Prices Falling from ‘Profound Peak’ In Hawaii
The Honolulu Advertiser reports on Hawaii’s housing bubble. “In January, the median list price of a single-family home was $699,000, according to the Honolulu Board of Realtors. Last year, the high point for single-family list prices came in October, when the median list price was $698,000.”
“While sellers continue to list at high prices, the homes aren’t moving as fast as they used to and the inventory is growing. January saw 738 new single-family listings,. The number of new single-family listings in one month topped 700 in August for the first time since the Board of Realtors began keeping records in 1986.”
“‘The inventory has risen considerably,’ said Bryn Kaufman, a real estate agent in Kailua. ‘The fact that some sellers are starting to reduce prices and accept lower offers is helpful. It started to happen right near the end of last year and it’s working its way into this year. A lot of people priced into the upswing in the market and now they’re overpriced.’”
“Out of 1,627 single-family homes for sale, 533 have seen price drops, Kaufman said. For homes that have been on the market six months or more, the average price was $2.5 million, Kaufman found.”
“Alicia and Jon Sturnick of ‘Ewa Beach dropped the asking price on their Ocean Pointe house by $15,000 and are starting to get the uneasy feeling that they missed the peak of O’ahu’s latest housing boom. ‘If we had put it on the market earlier, we would have definitely sold it already,’ Alicia Sturnick said. ‘I knew the market would slow down but I didn’t know it would happen so soon.’”
“The Sturnicks, like many others interviewed, have dropped their price and continue to hope for any kind of offer. But in their Ocean Pointe neighborhood, they have found that 52 other homes are also for sale. Several other single-family homes are brand new and priced in the same range. ‘I think I missed a very profound peak,’ Jon Sturnick said. ‘I’m a little bit disappointed. But I know our house will sell and the price will go up.’”
“Raul and Nancy Dollente originally listed their Kapolei house at $581,000, ‘then we dropped it to $579,000, then $565,000,’ he said. ‘Now we’re going $555,000.’ I’m not really sure how long we’ve had it for sale,’ Raul Dollente said. ‘Since October? It’s been so long already.’ The assessed value is $581,000. ‘Somehow it will be sold,’ Raul Dollente said. ‘I just don’t know when.’”
“Kari Waldhaus and her husband, Jack, bought their three-bedroom, two-bathroom house on Kakoo Place in upper Makakilo in 2004 as a rental home. After renting the house for a year and cleaning out the smell of the renters’ Great Dane and bulldog, the Waldhauses put their house on the market in October for $549,000.”
“They had one offer below their asking price that fell through. After that ‘nothing happened,’ Kari Waldhaus said. ‘Then in November we dropped the price to $515,000 and offered a credit back for closing costs. Thirty days later we dropped it to $499,000. We were thinking that getting it under $500,000 would make it sell. We were wrong. Now the house has sat vacant for five months. That house has a negative cash flow. Not fun.’”
“The house and property are assessed at $506,400. Kari asked whether she and her husband should invest more money in improvements, but her agent said that would only drive up the sale price or their costs, which they might not recoup. So the Waldhauses are left with an empty home and the nagging suspicion they missed O’ahu’s real estate peak.”
“‘We should have gotten in in July or August when things were flying off the market,’ Kari Waldhaus said. ‘I read and pay attention to the market and everybody thought it would be a gradual thing. But it’s like somebody flipped a light switch and people stopped buying.’”
look like they read comments from realtors….
Amen! I live on the Big Island of Hawaii, in Kailua-Kona, and the change was very sudden. Last year, homes sold quickly and prices were shooting up. Then at the end of the year, For Sale signs began springing up like weeds after a rainstorm. And the signs stayed up, too. And prices began going down.
On our street there are three homes that went on the market. Two of them are still for sale, even though they’ve cut their prices $10,000-$20,000. The one that finally sold was originally priced at $735k, and after three price cuts to $629k finally got an offer. This area attracts many retirees and second-home buyers, who are buying with mainland money. The locals are shut out because the economy here, based mostly on tourism and low-paying service jobs, can’t support these prices.
Thanks to the readers who sent this in.
‘I read and pay attention to the market and everybody thought it would be a gradual thing. But it’s like somebody flipped a light switch and people stopped buying.’”
I guess they didn’t get the “Get Out!” email from Greenspan. I’m sure he sent one out to everyone with an ARM…
Unfortunately he also sent one to all the people WITHOUT an ARM.
Whoops.
can’t fool me those volcanos are making lots of land!
this is significant since Japs are on the upswing and traditionaly big part of HI’s market
Tough shit, folks. This is the price you pay for being greedy.
One by one, all the bubble markets are starting to roll over.
Why the hell is the OC staying afloat?? Its killing me!
Friends in SillyCon valley tell me that for their price range (they didn’t specify), houses are still selling like hotcakes…and here on the central coast, we saw a big slowdown in prices, but not a decline. However, some areas in LA have had a bit of a drop. If this does play out (the bubble), I wouldn’t expect prices to fall overnight…but we’ll see.
i live in san luis obispo and have noticed a huge increase in inventory,but the prices are still sky high.the increase in inventory is our first sign,the next will be the hopeful satagnation of theses properties…hopefully the speculators from la and san fran are out of the picture,but these equity rich retiress seem to be supporting the high real estate prices,in a small town such as this,it only tales a handful of retirees to support these high real estate prices.
I consider places like SLO “downstream” markets which attract folks—rich retirees for eg.—from more expensive Calif markets. As long as pricing holds together “upstream”, then pricing can stay stable downstream.
This is true of other markets like Hawaii and resort-y parts of AZ, UT and NV.
But when LA/OC/SD and the Bay Area turn down, the effects will be felt in Lake Tahoe, Hawaii, Scottsdale and SLO.
ah, finally a place reporting downward pricing pressure that really *will* run out of land! (an uncle of a friend of mine is a vulcanologist there who studies the undersea volcano there which will indeed add new RE to Hawaii, but preconstruction isn’t for sale yet since it’ll be thousands of years til surveying…)
can’t be somehow that prices got so out of line with rents that people stopped wanting to live on pineapple to afford them? that people stopped believing that prices could *really* go up forever because they looked down the pyramidscheme and didn’t see many more people to jump on? Dole shutting up shop and moving to Malaysia give them pause?
Love this quote:
“I think I missed a very profound peak,” Jon Sturnick said. “I’m a little bit disappointed. But I know our house will sell and the price will go up.”
Basically, translated, they’re saying:
“The market is going to hell … listings are surging … sales are dropping. But none of that matters. Real estate always goes up.”
I truly don’t understand if people like this are just stupid, naive, fooled by their agent’s claptrap, or what. You don’t have to be an economics expert to know that higher supply + falling demand = lower prices.
1989 to 1996 to break even= a long wait
anyone know any blogs comparing the 80s bubble to this one ?
In some select areas (SoCal), prices didn’t recover until 1999-2001. So it was up to a 12 year wait for a few.
I was in the residential appraisal biz in New England during the the ‘89/90 bust. It was primarily developers and income property purchasers who took the hits back then. Saw allot of what I considered pretty smart men go down in flames. This time around it’s gonna be the millions of novice investors/100% financing ARM idiots who’ve been clipped by the mortgage racketeers. The situation today is infinitely worse than what I saw in the previous collapse.
I started worrying about what I was seeing in Dallas in 1999. Can’t believe it’s gone on this long, can you?
Like my sister who sold in Aug 2005 for a mere $900,000 more than she paid 4 1/2 years earlier. She then rented oceanfront for 4 months with the interest from the proceeds. Today she rents in Boston, again for less than the interest generated. She’ll be buying after about 50% more in declines.
Well duh. It won’t be long before the MSM starts contacting Ben and some of the regular posters asking how we understood what no one else knew.
Ben for President!
President? Why not something important like Chair of the Fed Reserve Board of Governors or head of the SEC?
i like that adjective, btw, “profound”. It’s majestic really. Implies “deeply important”, “historic”, “rife with meaning”. It has this medical quality to it too, “profound hearing loss”, “profound metastisizing” , “profound deformity”. very heavy.
Boo hoo for Alice The Goon. My ass bleeds for you.
coulda been you. Timing the pop of the bubble is so seductive. Yet so risky. By the time you are sure you should sell, its too late.
But it’s not. Don’t be sanctimonious.
Don’t be sanctimonious, be self-righteous and angry!
PS; Lingus aren’t you always crying in your beer about how everybody from out of state (tourists) has ruined Vermont. Maybe when the locals ask the tourists to tread lightly and respect the locals, the tourists can roll up their SUV windows and laugh and say “My ass bleeds for you,… goons” Come to think of it Hawaii is a tourist destination and here you are mocking the locals.
Do you in fact know they are locals? Do locals usually have anglicanized names like Sturnick?
Wake up.
Hey Lingus,
MANY local islanders are haole (that means “white”)…not all locals are of Polynesian descent! Many have lived there for generations.
Jeez.
My brother happens to be a resident since the 70’s. I’ll be sure to ask him about it.
Lingus you have to get out more, one of my friends in collage was from Hawaii, he was third generation Hawaiian and his last name was of extraction Irish. Do all the true native Vermonters have Native American surnames?
True but us native Vermonsters don’t control the land by leases as the indigenous Hawaiians do.
This is an interesting story given the ‘vacation’ quality of Hawaii real estate. The ‘like a light switch’ comment may be much repeated. Of course, Alice made no mention of their purchase price - if they’re expecting a 100% gain (which is their God given right) they got a ways to drop.
Read about Lies, Damn Lies and Poverty Statistics.
“In the meantime, everyday Americans are spending more than they make. For the second straight year, personal savings have been in the red, a phenomenon that has only happened once before, at the height of the Great Depression. Research conducted by the Economic Policy Institute shows that the indebtedness of U.S. households has risen nearly 36 percent over the last four years. As a result, the gulf between the “haves” and “have nots” is reaching crisis proportions.”
Melody, you should come over to Ben’s Money and Metals for focus on finance/economy.
“But the economy is doing wonderfully”.
“Consumer debt is good for the economy”.
“Tax cuts are a good thing”.
Just ask any flag wearing republiKKKan.
>Just ask any flag wearing republiKKKan.
Do you mean like West Virginia Democratic Senator Robert Byrd?
http://en.wikipedia.org/wiki/Robert_Byrd
Sorry, I couldn’t resist…people are so wed to their respective parties, it’s just ridiculous…
Actually I meant Trent Lott.
http://en.wikipedia.org/wiki/Trent_Lott
or was it Strom Thurmond?
http://en.wikipedia.org/wiki/Strom_Thurmond
There are others. Want to see?
Actually I was referring to these two used car salesmen but you get the idea don’t you?
http://en.wikipedia.org/wiki/Strom_Thurmond
Lest we forgot senior slimeball advisor to Shrub:
http://en.wikipedia.org/wiki/Trent_Lott
…Actually I was referring to these two used car salesmen but you get the idea don’t you?
http://en.wikipedia.org/wiki/Strom_Thurmond
Lest we forgot senior slimeball advisor to Shrub:
http://en.wikipedia.org/wiki/Trent_Lott
I don’t get it…neither Trent Lott(R) nor Strom Thurmond(R) were members of the KKK (as far as I have read). Robert Byrd(D) was. What was your point? (This is getting way far off topic…)
Of course you don’t get it. Because you’re young enough to believe the spoon fed garbage on Fox news. Now go do some research.
The “republiKKKan” is really unnecessary - this is a blog about real estate, so lets keep it that way.
Nonetheless, I will say that even though Byrd was a member of the KKK, he now willingly and publically admits it was an error, and currently gets good if not perfect legistlative ratings from the NAACP. OTOH, Republicans generally do very poorly in these rankings. Its not by chance that the formerly Democratic “Solid South” is now very Republican.
Maybe he should have done more than reading what realtors and other ‘RE experts’ were saying…
Read about I think these are the homes
.
One more.
Read about The other one.
This seems to be a comment I’ve noticed more and more with sellers. It seem like most owners thought that even if a decline happened in sales activity or price that there would be ample time to unload, esspecially with the magical spring around the corner. The fact that the door slammed shut seemingly overnight seems to have taken them quite by surprise. It’s like one last guy got through and then SLAM!
That’s how musical chairs works- No music fade-out, just an abrupt stop. Then watch ‘em scramble!
Silence is golden .
yeah, fall 2005 I started overhearing people talking about how they were getting their homes ‘ready’ for selling in the spring. You know, fixing it up perty so the suckers would really make it worth their while. Garden, little paint. Even some of the bigticket items, like a new ‘mechanical’ or two, so that the “buyer’s agents” round here would say to their clients “oh, and its got a new furnace too!”. Gotta make your property attractive in this now-buyers market, especially if you want to get your price. But I’m thinking that last spring was the last time a 1200$ furnace got you 40K of extra price.
Buyer’s market? Not disagreeing with what you wrote, just that it’s funny to read all over the place that it is a “buyer’s market”…
In order to have a “market”, you have to have “buyers”.
So, really, technically…there’s NO market.
tax cuts are good
Hitler was a socialist
Rewriting history are we?
Who the hell wants to live in Hawaii anyways?
What a racist cesspool. Worse than Detroit, actually.
Racist and preachy religious. Mormons in Hawaii are really, really pushy. Especially the polynesian ones.
I once had a debate about that with a polynesian Mormon who had come to OC from Hawaii. She said there’s a movement afoot on the island to break away from America, and return to the ‘old ways’.
I asked her how she thought they’d fair without America’s military behind them. She said that’s what ‘white people always say.’
That got me a bit irritated, because my comment was founded on fact.
So I asked this polynesian Mormon what the ‘old ways’ were all about.
It sounded pretty Mormon.
So, I had to fire back.
“Okay, let me attempt to get my big fat white mainlander head around this…you want to kick out the white man so you can return to the ways that the white man came over and enforced upon you? Is that right? All the while, Japan is figuring out a way to bend you over- while China is sending nuclear subs to your shore, waiting for an ‘all clear, no longer owned by America! We’re FREEEEEE!!”
She never spoke to me again.
Such a dumb white mainlander, I am.
One more point…for Crispy&Cole…
Supply still building.
Few people buying.
Homes sit rotting.
Howeowners stubborn.
Patience.
The End of August, my friend.
The End of August.
Your post had nothing to do with the housing bubble, but since you made a lot of statements I wanted to respond.
1) The overthrow of the Hawaiian monarchy in 1893 by U.S. business interests and U.S. military forces was illegal. The U.S. Congress recognized that in 1993 and issued a formal apology. Look it up.
2) A tiny minority - no more than 1 or 2 percent of the state’s population - advocates independence for Hawaii. If it were put to a referendum, it would lose overwhelmingly. It ain’t gonna happen.
3) Hawaii is not a racist cesspool. There is racism here, just like anywhere, but Hawaii is the most multicultural state in the U.S. Half the people here are mixed-race. On the whole, the different ethnic groups get along here just fine.
4) Who the hell wants to live in Hawaii? I’d say a hell of a lot of people would, if they could afford to.
I feel abused, too.
Once, a long time ago, when my homo sapien family was living in a cave in France, these nasty homo erectus creatures came and illegally kicked us out of our cave. It was illegal, and still irritates me to this day. Dirty white homo erectus people!
If Hawaii ain’t racist, how come every white person that comes back here from living there says it is?
Maybe it’s just all crying over spilt milk.
Aw heck, maybe homo erectus wasn’t so bad after all.
Maybe we were just unprepared.