‘There’s A Correction Going On’: Hawaii
The Honolulu Advertiser has this update from Hawaii. “The housing market trend of higher prices but fewer sales continued on Maui, the Big Island and Kaua’i last month. There were 30 percent fewer single-family home sales on the Valley Isle: 88 in July compared with 125 a year earlier.”
“Maui condominium sales fell even further, dropping 66 percent to 78 in July from 228 a year earlier. The 78 July sales were the fewest in any month since January 2002, according to the Realtors Association of Maui. The median Maui condo price last month was $525,000, which was off the record $645,000 set in June but up from $380,000 in July 2005.”
“Keone Ball, Realtors Association of Maui president, said July sales reflect what he predicts will be a low point for the year. ‘A couple of months ago, the market was just dead,’ he said, referring to sales agreements that typically take two months to close and would be recorded as completed sales in July.”
“For July, however, Maui’s higher prices and fewer sales for homes largely mirrored activity on the Big Island and Kaua’i. A big swing occurred in Big Island condo sales, which fell 63 percent. The number of single-family homes sold in July on the Big Island declined 42 percent from a year earlier.”
“On Kaua’i, condo sales declined 46 percenth, compared with a year earlier. Kaua’i single-family sales were down 38 percent.”
“Ball said prices more recently are softening and spurring more sales, a trend he expects to show up in September and October sale statistics. ‘There’s a correction going on,’ he said, noting that he’s witnessed deals where sellers accept offers $100,000 below asking price. ‘There’s price reductions all over the place.’”
Woohoo! Houses in Kona for everyone!!!
I talked to a good friend on Oahu the other day. Boy is he in a good mood. He runs a business that takes care of the foreclosed properties after the homeowners are booted. He was making a bundle in the early to mid-90’s after the Japanese investors bailed and left the Island RE upsidedown. But, of course, the last several years of boom have been lean for him. Now he’s chompin’ at the bit and says the fax machine is already starting to hum with new orders. I guess the toxic loans were out of control over there as well, and that’s just great news for him.
nnvmtgbrkr, can you ask your friend about the Portlock area? They built so many new condos there that were snapped up by speculators in 2005 - I am wondering if this area is holding it’s own or going down?
I live in the Hawaii Kai, Ohau, area and drove by one of those new condos in the Portlock area about a week ago.
Much to my surprise, driving by one of those brand new condos I saw something very odd. One of the ground level units next to the traffic light had sheets for window coverings. The sheets were covering the windows and the sliding doors. I saw someone shadow through the curtian/sheets. I commented to a RE lawyer friend who was visiting from San Diego if that was unusual.
She said that there are Home Owner Assosiation rules against that and in San Diego. The folks who use sheets for curtians can only do that for 60 days in San Diego.
I thought the comment rather odd in light of the fact that we were looking at 600K to 800K condos in Hawaii. The point that she was not concerned about the state of fininances of the owner who was using sheets for curtians was a bit perplexing, espically considering that there is a ROSS store in Hawaii Kai where you can by curtians for under 10$.
Interesting. I’m looking for a short term condo rental in Hawaii Kai now but I am afraid to send any reservation deposit for fear that by the time we get there our rental landlord will have gone bankrupt and I won’t know where my deposit will have gone. I’m not sure when to make a commitment - I don’t want to wait too long or I may not find anything in the spring but I have months to go yet. Anyone with experience have any advice?
Condos on Portlock????
I remember the Goldman brothers and their estate there…used to be a very exclusive road.
The sheets and hefty bags in windows and on skylights are a sign the the ‘Oakies’ from Bakersfield have moved further west and are now condo squatters in Hawaii.Wait til their first barbeque. hehehehehehe
There’s a new book out, “The Coconuts of Wrath”
nnvmtgbrkr,
How’d he get started in a business like that , and what does it entail. Sounds like a good idea for budding entrepeneurs in other areas, along with going to school for Bankruptcy law , buying a car-repo outfit , or maybe , down the road , buying a store to sell small firearms.
The way I understand it, after the homeowner is evicted he goes in and inspects the property, particularly for it being cannilbalized, takes pics and makes a report for the lender. If there was any damaged sustained to the property, then he becomes basically the general contractor, either fixing it up himself or sub-contracting it out. After that, he maitains the property (mow lawn, check sprinkler sytems, maintain pool, ect) because it sometimes take several months to roll these properties.(I know he told me he took care of some properties for over a year. It was a set price per month to take care of it, like $50 per month, but truthfully I forget) I remember him telling me in the mid-90’s he had so many accounts going at the same time that he had over 20 full-time employess cutting lawns, taking pics, re-painting, ect.
I don’t know exactly how he got into it, or how he made his contacts to the lenders that give him the business.
My Father In Law did this in the 90’s in Ventura, Santa Barabara and Kern Counties. Did very well in 90-97. Then business got real tough.
I’m sure every idiot with a surfboard bought a house. Yahoo!
Scavanger industries (BK lawyers, brokers, etc) are going to be a big growth area for the next three years…
Anyone catch Donald Trump on High Worth on CNBC over the weekend ?
I saw him, he sounded a little bearish to me. Shaking his finger at “Mr. Ben” about raising interest rates too high and all.
The median Maui condo price last month was $525,000, which was off the record $645,000 set in June but up from $380,000 in July 2005.”
What the… Huh? Do I read correctly a $120k drop in condo prices in 1 month? Or is that a typo?
The figures cited sound like three snapshots in time of a parabolic price blowout followed by a vertical dive to the ground below.
Woohoo! is right, Greenlander. We are planning on spending a few months in Oahu next year. If the prices drop enough - we may even buy. Still, I think I may have to wait until 2008 before prices get to a “normal” level.
Just be patient! It’s coming to you… 2008 will be a great buyer’s market.
Why spend time on Oahu, unless you like LA in the tropics. There’s something altogether wrong about stuffing over a million people on a small island in the middle of the Pacific. Try Maui or Kauai.
My son is a gymnast and has regionals on Oahu, also we have many friends there. Funny you should mention LA in the tropics. The first time we took my 7 yr old there from LA, we were heading towards the hotel at rush hour and were going through the industrial part of town and my son was looking around and said, “I know we just spent 5 hours on a plane but are you sure we are not still in LA?”
I went to school on Oahu, and got to live on all the islands…Kauai is wonderful (or was), but my favorite is the Big Island.
Honolulu/Waikiki is like a Princess cruise ship landed on the Vegas strip.
I’ve got three words that are the inarguable reason for going to Oahu: Seven Mile Miracle.
Parden my ignorance but what is Seven Mile Miracle?
North Shore - some of the best surfing in the world.
Gotcha.
Well… What do they expect? I mean , didn’t anyone tell them , (as we here know from this morning’s entry) that Florida is actually “paradise”, not Hawaii.
How much for a U-haul truck from Maui to Orlando ?
They paved paradise, to put up a parking lot.
and that’s w Japan perking up- lots of $ from Japan in HI
Last time there were lots of Japanese Yen in HI, a crash was soon to follow…
Made first visit to Maui in March. Loved it. Lots of building everywhere. We were very amused (and a little sadden) by hotel staffer telling us we should get a new condo while we could. She and her fiance had “bought” three already and were looking at a fourth.
ot but worth reading
the bancuptcy boom is back
http://immobilienblasen.blogspot.com/2006/08/bankruptcy-boom-is-back.html
“There were 30 percent fewer single-family home sales on the Valley Isle: 88 in July compared with 125 a year earlier.”
Considering there is no national real estate market, it is truly amazing how many different places that 30 percent drop in YOY sales figure has recently appeared in the press.
We are going …. Nation Wide… No there is no National Housing Bubble.
Thanks for the help Ben.
Hello everyone. I sold my place on maui in 05 and warned everyone i knew that they were getting in over their heads and was basically laughed off the island. all my neighbors had homes in CA, or elsewhere and were busy buying and building their retirement homes with the idea that they would sell their mainland properties years down the road.
Most of my neighbors owned 2 or more properties on maui as appraisals got more and more inflated.
Just yesterday i talkd to a friend who has a 8 acre botnical garden for sale at 2.5 mil, they got an offer for 2.2mil a couple of months ago and accepted it. It was suppose to close next week, but the buyer want to negotiate somemore and offered 1.7 mil. This property was bought in 1990 for 2mil. i hoped my friend would negotiate as buyers are really hard to get for that kind of a place but he was upset at the lower offer just before closing understandably.
the buyers of my propery may already be in trouble as i heard from the grapewine.
This couple borrowed heavily from their inflated rural illinois flower farm and had a “friendly” apprasier on maui give them an appraisal value 20% higher than my asking price to make the deal work. I told them in 05 that they better sell their farm quickly and they also laughed at my innocence. They said they will sell it 3 or 4 years ” they way things are going, we`ll get a good price then”.
Everyone was a massage therapist or a realtor, or both. IT was insane, everyconversation was about real estate. from 2000 prices in my neighborhood were up 200%. we still have friends there that are completley in denial . after reading patrick.net that i sent them, they said they will sell next year. greed has got a hold of them too.
I sold my place on maui in 05 and warned everyone i knew that they were getting in over their heads and was basically laughed off the island.
I think everyone on this blog has been laughed at at some point by friends and/or relatives. You can rest assured that when it all falls apart on them - not one of them will remember you warned them, or thank you, or apologize.
My family at least listens to me… before ripping apart any logic I’ve said. Last weekend at a family dinner (12 people, includes cousins) they didn’t rip, they listened… Its changing folks.
I’ve posted before how I know a large number of people who have already bought their retirement home but still earn their income in California… One way or the other, one (or both) markets will get whacked. Some of these people can kiss their retirement goodbye.
I like some of these “unintentional speculators,” but they had to buy their retirement home before they were priced out.
Someone else put it better… why weren’t the realtors asking “what happens when everyone gets priced out?”
Neil
How crazy is that? Buying their retirement home meant they didn’t really need it yet and could afford to wait until housing was down. Buying their retirement home also meant taking up two homes and driving up the cost of buying when they really only needed one and leaving some young couple with children unable to afford any home for their family. That is just plain selfish.
“Keone Ball, Realtors Association of Maui president, said July sales reflect what he predicts will be a low point for the year. ”
Bullsh!t. I watch the Pukalani, Mau MLS listings on a weekly basis. Inventory has steadily increased, and the percentage of homes under contract has steadily decreased. Many of the same homes just sit there, week after week, month after month.
Most of the homes in Pukalani that DO go under contract are upper-end homes, the ones I can just tell are being sold to haoles as second or retirement homes. As for the natives, I don’t understand how they can afford ANYTHING.
And I wouldn’t put much stock in the July 06 YOY condo comparisons. Upper-end condos on Maui are EXTREMELY expensive.
Pukalani??? Those of us that have lived here for a while can remember when Pukalani was a pineapple field. And there are no high end homes there. Half acre and an ohana. While some of the homes are on the golf course (high end?) Pukalani is where many local people live and have lived since tha begining. In fact Pukalani was one of the first subdivisions Upcountry. And lets not forget that Dowling has added another 100+ lots and soon to be shopping center on the other side of the gulch. If you are looking for high end Upcountry start at Kula 200 and head south. Pukalani is to Maui like Compton is to LA.
I feel for the Hawaiian natives that are being built out. Your mention of what used to be a pineapple field reminds me of growing up in California when it used to be all orchards and agriculture. Just beautiful. All gone now.
Just an FYI but the HousingTracker is now located at housingtracker.net. It also uses census data. Take a look. I think you will be surprised and pleased at how much more detail there is.
HOORAY! Awesome! VirginiaBeach/Norfolk is looking really good! Kudos kudos kudos! Real data now! Hooray!
The 1week % change in inventory and median on the front page is great.
Currently, 3 of the 55 metros tracked has increased inventory over last week.
And, 49 of 55 have no change/decrease in median over last week.
He He He
Hmm. The inventory numbers on the new site have really spiked. 90K inventory in Miami? 96K inventory in Atlanta? Yikes!
I hate to say this …. but they are not making any more land ….in Hawaii.
Nope, Volcanos are just creating more LAND!
Not true, actually. They get a few hundred square meters added yearly due to the lava flows.
Not quite. While Pele builds more land on Hawaii every day we are an losing land due to erosion on all the other islands. One of the places I dive at has WW2 pillboxes in 10 ft of water. In 1942 they were 100 ft back on the beach. Further out there are the remains of railroad tracks. Hawaii island may be getting bigger but all the others are shrinking.
They have new technology to fill in the erosion areas now. There is a guy in Dubai who actually makes buildable land out of the ocean. Perhaps, if it gets bad enough, the gov. will do something about it.
“Call a place paradise, kiss it goodbye.”
For anyone who knows the islands well, which one is the least expensive and which one is the most kid friendly (I homeschool so schools are of little interest) as far as things to do for middleschoolers. Since we are going to be there for a while, we might just go to some other islands to check them out.
the Big Island east side
In answer to your earlier question about condos,
Use VRBO (vacation rental by owner) and rent a house or cottage in a more rural area. If you are interested in the Big Island let me know. Around here nice vacation rentals with personal touches run from $225/wk to $2000/mo. Ocean view and walk to the beach. Very little is selling here (one house in 2006, 6 on market) and I doubt there will be any foreclosures for at least 8-12 months. Most owners live here 6 or more months per year.
My wife and I stayed at the Mauna Lani on the Kona coast a couple years ago. We loved the diversity of the big island. Lava fields, Rain forests, lush pastures, snow capped mountains. Forget Florida, we thought the big island was the closest place to paradise. We plan on visiting on a regular basis.
Mahalo!
Windward side of the Big Island is the cheapest statewide. 2bd. leasehold condos starting at $52,500. House lots starting at $12,000; http://www.hawaiiinformation.com/REsearch/
for RE lisitngs. Sounds good right? Well two years ago, most of these houselots were around $4,000. Right now there is over 2,600 lots for sale in Puna with only 1% of the inventory under contract.
Beware! Life is very expensive there and wages are very low. Check out: https://www.hirenethawaii.com/default.asp
for jobs/wages.
I should clarify: 503 land listings under $30,000. The cheapest lots are lava lots from the 1990s eruption. Substandard roads, catchment water, electrical hook up is extra. Schools rank among the lowest in the nation. Ditto health care. It’s not for everyone, but the ones who get it, really get it.
$4000 lava lots have no electricity, no water (You catch rain from your roof and save it up),no dirt (just lava), many miles of lava road to anything, and your neighbors are redneck locals who sell speed or grow weed for a living. Great place to raise kids
Thank you everybody, I really appreciate your input.
If you are looking for the least expensive and decent, don’t even think about the island of Oahu. There are places in Oahu that still inexpensive like Waimanalo, Makaha or Maili but you need more than a pitbull to guard your house.
I would say the Big Island. Maybe Kona or Hilo area. Puna district is cheap but is a high crime area. Aloha does not exist there.
Thanks Ray.
Total manic behavior here. And yes, many in denile here too.(who can’t do second grade math) Sad to say, I am now seeing friends who didn’t take the warning, now beginning to get in trouble.
It seems the Japanese real estate cycle is 180 degrees out of phase with the US Cycle, finally having bottomed out after a 15 year decline and now starting to show gradual appreciation. When Hawaii bottoms out 4-6 years from now there might be some well off Japanese investors with real equity. Does anybody have a prediction about the next boom in Hawaii?
Does anybody have a prediction about the next boom in Hawaii?
1. When the Honolulu Board of Realtors start publishing the monthly sales statistics for each region again. The last publication was last June of this year.
2. When all the condos that are currently being built are sold. It may take them years based on the current sales rate.
3. When David Lereah and David Shapiro (”Hawaii real estate expert”) will be called the “real estate junkies”.
Based on the above assumption, it will probably take about 3-4 years.
Rent a 500k house for 1200/mo and check the area out. Most parents home school or private school. Traditional health care is not up to mainland standards by far, but alternative practitioners are everywhere. It is rural America with catchment, pumps, septic. I am grateful to have on-grid electric and funky wireless, cell phones don’t work outside Hilo and Kona.
easthawaii
Where do you go or who do you call to find rentals on the Big Island? ( I am interested in the west coast. ) What areas do YOU like?