Hawaii Market Heats Up For Global Investors.  Do I need to say more? This great article in teh Pacific Business News is worth reading.

Sales of Hawaii real estate to global investors are heating up as the local market softens, with international buyers often paying top dollar for residential and commercial properties.

It’s a trend seen across the United States, with a weak U.S. dollar creating the perception of bargains to be had in American real estate, from beachfront homes to commercial land and buildings.

“It is a very significant bargain right now for people who have substance and the financial wherewithal,” said Michael R. Good, president and CEO of Sotheby’s International Realty Affiliates, who was in Hawaii this week. “There is a dynamic that is happening and it is much more of a worldwide marketplace than I’ve ever seen.”

According to the latest annual survey by the Association of Foreign Investors in Real Estate, its members — who own some $230 billion in real estate in the United States — said that more than half of their planned acquisitions in 2008 would be in the United States and that they planned to spend some 16 percent more than last year on U.S. acquisitions.

I finally got around to reading the latest Hawaii Developers Council Newsletter.  There are some excellent articles in there.  One on “Smart Growth” in Hawaii and on Oahu. What does it mean, and how is it implemented on Oahu and what are the benefits?  I always like reading the commercial/industrial news and info, but that is because I am not normal.  There is an interesting one about the new Allure at Waikiki condominium project and their ability to “lock-in” their sewer fees for the next 20 years. 

“Real Estate Websites Have Just The Information You Want” Yeah, but is it accurate information and is there anything you should know?  This is a funny article. I will explain why.

Maybe you’re looking to pick up a bargain. Or maybe you want to know how market changes are affecting your home’s value. Real estate sites can help.

Ok…The first site they tell you to go to is Realtor.com to search for listings.  This is true, the site has most listings from around the country, but Realtor.com has come to be a real estate advertising billboard.  Pop-ups and banner ads galore.  This happens to be apart of the National Association of Realtors, which I am a member, so I am not a hater.  I have heard that when you register, you end up getting a fair amount of spam emails. 

If your city or county’s Web site doesn’t list foreclosures, there are alternatives. www.RealtyTrac.com, www.Foreclosures.com and www.BargainNetwork.com list foreclosures and other bargains.

Please see, Are Foreclosures Really A Good Buy.  The best type of foreclosure property to buy is a REO (Real Estate Owned) property.  The property has already gone to the auction block at the courthouse and either no one bought it, or more than likely the bank was the highest bidder to begin with. (This drives people nuts when they do all this preparation to buy the home and the lender doesn’t even give anyone a chance.)  Now the bank or mortgage company puts the property on the market for sale, listed with a Realtor and it is sold as any other home would be, with a standard contract, a due diligence period, and more importantly the ability to inspect it and get your money back due to your ability to back-out based on certain contingencies.  You can bet the bank is motivated to get that property off the books.

If you find a house you like, you’ll need to determine its value. www.Zillow.com’s  Zestimate is the site’s calculation of the value of a house. You can also compare the houses’ price per square foot. (Whoopy)

Ok…..Lets say we want to buy 3157 Kaunaoa St. which is right on the corner of Campbell and Kaunaoa St. in Kapahulu.  We are talking single-wall construction 3bd 2ba with 1,152 sq ft. on the busy road.  Now, I know this home is worth in the mid to high 600’s  without seeing it.  If you were a buyer and wanted to buy this home, you could go to zillow for your “Zestimate” and the value that zillow spits out would be $1.613 million.  Wow!  What a deal at $675,000!

If you plan on buying a home based on zillow or any other computer generated value, please call me.  I will gladly represent the seller in that transaction:)  I would love to look like the greatest agent ever with little effort, or you could call me to represent you and I could save you roughly $1.0 million on the sales price.  Either way my client is happy.

That property is not the only one that is way off for the Zillow “Zestimate”.  The entire neighborhood is valued between $1.45 and $2.5 million. I know of almost no homes in Kapahulu that are worth that much.

Of course, everything has a price. So check out Zillow’s “Make me move” feature. With it you list your home on the site. Then enter the price that you’re willing to accept for your house. Someone might make you an offer! You’re not obligated to accept an offer.

Don’t even get me started on FSBO’s.  I love to represent a Buyer who wants to purchase a FSBO.  I am in a transaction now with one, and lets just say my Buyer is very happy.

I will make it short and sweet for you.  If you decided to play Kobe Bryant in a little one-on-one basketball for a significant amount of money.  Let’s say between $300,000-$1.0 million, who do you think would win?  Probably the more appropriate question would be, “Would you even score a basket against him?”

The point being I am a professional.  I do this for a living.  I practice, practice, and practice, and most FSBO’s do one transaction every 5-7 years, and even if you got the price you wanted, I can guaranty you the rest of the contract would not be tailored in your favor.

The last line says it all:

When buying or selling a house, Web sites are a good starting point. However, no Web site can replace the expertise a real estate agent provides. A real estate agent can help you navigate the buying and selling process.

I just wanted to have a little fun with this one and make a point at the same time. The Internet isn’t the answer to everything, not in a high importance transaction like your biggest asset.

We hear so much about the strength of our luxury market but thought you might like to have some stats to support that…(…just starting to pull numbers and will deliver as I gather)

$5.0M+

In 2007 there were 14 sales over $5.0M.  Just one month into 2008 we have already  43% of that total with 6 sales over $5.0M and 4 others pending in escrow (that would bring it to 71% of total 2007 sales).

$3.0M - $5.0M

In 2007 there were 42 sales between $3.0M - $5.0M; averaging 3.5 sales per month.  In January 2008 we are at par with 3 sold and 3 more pending in escrow.  

I have added the Kahala Associates Luxury Stats for January as well for you to be able to review, and Harvey Shapiro did an analysis of the Waialae/Kahala area that is a good read.

It is that time again. No..I don’t mean tax time.  Market stats time.  So here we are with another set of data to go through.  You can view the full market stats by clicking here.  To view all past market stats and the quarterly stats as well go to The Resource Center.

Feel free to check out the articles from the local news papers by reading, Oahu’s Housing Price Median Still $600,000 in the Honolulu Advertiser, Oahu’s Median Home Resale Price Is Flat In January in the Honolulu Advertiser, and Oahu Homes Sales Continue Slump in the Honolulu Star Bulletin.

Helping sustain home prices is a state economy that continues to grow, albeit at a slower pace, as well as low unemployment, rising personal income, limited new-home construction and demand from out-of-state retirees and investors.

Barring some reason for major population loss on O’ahu, home prices are forecast to remain comparatively stable, with only small declines, if any, said Paul Brewbaker, chief economist at Bank of Hawaii.

On page 4 of 20 the number of SFH and condo sales dropped again this month.  Keep in mind, January sales data is December escrows.  How many times have you wanted to move during the period between Thanksgiving and Christmas.  Not fun!  Though the numbers are lower than the January 2007 numbers for both SFH’s and Condos.

On page 6 of 20 the median sales price for SFH’s is $600,000, down from $610,000 the previous month, but the exact same price as January of 2007.  The median sales price for a condo is $324,000, up from $320,000 in January of 2007.  If you look at the trend for condo sales the past year the floating range is between $320,000 and $330,000 consistently.

On page 7 of 20 the median number of Days-On-Market (DOM) decreased for condos from 47 days to 42 days.  The median number of DOM for SFH’s increased from 51 to 61 days.  These are both very healthy.  That is roughly two months or less.

On page 14 of 20 the inventory of active listings stayed almost the same for SFH’s and condos for this month with 1,876 SFH’s and 2,349 condos actively on the market. This is good.  You would expect to see people putting hteir homes on the market at the same rate and home inventory increasing, due to the slowdown in the number of sales, but this shows that, not only have buyers slowed down, but sellers slowed down.  I call it the seasonal effect.  It is the was the holidays and we are now getting back into the new year.

On page 18 of 20 we have the Months of Inventory Remaining.  This means if we didn’t bring anymore homes on the market, how long would it take to sell all of the properties.  For SFH’s it is 7.8 months and for condos it is 6.7 months.

On page 19 of 20 we see the breakdown by type of property, price range and geographic area.  The $1.0 million plus SFH’s have 15 months of inventory available.  The North Shore alone has 19.4 months of inventory.  Below $1.0 million the inventory is roughly half that or less.  For condos, the $500,000 or higher condo price range has 10.2 months of inventory and the North Shore is king with 53 months of inventory.  There was one condo sale on the North Shore and 53 active listings.

The economist still say we should hold our price valuations.  I will continue to monitor the number of sales and the New Listing Activity to see where we sit with supply and demand. Feel free to read Harvey’s Blog Post on the January Stats.

Harvey Shapiro, research analyst for the Honolulu Board of Realtors, said that if mortgage rates continue to trend downward, it will make financing for those who can qualify much less costly.  Also, the weaker dollar could attract new demand from overseas purchasers, Shapiro said.  Ishii said buyers have the best selection that they have had since August 2006.

Should we start polishing up on our Japanese? How about learning how to speak Canadian?  We have fielded more calls in the last several months from foreign investors looking to buy in Hawaii (US) since the dollar has weakened.  This article regarding a weakening dollar as a gain for foreign invesotrs in the Honolulu Advertiser brought it to my attention to address the issue. 

Australian, Canadian and European currencies have risen sharply in recent months to give real estate investors from those countries their strongest buying power in more than a decade.

In addition, though Japan’s currency has been stronger in recent years, a rise in the yen is making Hawai’i attractive again for Japanese, who historically have been the dominant foreign force in local real estate acquisition.

So if you haven’t already heard the Fed cut rates again for the second time in 8 days, which means you are probably sitting in your home that is being remodeled with no TV, like I am.  Actually, I have a TV, just no cable right now. Thank god for the Internet.

Experts feel the Fed is not done cutting rates yet.  Again, this means short term loans, credit card rates, home equity loans, etc will be lower immediately.  I do believe that long term mortgage rates will still head somewhat lower, due to the poor economic data that will probably come out, thus stocks push lower, in turn helping long term mortgage rates. 

Usually with a Fed rate cut we see stocks recover for a couple of days, causing long-term mortgage rates to worsen, but then the buzz wears off.

Since Fed monetary easing takes about a year to have its full impact on the economy, this will help cushion the growth slowdown but only by late this year and early next year.

The reason the Fed cut rates is:

The Fed said it sees “considerable stress” in the financial markets, as well as deepening in the housing contraction and some softening in the labor markets.

If you haven’t thought about refinancing, now is the time to do so.  Click on the audio icon to hear Rate Cuts May Set Table For Refinancing. Rates are very low right now, so consider taking advantage. Read Harvey Shapiro’s article on the rate cut.

Here are other articles: Fed Makes Second Deep Cut Into Interest Rates

Marketplace Reprt: Another Rate Cut

Is It Time To Refinance?

Once again the newspapers are delivering the foreclosure info for Hawaii again.  At least this time they have the headline right.  Hawaii Foreclosures Rise, But Rank Low Nationally.  Hawaii’s strong economy, coupled with a more conservative mortgage selection process, and price stabilization has led, once again, to Hawaii having one of the lowest foreclosure rates in the country.  Don’t plan on looking for that ultimate good buy in the foreclosure market here.  Not yet. And if your thinking of foreclosures, read Are Foreclosures Really A Good Buy?

To give you an idea of where Hawaii sits with regards to foreclosures:

national figures showing more than 1 percent of all U.S. households were in some stage of foreclosure during the year.

In Hawai’i, only about 0.2 percent of households were in some stage of foreclosure last year. That ranked the state as having the seventh lowest foreclosure rate nationally.

Just thought you might want to see what the Housing Predictor is predicting for the 10 hottest real estate markets.  Do you think Hawaii is on the list?

Yeap! Twice.  Once at #1 (Honolulu) and again at #3 (Maui)  Their prediction is a 6.8% price appreciation for Honolulu.  I think that is a bit of a stretch, but to quote them:

As one of the nation’s top recreation and resort markets, Honolulu, Hawaii has seen housing and condo prices rise, despite slumping markets on the mainland. Fueled by regulatory changes in Japan monetary policy, the Hawaiian market should see an infusion of investors purchasing condos and homes during the year. As a result Honolulu is Housing Predictor’s #1 Hottest Buyers Market in 2008.
The Top 25 with the highest forecast appreciation have the greatest probability of reaching their forecast of the more than 250 local housing markets Housing Predictor forecasts. In 2007 Housing Predictor’s forecasts were 86% correct within a 1 to 2 percent margin