I was searching through the Internet and found this recent video from a Google user.  It is Paul Brewbaker speaking about the Oahu real estate market from October 2008. Not sure who the user is or I would give them credit.

The 2008 Conde Nast Traveler Readers Choice Awards have been announced and the islands themselves scored the best (good coverage) overall against worldwide competitors, scoring “five of the top ten (island) spots,” the magazine reports.

The magazine’s top cities ranking is broken out by region and Honolulu was ranked the No. 7 U.S. city to visit.

Conde Nast’s Top Resorts lists also were broken out by region with Hawaii getting its own top 25 list. It is topped by Four Seasons Resorts - Maui at Wailea at 96.0; Hualalai at 94.5; Lanai, The Lodge at Koele at 92.5, Lanai at Manele Bay at 91.6; and at No. 5 is Halekulani at 90.7.

President Bush is rescinding visa requirements for South Korean citizens, giving Hawai’i’s tourism industry a likely boost.

This is great news. This coupled with the easing of restrictions for Chinese tourists should go a long way in helping boost Hawaii Tourism. 

Hawai’i tourism officials are looking forward to an expected upswing in South Korean tourists in the wake of the much-anticipated announcement this week by President Bush that the visa waiver program will expand in January. Last year, there were 41,869 visitors from South Korea, and tourism officials predict that number will double within two years.

According to the HTA, in 2007 South Korea visitors stayed 11 days on average and spent $217 each per day. Visitors from the Mainland spend about $162 a day.

There was a great article in the Honolulu Advertiser, about the Stryker Project and the history of the Stryker Brigade in Hawaii. To summarize:

The Army in 2001 decided to base a Stryker unit in Hawai’i, and started about $700 million in construction projects, including upgrades that were also needed for non-Stryker troop training. Three Native Hawaiian groups filed a lawsuit in 2004 against the Stryker brigade, claiming it would harm the environment.

In 2006, a federal appeals court ruled that the service had not adequately examined alternative locations outside Hawai’i for the unit, and ordered the Army to do so. Bases in Alaska and Colorado were considered before the Army again chose Hawai’i, saying it was selected primarily because of the ability to meet strategic defense and national security needs in the Pacific.

Now the massive Stryker brigade project, one of the biggest Army efforts in Hawai’i since World War II, is getting back on track after four years of litigation and is a part of the overall $1.5 billion effort to base the brigade here.

Approximately six construction projects related to the Stryker brigade are expected to begin in coming months, employing 1,000 or more workers, officials said. The Schofield-based Stryker brigade, which consists of 328 Stryker vehicles and 4,000 soldiers, is deployed in Iraq and is expected back in Hawai’i around March.

This should definitely help add to our economy here.

Are you curious as to what gas prices are on average here on Oahu versus other areas of the country?  Well the Honolulu Advertiser released an article about Oahu gas prices.

The average price of a gallon of regular gas in Honolulu dropped below $4 today for the first time since May, giving O’ahu drivers an average price of $3.99.

Good news from the home front on a national level, as we see today that the number of home sales increased by more than 7% in August to the highest level in over a year. 

The National Association of Realtors says pending home rose 7.4% from July to August, an unexpected piece of positive news for the battered U.S. housing market.

Most believe that the first sign of a bottom in a housing market is an increased number of sales.  More sales will reduce inventory, thus reducing supply and eventually causing prices to increase.  This is in the general ballpark, and one month of increased sales doesn’t make a turn-around, but we are seeing more signs of increased sales nationally.

How Act 228 was passed is beyond me.  This bill is very flawed and will cause the process of obtaining building permits to slow down even more.  This was a great article by the way.

Here is the general info on this;

Act 228, which took effect in July after little public input, requires that property owners submit black-and-white archival prints to the State Historic Preservation Division of the Department of Land and Natural Resources before county building permits can be issued for work on buildings at least 50 years old.

The article says this could effect roughly 100,000 homes state-wide. 

The idea was to preserve Hawaii’s historic architecture, which is “disappearing at and alarming rate.”  The problem is that probably 99% of homes that would qualify in Hawaii  are single wall construction homes and not of very historic significance.  The law, is trying to preserve a select few historic homes by effecting a huge number of homes that should not be considered historic, in the meantime severely slowing the process down for improving some of these very homes that probably need improving to beautify the neighborhood.

And here is a shocker:

A factor in the difficult situation is chronic short staffing at the Historic Preservation Division and the city Department of Planning and Permitting, neither of which sought the new photo requirements.

How will it effect values of homes 50 years old or more?  Imagine you are a buyer and you really like a home that was built over 50 years ago, but it clearly needs some attention.  Will you be willing to buy that home, knowing you will have a long road and battle ahead? or will you forgoe that home to purchase one that will be less of a headache?

Coldwell Banker is unveiling it’s “10 day sales event” that will publicize sales reductions of up to 10 percent on its listings from Oct. 10 to Oct. 19. Sellers have the option of participating in the promotion.  This is being done to “boost the sagging U.S. home sales market.”

Ok.  What does this mean.  Coldwell Banker agents will go to their sellers and ask them to reduce the price on their home by 10% for 10 days.  If they are doing that, then the home is most likely over-priced to begin with. 

This is not much more than a marketing gimmick.  I say this, because it is the homeowner, not Coldwell Banker, who has to agree to a price reduction, or essentially take less money for their home in a sale.   If it won’t sell to begin with, it is probably over-priced.  As a seller, would you be willing to walk away from 10% of the money you deserve from your home, just to participate in Coldwell’s program to “boost the sagging home sales market” if it is already priced right? 

What benefit would the seller get out of it?  They will get a pat on the back a thanks from Coldwell Banker and a chance to say they participated in this program. That isn’t much incentive to a seller to lose 10% in a sale. 

Just because the price would be reduced by 10% doesn’t mean it will become a good buy either. 

The article says Coldwell Banker is, “Swiping a page from the car dealership playbook.” the only problem is Coldwell doesn’t own the cars, so it isn’t Coldwell’s decision to be able to sell a home below market value like the car dealers claim.  It is the seller’s decision, so it becomes little more than a marketing ploy.

There’s also a potential downside. For instance, imagine someone with a house listed at $250,000 drops the price by 10 percent, or $25,000, during the 10-day promotion but gets no offers and then reverts to the original list price.

The seller would have a hard time justifying the higher price if an interested buyer came along a month later and offered $225,000.

Bank of America struck a deal with regulators that might help the economy. It’s the boldest step by any bank to address the ongoing foreclosure crisis.

Facing a lawsuit over deceptive mortgage practices, a Bank of America subsidiary will modify tens of thousands of loans to help keep people in 11 states from losing their homes. Borrowers stuck with Countrywide Financial mortgages that they can’t afford could see their interest rates reduced or have the loan principal cut.  Bank of America purchased Countrywide in June, at the same time Illinois and California sued Countrywide.

Bank of America agreed to provide up to $8.4 billion in interest rate and principal reductions to around 400,000 people in trouble of losing their homes.

A plan announced today by Bank of America will be the most aggressive foreclosure prevention effort ever undertaken by a U.S. bank.

The program, scheduled to start in December, will be open to distressed borrowers who signed up with Countrywide Financial between January 1, 2004 and December 31, 2007.

Are cover letters attached with offers a good idea?

Before this past week, I would have said yes.  Now, after receiving two cover letters from the same agent (one on the initial offer and one on the counter offer) on a property I have listed, I would have to say, “Maybe”.

I do feel it is important to have your agent write a cover letter and attach it to your offer.  A contract simply is a bunch of terms and conditions for which it has no face and a very limited story.  There is no personality to a contract and they look pretty much the same from contract to contract. 

What will make you stand out from one contract to the next is to personalize it.  Give a meaning to your offer, as well as accent your fine features (not your looks). 

What I mean by that is, if you have 800 FICO scores tell the your agent should tell the seller, because you are well qualified.  If you are doing a full documentation loan, the seller should know.  Your agent should tell them how much you like their home, how you want to start a family there and take care of the home with the same care and detail as they did. These are all positive things.  Also, justify your price by listing comparable properties that have sold and tell them how you feel they were comparable (don’t exaggerate or lie. You lose credibility right off the bat if so.)

I have yet to come across a seller who doesn’t have a personal attachment to their home, so if you tell them you like their home and can realistically justify your price, how do you think they will receive your offer?  They may be willing to give your offer first choice over another, or they may even be willing to give up more if they have a good connection.

Now, for the reason I am writing this post.  When should your Realtor not attach a cover letter?

When your agentcompletely rips the Seller’s home and tells the seller how bad their home is and how much work needs to be done, in writing, before they even have a chance to look at your offer.  

I don’t care what kind of offer you are coming in with, the seller will not be feeling good about doing a transaction with you when your agent rips their home.  My first thought is “Why are they trying to buy this home if you think there are so many things wrong with it.” Which is the same thing the seller says.  The real reason of course is because the agent is trying to justify either their clients low-ball offer, or hoping they can convince the seller to come down by pointing out all the problems with their home.  Not a good idea. 

The focus for the seller immediately goes away from the ultimate goal, which is to get the home sold and turns into a personal battle.  It focuses more on the personal insults that the seller is feeling.

The second, no no, is telling the seller how terrible the market is, how it will get worse and how they should be lucky to have you as a buyer.  Again, wrong ego to stroke.  If the market is so bad and getting worse, why is this buyer trying to buy now.  You come off looking like you are trying to play games, which again goes back to personal insults.  No one likes being lied to and if a seller thinks you are misleading them upfront, you will lose credibility.  Keep the negative stuff out of the cover letter, and stay positive.