and even take those with you to your new home. It doesn't matter if your home is in Mililani, Kailua, Town, Aiea, or Hawaii Kai, plants will completely change the way your home feels. You should definitely get some plants and flowers in your home. Water. Get your grass looking nice and green. Get your trees blooming with flowers. Mow the grass and get your landscaping looking good.

   6. Turn on the AC.  Don't make us sweat while we look so that we want to leave as fast as we can.

   7. Bake cookies, serve food. My wife and I visited a house a while ago where the owner was baking some cookies. It's been about 3 months, but she still remembers that house. Cookies won't sell your house, they will help the buyer remember. The smell of something is great for reinforcing the other senses.

   8. Remove or change the window coverings. I see a lot of weird old curtains here in Oahu. Homes with big dark curtains, homes with little cheap plastic blinds, homes with ugly 70's style curtains. I see it all. It's better to have nothing than something ugly. Get rid of the old ugly stuff.

   9. Play music. Put one a nice Hawaiian CD and it will leave your buyers with a pleasant mood. If they hear music they're less likely to hear any other outside noise, like traffic and airplanes.

  10. Garage Sale. Get rid of all your junk. The more you get rid of, probably the better. I'm not sure why but Japanese people (like my family) tend to keep way too much stuff. There are a lot of these types of people in Hawaii (the type that keep stuff, not Japananese, though there are many of us too) so please have a garage sale before you list your home for sale. It will make my job easier.

[UPDATE] - Price has been lowered to $660,000! 

What kind of home can you buy on Oahu for under $700k?  This house, just listed this week in Royal Kunia, might be one of the best homes available.  It's in a great newer neighborhood just 20 minutes to Schofield army base, and 30-40 minutes to downtown Honolulu.

This house is in Royal Kunia, a master planned community just North of Ewa Beach, about 1/2 mile to the freeway.  It has 2 good sized shopping areas, and a lot of nice open space.  The newly built neighborhood recreation center, available only to Royal Kunia residents, is one of the nicest on Oahu. 

This beautiful home is 2140 sqft, has 3 bedrooms, 3 bathrooms, a very large loft, and a nice new den addition of 10x11 feet that is not included in the square footage yet. The permit is in process, and will bring the house to 2250 sqft, if approved.

 It also has this great golf course view over Royal Kunia golf course, and in the distance you can see Diamond Head!  A view home on Oahu for under $700k?  That's right!

Check out this great kitchen with walk in pantry, stainless steel appliances, with a nice view out the window!

This upstairs loft is currently used as an office, but can also be a play room, additional family room, or can even be converted to a bedroom, which many owners have done in this neighborhood.  

If you're looking to buy Oahu real estate, and you have about $700k, Royal Kunia is one of the nicest neighborhoods you can get for the money.  

There are thousands of articles on the web comparing renting to buying, almost entirely focused on the monthly or annual cost of rents, mortgages, repairs, etc.

The problem is that it's not a fair comparison. No matter how cheap your rent is, after 30 years of renting, you still have nothing to show for it. Even if you had invested the money you saved by not buying, the long term tax benefits of owning a home, having a mortgage, and tax free capital gains, make owning a house a substantially better financial decision.  It's forced savings.

All you have to do is own it a long time. 

If you rent for 5 years, at an average Hawaii rent of $2500/month, you have paid $150,000 in rent.  And you have - nothing to show for it. 

If you put just 3.5% down on a $600,000 house ($21,000) and you pay the $3108/month mortgage, after 5 years your mortgage balance is $532,606.65.  You have nearly $70,000 of equity.  After 10 years, you owe $470,636.18, which means you have $130,000 of equity.  

And that assumes the price of the house hasn't budget a bit.  It's more likely that your home value will rise at least a little over 10 years.  

Now people like to try and compare this to investing the difference between renting and buying - as if anyone actually does that.  Do renters actually invest all the money they would have spent on buying a home?  And even if they do, is there any profit?  IF you had invest in the stock market 10 years ago, you would currently have LESS money than you did then, not even accounting for inflation.  

People don't invest well. They spend. Buying a home forces you to pay a payment, which means if you stay long enough, someday you will own that home free and clear. 

Or heck, don't listen to me, just rent forever. 

The Watermark Waikikis one of Oahu's best and newest luxury condos. As I've stated on my Watermark condo page, it is one of the few new buildings that has an actual lanai, and it also has some of the most amazing ocean and coastline views, since it's built in a way that allows ocean views from 2 sides of many of the units.

 The best units in the Watermark Waikiki are the high floor corner units - because they are the only ones that have windows on 2 sides to enjoy the ocean views.  As you can see from this building layout map below, units 01 and 06 are the best. 

Our new listing, unit 2906, is on the Diamond Head side of the building, which means it has beautiful views all day long, including the Hawaiian setting sun. With custom cabinets, granite counters, and wood floors, this luxury condo is an amazing vacation retreat or 2nd home.

If you've never been on the grounds at the Watermark Waikiki, you are missing out, really. The beautifully manicured landscaping with waterfalls are a great relaxing hideaway right in busy Waikiki. Check out the resort style pool with infinity edge.  It's truly the best that Waikiki has to offer.