‘Downward Price Adjustments’: Hawaii
The Star Bulletin reports from Hawaii. “Median home prices on the Big Island, saw a 14 percent price drop (from) a year ago. On all the neighbor islands, much like Oahu, the pace of home sales declined dramatically, reflecting a deceleration in the market during August.”
“On the Big Island: Only 169 homes were sold in August, compared to 256 at the same time last year. On Kauai: Sales dropped to 35 in August compared to 56 at the same time last year. On Maui: Sales fell to 95 compared to 129 in August 2005.”
“‘Whether the market turns, whether up or down, resort areas are always the ones to feel it first,’ said broker Dana Kenny in Hilo. ‘The market has slowed here, and you’re seeing some price adjustment.’”
The Honolulu Advertiser. “Sales of previously owned Neighbor Island homes fell sharply in August as demand continued to weaken. Maui’s condominium market saw the greatest slump with 66 sales, down 65 percent from 187 in August 2005. There were 95 Maui single-family home sales in August, down 26 percent from 129 a year earlier.”
“On Kaua’i there were 35 single-family homes sold sales, down 38 percent from 56 in the same comparable period. There were 29 Kaua’i condos sold, down 52 percent from 60 in the same period.”
“In North Kona district, there were 145 vacant lots sold in August, but was that a fraction of the 597 that sold a year ago. A rush to buy lots in Puna district has lost steam, 88 lots sold last month compared to 377 in August 2005. The same thing happened in Kau district, which saw 124 lots sell in August 2005 but only 24 last month.”
“The pace of sales in Oahu’s residential real estate market declined dramatically in August. The number of houses sold fell 22.8 percent from the year-earlier. Condominium sales also declined 30.2 percent last month.”
“‘We had an exceptionally long period of expansion — more than eight years starting from the second quarter of 1997 through the third quarter of last year. Historically, previous ‘up’ phases in Oahu real estate cycles lasted no longer than five years before normal conditions were restored,’ said Harvey Shapiro, research economist at the Board of Realtors.”
“While there’s no sign of an impending bubble burst in Oahu’s housing market, air is slowly seeping out of yesterday’s hottest markets such as Kahala, Hawaii Kai and Kailua.”
“‘We’re seeing downward price adjustments in some of the markets that led this cycle’s acceleration,’ said Scott Higashi, VP for Prudential.”
“The median price paid for a single-family home in Waialae-Kahala dropped 12.5 percent in the three months that ended Aug. 31 from the same period a year earlier. Oahu’s other most-popular neighborhoods also showed significant declines in prices, with Kailua experiencing a 6.8 percent downturn, Hawaii Kai falling 4.6 percent and the North Shore beginning to flatten, Higashi said.”
A reminder from the past:
‘Annette L. Nahinu has put her 5.5-acre property up for sale at an asking price of $3 million. Nahinu has had other opportunities to sell before, particularly back in the heyday of Japanese investment in the Islands, when Nahinu negotiated a $7.8 million cash payment.’
‘When Japan’s financial bubble burst, Nahinu ended up with only the $400,000 down payment. ‘I should have sold back then,’ Nahinu said.’
Yeah, kinda sucks when you only get 400K of free money.
- “While there’s no sign of an impending bubble burst in Oahu’s housing market, air is slowly seeping out of yesterday’s hottest markets such as Kahala, Hawaii Kai and Kailua.”
- God Bless Hawaii ! NO Bubble there.
So poor Ms. Kahinu wants only $3 million plus $504,000 in lease payments, for what is essentially just a 7-year lease with no residual guarantees. 92 years old or not, she deserves what she is going to get. There seems to be no age at which greed or bad judgment expire.
Ben: Love your google ads - about as slimey as they get.
“You too can make money sitting on your ass at home doing nothing” (ok, I added a bit)
very constructive, thanks
Actually, I’ve even managed to learn something from the Google ads (that’s in addition to everything I’ve learned from all the great bloggers here). The other day there was an ad from a group of contractors who do home improvements, new additions, etc. I clicked on the ad and found that they install solar energy systems, among other things. Since I’m moving to LV, I’ve been curious about why solar is not used there. Well, the contractor’s website had a link to a study that answered that question.
Actually, I see that that ad is at the top of my screen again right now. “Renovate: Don’t Relocate”
I’m happy I encouraged my ex-girlfriend in Los Angeles to sell her lease condo in Hawaii in the summer of 2005. She put the proceeds in CDs. I chatted with her a month ago and she is still out of Real Estate. She came close to buying in Myrtle Beach and in Texas though!
I posted this on another thread a few weeks back, but it is so right for this article. I got this in an email a a couple of weeks ago.
My friend in Hawaii has finally sold her house. She came down 7 times on the price and took over a year. Nice place but she says prices have plummeted!
“‘We had an exceptionally long period of expansion — more than eight years starting from the second quarter of 1997 through the third quarter of last year. Historically, previous ‘up’ phases in Oahu real estate cycles lasted no longer than five years before normal conditions were restored,’ said Harvey Shapiro, research economist at the Board of Realtors.”
According to Shapiro we are approaching or already to normal conditions. Buy now before the price will go up again. Is there any concience left with this so called economist? Or he just have a selective amnesia? I’ve been to several housing bubbles in Hawaii and yet this guy still trying to put a positive spin just to protect his organization. Many innocent people who listened to people like Shapiro lost their hard-earned money when the bubble created by the Japanese burst.
Mr. Shapiro, if you reading this blog, please tell us the truth just for the sake of the uninformed buyers. In addition, can you publish the details of home sales/price statistics again? I missed those stats, it’s is easier to read the data than listening to you. Or are you hiding anything?
I track inventory in Kauai, and its up over 50% from the beginning of the
year, so this decline in sales is even bigger when taking that into account.
Wages are a joke and most of the homes are shacks compared to the
mainland (nothing wrong with shacks, just not worth that much). Lots
of boomers losing their asses on the islands right now from their “investments” made over the last few years.
a friend on maui had a 8 acre botanical garden with small house on it for sale now for over 18 months. asking 2.6 million. got an offer for 2.4 a couple of months ago. Closing was 2 weeks ago, but a week before closing the buyer came back with a 1.7mil offer.
my friend declined the offer because he got angry, but im afraid there wont be many offers even at that price in the near future.
the property is not sub dividable and the garden sucks about 5k/month to
barely maintain.
this place was bought in 1990 for 2mil.
In Seattle I know a whole set of ‘ex-Hawaiians’ primarily in the medical field, all who moved out there for lifestyle and moved back within 5 years because of the lack of any indoor culture, and difficulty finding reliable employees for their business/clinic, etc. I wonder how many retirees will have second thoughts, especially as flight prices increase and it’s too expensive for the grandkids to visit as often as before.
its called island fever.
i loved it there except for all the mainland people that wanted to bring the mainland with them. they were always complaining about what was not available in hawaii.
when i sold my place and moved to asia, my neighbors reacted with shock. one even said “youll never be able to move back you know” the prices always go up line. they have a 2 mil ARM , so i think its more like
they wont be able to stay.