The Honolulu Board of REALTORS® released resale figures for the month of September.  The market has slowed and prices in some areas have pulled back some, but areas such as in town Honolulu (3.5%), Waialae-Kahala (7%) and Pearl City(1.9%) are all up in price year-to-date.

If you would like to view September’s full 20 page reports click on September Stats. You can view all previous months and quarterly stat reports at THE Resource Center.

During September sales of 215 single-family homes and 305 condominiums were reported through the Board’s MLS, decreases of 15.7 percent for single family homes and 26.3 percent for condominiums, compared to the same month last year. This brings total single-family home sales on Oahu to 2,134 for the first nine months of 2008, a decrease of 25.8 percent over the same time period one year ago. Total condominium sales through September were 3,173, a 27.0 percent decrease from last year. The median prices paid for Oahu properties in the first nine months of 2008 were $625,000 and $325,000, respectively, a decrease of 3.5 percent for single-family homes from the same time period in 2007 and no change in price for condominiums. The total dollar sales volume generated in the housing market for the first nine months of this year was $2.959 billion, a decrease of 25.1 percent, or $994 million, compared to the $3.953 billion produced one year ago.

The months of inventory remaining for SFH’s was 8.1 months, down from the previous month of 8.4 months.  The months of inventory remaining for condos was 7.7 months, up from 7.5 the month earlier.  These are still pretty balanced numbers.

“It appears that the Oahu housing market is reacting to the economic crisis that has been affecting financial markets worldwide,” added Harvey Shapiro, Research Economist at the Honolulu Board of REALTORS®

Here are the latest articles from the local newspapers:
Oahu Home Prices Drop from the Star Bulletin. 
Hawaii Real Estate Market Seen As Stable- Star Bulletin 
Oahu Median Home Prices Drop - Honolulu Advertiser

CNBC posted information from a report released by the US Department of Labor’s Bureau of Labor Statistics about the 10 states with the highest unemployment. Where is Hawaii in regards to these states? Well, Hawaii has the 8th lowest unemployment at 4.2%

1. Michigan 8.9%
2. Rhode Island 8.5%
3. California 7.7%
4. Mississippi 7.7%
5. South Carolina 7.6%

43. Hawaii 4.2%

Here is another reason we love living here in Hawaii.  This photo of jeff was taken by a local photographer while a buddy of mine and I were surfing on the south shore.   Some of the best times here are surfing south shore with the Honolulu/Waikiki cityscape in the foreground and the mountains in the background.

The recent article in the Star Bulletin says that the Hawaii Real Estate Market Is Seen AS Stable.

Hawaii will not experience the real estate meltdown as seen on the mainland, but despite more positive market fundamentals, sales are likely to continue slowing and average prices are likely to remain flat though year’s end. However, there still will be some winners in real estate in 2008. Those who weed through neighborhoods to identify good values likely will come out ahead.

What’s that? Good buys are to be had?

Hawaii’s low rate of foreclosure and stable mortgage industry insulated it to some degree from the housing troubles on the mainland, Brewbaker said.

Just as we rejoiced the rapid drop in interest rates a few weeks ago, and I said  it was time to refinance or lock in that loan rate, we now see that mortgage rates have climbed to the highest rates in a month.  All the turmoil that occurred recently has really caused rates to fluctuate wildly.

This isn’t to say that rates are bad, because historically they are very good, but with all that is going on, you should keep a close eye on rates when purchasing or refinancing as these kind of fluctuations can cost or save you a couple of hundred dollars.

How do you make up for lost seating capacity when Aloha Airlines went out of business?  At some point some competitor is going to have to step in an add seating capacity to make up for what was lost.  As published in the PBN, Hawaiian Airlines will add 110 interisland flights per week.  This comes on the heels that Go! Airlines recently saw an 11% increase in traffic from a year ago.

The new flights will be from Honolulu to Lihue, Kauai (40 more per week); Kahului, Maui (27 more per week); Kona on the Big Island (25 more per week); and Hilo on the Big Island (18 more per week). The flights will be added primarily during high-travel times, especially for morning and afternoon commutes.

The 717s will allow Hawaiian to replace Boeing 767-300s currently being used for inter-island operations.

The question is, does this add capacity, or is it just replacing older jets with new smaller capacity, more efficient jets that will run more frequently?  My thoughts would be a little bit of both.  At least you will have more options for flying inter-island.

Good news! A recent article in Pacific Business News shows that California’s number of months of remaining inventory and the days on market have dropped significantly as compared with August 2007.  Is the bottom in view? Looks like it.  California is usually a good indicator of what will happen in Hawaii a few months later. (6 months to a year).

The unsold inventory index for existing, single-family homes in California during August dropped to 6.7 months from 10.6 months for the same period a year ago, according to a report Thursday by the California Association of Realtors.

The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

The Realtors’ organization said the median number of days it took to sell a single-family home was 47.3 days in August, compared with 54.7 days in August 2007.

The August report showed sales were up 56.7 percent statewide while the median home price fell 40.5 percent.

I have been saying for months, look for the number of sales to increase and inventory to deminish as a sign of an improving real estate market, esp. in the hardest hit areas. California typically sets the trend for Hawaii and was one of the hardest hit areas.

The $300 billion Mortgage Aid Program Launches. 

The government kicked off a program Wednesday that aims to prevent foreclosures by letting an estimated 400,000 troubled homeowners swap their mortgages for more affordable loans.  Executives from Citigroup (C, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and Wells Fargo (WFC, Fortune 500) told lawmakers last month they have been hiring additional workers to put the new program in place.

The good news is some of the lenders are on board.  This will be the key.  How much will lenders cooperate?  Also, if someone is headed for trouble, but not yet there, are they going to have to wait until they are in trouble to be helped?  I am still not sure how this will pan out.  Will everyone be on board?  What happens to the investors who own the mortgage backed securities? If you need help this may become an option for you.

When you think of Donald Trump, you think “real estate Guru.”  Well the Donald has spoken, and he spoke on ABC’s Goodmorning America.  If you were going to listen to anyone regarding real estate, he would be it.  You should definitely view this interview.

This is a great time to buy. Now is the time to start looking, and start buying. Over the course of the next year, this is going to be the time to buy. If you don’t do it, you are going to be very, very dissapointed in the years to come. This is the bottom of the market. It may go down a little, or it may not, but this is about the bottom of the market.

 Japanese Billionaire, Gensiro Kawamoto, is in the news again.  (Japanese Billionaire’s Kahala Homes Decried)

If you haven’t heard about this ongoing story, here is a background to it.

In March of 2007, Japanese real estate mogul Genshiro Kawamoto handed over three of his many multimillion-dollar homes in Oahu’s priciest neighborhood to homeless and low-income Native Hawaiian families on Thursday.  Kawamoto plans to open eight of his 22 Kahala neighborhood homes to needy Hawaiian families. He says they will be able to stay in the homes for up to 10 years. He added it showed more dedication to helping Hawaii’s homeless than just handing out cash. Kawamoto laughed when asked if he was concerned about losing money on the effort, saying, “This is pocket money for me.”

According to the Wikipedia entry about Kawamoto:

Kawamoto owns dozens of office buildings in Tokyounder the name Marugen and has been buying and selling real estate in Hawaiʻi and California since the 1980s, and has been accused of making money by driving real estate values down by various methods without respecting the current owners, buying them out and then selling them when the price increased.

Here is what doesn’t make sense to me,  he says he wants to help Hawaii’s homeless and low income native Hawaiians.  That’s fine and dandy, but he is only helping a select few. Why would you hand over the keys to a $5 million dollar home to one family?  If he really wants to maximize his benefit, this isn’t the way, and lets face it, he didn’t become a billionaire by being an idiot, but this is a pretty dumb way of helping people.

Here’s the thing.  Let’s say he sells ONE home for $5 million, goes and buys a vacant lot to build an apartment complex or he buys already built apartment complexes somewhere on this island.  Heck, he could even buy a few single family homes and do better than what he is doing now.  Give them free rent and have them pay their own utilities.  Would he not be benefiting more families?  $5 million should be able to buy you a 12-25 unit apartment complex.   Now multiply that by 8, and you really start to make a difference. 

This whole front that he wants to make a difference to people doesn’t add up.  On top of not maximizing his ability to make a difference, he is running these homes in the nicest neighborhood on the island into the ground where he does no maintenance and they are clearly an eye-sore.  He is irritating neighbors by doing so, and just drive by some of the houses to see the the condition and the picnic tables and weekend partying that goes on in the front yard. This has to be the worst idea I have ever seen for  ”trying to make a difference.”

Want to make a real difference, do what’s right for the neighborhood and for the people that need help.  After all, “It is just pocket money.”

Someone should approach him to invest in low-income housing which the state really is pushing for, and see what he is willing to do.