According to an article in the Honolulu Advertiser today, Hawaii’s unemployement rose, Still right at the lowest level in the nation. Two other states have joined Hawaii with unemployment rates of 2.5 percent or less, the U.S. Labor Department reported Friday.

For March, Hawaii unemployment was 2.5 percent with seasonal adjustment, up from 2.3 percent the month before, and 2.4 percent without, the same as before.

Utah had 2.4 percent seasonally adjusted unemployment and Montana joblessness sank to 2 percent.

Hawaii has 12,300 more jobs now than it did a year ago, the Bureau of Labor Statistics said. The work force includes 109,000 people working in leisure and hospitality, about 1,500 more than a year ago, and 37,200 people working in construction, about 1,800 more than a year ago.

Click Here to read the actual article

Home sales on Oahu during the first quarter of this year were down, while prices were flat, according to new statistics released Monday by the Honolulu Board of Realtors.

The median price of a single-family home on Oahu during the first three months of the year went down by less than 1 percent, to $620,000 from $625,000 during the same period in 2006, the board said.

The median price of a condominium during the first quarter was $320,000, a 3.6 percent increase from the same period in 2006, when it was $309,000.

Sales volume was down for both categories, with single family homes slipping more than 8 percent to 865 sales, down from 943 sales during the first quarter of 2006.

Condo sales fell more than 19 percent to 1,361 units sold, down from 1,687 units sold in the first three months of last year.

Brought to you by (Pacific Business News (Honolulu) )

What does this mean exactly…..We have flattened out. Plain and simple.

The following article is a good reason why trusting your Realtor for advice on a lender and other vendors is a good idea. Being in this industry on a full-time, daily basis and having worked in the industry for many years means that I have worked with hundreds of lenders, appraisers, escrow officers/companies, home inspectors, etc. This is apart of my job and it is a big part of what I do. I know who is good and who isn’t. For the past 6 months, I took my list of people/vendors who have done a great job for my clients and I sat down with each of them, interviewed them all again, and made sure that we are all on the same page. What that means is that anyone on my Recommended Vendors list, understands that my clients best interest are always the top priority, and to be upfront an honest with a client. If I refer you as a client to someone and things don’t work out well, then you will obviously be upset with me for referring you to that person. I don’t want that. I lose credibility that if that occurs. So when you are looking for a good local vendor, know that the relationships that I have built over the years are for your best interest alone and if you are happy with the service I provide, then you should be equally happy with the service from a Vendor I recommend. the following article shows why you must be careful with vendors that are apart of your most expensive assest.

by Denise Lones (M.I.R.M., CSP) the President of the Lones Group Inc, in Bellingham, Washington

Have you seen the headlines? Top national news story a few week’s ago:

New Century Financial Corp., the second largest sub-prime mortgage lender, is broke. They can’t pay the creditors who are demanding money and rumor is that we’ll be hearing about bankruptcy soon. Even the New York Stock Exchange has suspended trading for the company, once a giant among lenders.

It finally happened.

The sub-prime market was being pushed to its edge for months - by lenders with unethical predatory tactics - and now it’s getting ready to collapse in on itself. These predatory tactics included ridiculous mortgage programs being offered to consumers who literally cannot afford them.

There was a report on Nightline not long ago about an elderly woman who was told by a lying sales rep that she would have no payments for five years on her refinance loan. But she had to sign before 5 p.m. that day.

Now she’s losing her house because the bills started to arrive for $2,300 a month and she takes home only $1,000 a month from her social security. She’s going to lose her home because of believing an unscrupulous company that made promises it never intended to keep.

I’m sick and tired of it. We as real estate agents have to watch this every day and sometimes there’s very little we can do about it except to advise people that perhaps they’re getting in over their heads and they should talk to an attorney.

Because even though we get a sale, we know what’s going to happen. The people who fall victim to sub-prime lenders typically don’t have the ability to pay back the loan. They miss payments and go into foreclosure. All because they signed under pressure that they’re going to lose what they have been conned into believing is a “good deal”.

This has been going on for years. But finally - FINALLY! - the predators are getting what they deserve.

This is good news.

No, it’s not good news for the people who have been bilked. I’m not saying that. But what I am saying is good is the fact that this industry is now squarely under the spotlight. It’s the top story on the nightly network news and on the Internet. Federal authorities are even beginning to take a look.

The Mortgage Banker’s Association, a Washington-based trade group, recently said that in the 3 rd quarter of 2006, delinquencies were at 12%. This indicates that investors are no longer interested in sub-prime loans and they’re trying to sell them in a frenzy. This puts even more media attention on the crisis.

Maybe the con games are over. Maybe now people will wake up and see what’s been going on for years. Maybe now we can get back to lending money only to people who can afford it.

As a real estate agent, it is your responsibility to at least understand what your clients are getting themselves into. Don’t feed into the frenzy by taking them down a road that may lead to a cliff. Read about it. Investigate it. Understand it.

I know agents who have erroneously thought that sub-prime mortgages are good for the industry because they allow more people to be able to “afford” to buy a home. The problem is that these people truly can’t “afford” to buy. No amount of low initial ARM rates can make up for the fact that they won’t be able to keep up with the payments - especially when the non-caring lender hikes the ARM up a few points.

Here’s something else to think about:

Picture a neighborhood with a strong sales value. Suddenly, one of its homeowners is forced into a “Desperate Sale” because of a bad loan. They have to sell quickly to avoid foreclosure, so they take the first lowball offer they can find.

What happens then? All the homes in the neighborhood are suddenly devalued because one home sold for less than it’s worth. What if there was another homeowner in the neighborhood who had to do the same thing? And another? Do you see how the value of a neighborhood can be completely decimated?

These mortgages are not good for your clients nor the industry. The best thing you can do for your clients, your industry, and yourself is to advise your clients to speak with an attorney before signing anything.

And tell them to never sign anything under pressure! If it’s truly a good deal, it will still be there tomorrow.

The Following is from Keri Shepherd’s Mortgage Newsletter…

While the Fed speakers didn’t give any market-rattling comments, the Fed Meeting Minutes were a different story. Remember that the Minutes are the “Fed Unplugged”, giving all the commentary between voting and non-voting members, before the carefully crafted formal Policy Statement is released to the public. The Fed intentionally delays the release of the Minutes, so the market has time to interpret and adapt to the Policy Statement itself, before they throw the “off the record” discussion into the mix for review and analysis.

The Minutes revealed that although the decision at the meeting was to leave the Fed Funds Rate unchanged, Fed members remain concerned about inflation, as recent indicators show that inflation is stubbornly remaining at a level above the Fed’s comfort zone of 1 - 2%.

THIS NEWSLETTER IS HEREBY CERTIFIED AS BEING 100% “IMUS FREE”. But just in case you didn’t get enough of the Don Imus story that seemed to infiltrate every minute of news time last week…just turn on the television or radio for 30 seconds and you’re sure to catch an update. The market had a busy week on its own…and the Fed took center stage, with the “Minutes” from the last Fed meeting being released, as well as several members out and about on the speaking circuit.

While the Fed speakers didn’t give any market-rattling comments, the Fed Meeting Minutes were a different story. Remember that the Minutes are the “Fed Unplugged”, giving all the commentary between voting and non-voting members, before the carefully crafted formal Policy Statement is released to the public. The Fed intentionally delays the release of the Minutes, so the market has time to interpret and adapt to the Policy Statement itself, before they throw the “off the record” discussion into the mix for review and analysis.

The Minutes revealed that although the decision at the meeting was to leave the Fed Funds Rate unchanged, Fed members remain concerned about inflation, as recent indicators show that inflation is stubbornly remaining at a level above the Fed’s comfort zone of 1 - 2%. Bonds didn’t like the inflationary concerns, and lost some ground…with home loan rates worsening just slightly. The Fed is leaving an open door for more hikes ahead - as well as the possibility of cuts - completely dependent on what the incoming economic data tells them in the coming months. And a highly watched measure of inflation is due out next week - read on to know what to be looking for.

WAIT A MINUTE MR. POSTMAN…YOU’RE SERIOUSLY GOING TO RAISE POSTAGE RATES AGAIN? IF YOU’RE SICK OF DEALING WITH THE ANNOYING “MAKE-UP STAMPS” EVERY TIME THERE’S AN INCREASE, LEARN THE NEW WAY YOU CAN AVOID IT…FOREVER…BY READING THIS WEEK’S MORTGAGE MARKET VIEW.

Forecast for the Week

The economic calendar is a heavyweight this week, loaded with news of Housing, Retail Sales and Manufacturing…but one of the most important releases will be the Consumer Price Index (CPI), which measures inflation on the consumer level. Simply said - how much more are we as consumers paying for goods and services than we were last month, and last year? With the Fed’s elevated concerns over inflation, this report could pack an extra punch.

The Personal Consumption Expenditure index recently measured year-over-year core inflation at 2.4%. And while the Consumer Price Index has a slightly different inflation-measuring formula, the read last month was at a beefy 2.7%. The Fed wants core inflation under 2% - thus why these numbers are concerning. Watch to see how the year-over-year CPI numbers come out - if they show a level under 2.7%, this should be good news for Bonds and home loan rates, as the market will want to feel inflation is at least trending in the right direction. But if the number sticks at that 2.7% range - or moves higher - hold onto your hats, as home loan rates could pop higher on the news.

Click Here to see her newsletter

Keri Shepherd with Charter Funding always has a great newsletter that she publishes. She outlines what the short term interest rate outlook will be in her most recent newsletter. If you are getting ready to buy, this will be a good read for you. You can also sign up to receive her newsletter on a regular basis. Click Here to read her newsletter.

An article came out today in the Honolulu Advertiser that gives a look at the national housing forecast for 2007. Keep in mind, this is a national forecast and not a Hawaii forecast. While the northeast declined last year in sales price, the west coast and Hawaii increased slightly.

“The subprime loan “debacle” will make it more difficult for borrowers to get mortgages and could cause U.S. home prices to fall this year for the first time on record, the National Association of Realtors said yesterday.
The 2007 median price for an existing home is forecast to decline 0.7 percent to $220,300,”

The article does bring up some important points. The Sub Prime Lending that has been such a nightmare, has caused lenders to tighten their lending guidelines. This will in turn decrease the number of people in the Buyer pool because less people will be able to qualify for loans. A .7 decrease is hardly a huge amount, but the headline of the article would surely grab your attention. Nice way to sell newspapers. Interest rates are expected to increase here in the short term based on some of the economic data. There is a great newsletter about the current state of interest rates, Here. We will see how Hawaii fares in comparison to the national forecast. To read the full article, Click Here.

“NEW YORK, April 11 (Reuters) - The Federal Reserve, according to the minutes from its March 20-21 policy meeting, believed that weaker-than-expected economic indicators and “uncomfortably high” readings on inflation suggested greater risks of slower economic growth as well as greater uncertainty that core inflation would recede as expected. ”

Rate hikes will effect your borrowing power and the more the rate goes up, the more your monthly payment will be for borrowing on the same amount, when you do go to get a loan.

Lets say for example you can borrow $600,000 at 6% interest, fully ammortized over 30 years. Your monthly mortgage payment would be, $3,597.30.  If you waited six months and bought the same home and took out a loan for $600,000, with the same terms but your rate went up only a quarter of a point to 6.25%, then your payment would be $3,694.30.  That is almost $100 more a month for a quarter point rate hike to borrow the same amount of money!  $1200 a year is a nice chunk of change to keep in your pocket and not be paying to the bank in the form of interest.

If your maximum qualification was a payment of $3,597.30 ($600,000 @ 6%), and rates go up to 6.25% then the new max purchase price you could qualify for would be just below $585,000.  You lose $15,000 of borrowing power if the rate goes up only .25%.  This is why it doesn’t make since to try and wait for the market to drop before you buy.  If the indications are correct for interest rates, waiting could cost you money!

Now, rate hikes, don’t typically effect interest rates immediately.  It usually takes a few months for the effects to kick in and adjust rates up, but we are still close to historic lows for mortgage interest rates and the housing numbers are good and appear to show that we are leveling off.  Waiting could mean the difference in being able to afford the home you want, and not being able to.  Food For Thought.

Here is the full article from the Honolulu Advertiser

Attached is a summary of the 20 page market stats for March.  This is an exciting time in the market, and the numbers look very good.

“The short-term forecast for the residential housing market looks quite good, based on the number of properties that went into escrow this month,” said Harvey Shapiro, research economist for the Honolulu Board of Realtors.

You can view the full 20 pages of the March 2007 market stats and all the previous months stats as well in the Member Login section of my website www.hiestates.com  If you don’t have a username and password feel free to sign up for one today.

The number of residential sales for both SFH’s and Condos increased significantly from the month of Feb 2007.  The number of SFH’s that sold was up from 272 sales in Feb to 330 in March.  the number of condo sales was up from 402 in Feb to 541 in March.  That is a 35% increase in teh number of sales.  To keep it in perspective though, we are still well below the number of sales we saw from March of 2006.  These numbers support the increase in activity in the market I have seen over the last few months. Click on the thumbnail to the left to see a larger view.

The median sales price for SFH’s and Condos for Oahu remained almost unchanged.  The median sales price in March for a SFH was $643,500, up from $614,500 the month before but down slightly from the same month (March) of 2006.  For condos the median sales price for March was $321,000.  Up from $320,000 the month before, but up from $312,000 the same month (March) of 2006. Click on the thumbnail to the left to see a larger view.

The median number of days a property stays active on the market decreased slightly for SFH’s and decreased significantly for condos.  The median number of days on market for a SFH for March was 65 days. Down from 70 days in Feb.  For Condos, the median number of days on market in March was 40, down from 59 days in Feb of 2007.   Click on the thumbnail to the left to see a larger view.

The thumbnail to the left shows the months of inventory remaining broken down by the type of property (SFH or Condo), price range, and location on the Island of Oahu.  As you can see the SFH’s over $1 million dollars have 16.3 months of inventory remaining.  In other words, if we didn’t bring any more properties on the market, it would take 16.3 months to sell all of the 1$ million dollar plus homes.  For homes i the $500-$1,000,000 range there is between 4 and 6 months worth of inventory on the market.  For Condos over $500,000 there is 10.9 months of inventory remaining, howeverm for condos priced between $200,000-$500,000 there is 4.4 months of inventory remaining.

Overall the market is looking pretty healthy.  There is a glut of SFH’s above $1.0 million dollars and the same with condos over $500,000.  The market is really moving under those price ranges, adn with shrinking inventory and increasing activity in the market coming up to our summer months, this all makes for an exciting market right now.  If you have any questions, feel free to contact me at scott@kahalaassociates.com

There are signs that Honolulu’s real estate market is starting to come out of its slowdown, despite a slight year-over-year decline in March.

Prices for both home and condominium resales gained momentum from February to March, inventory dropped and properties sold at a faster clip, according to data released yesterday by the Honolulu Board of Realtors.

“The short-term forecast for the residential housing market looks quite good, based on the number of properties that went into escrow this month,”  said Harvey Shapiro, research economist for the Honolulu Board of Realtors.

While the total sales volume lags last year by 11.4 percent, Honolulu’s real estate market should experience a greater volume of closed sales with higher prices in both property categories in April, Shapiro said.

 For the full article Click Here

There was a great artile in the Honolulu Advertiser this past weekend that really explained the benefits of owning a home versus renting.  The tax deductions alone make a huge difference, not to mention, the appraciation over the long run and the fact that your mortgage payment can be fixed for many years to come. With a fixed mortgage, your payments stay the same even as inflation pushes the cost of living higher (rental increases), where your landlord can raise your rent everytime the lease expires. Click Here to read the article