Everyone Is Lowering Their Prices
The Honolulu Advertiser reports from Hawaii. “The number of O’ahu single-family home and condominium sales peaked in 2005 at 12,607. Sales dropped 17 percent to 10,421 last year, and have continued to decline this year but at a slower pace. Inventory, which dropped to roughly 1,700 units in mid-2005, has been around 4,000 this year.”
“Agent Angie Pasion said one of the bigger recent challenges has been dealing with tighter lending standards instilled in the fallout of several Mainland lenders struggling with defaults on exotic mortgages.”
“‘It has a tremendous effect,’ she said. ‘I find that more challenging than selling. I have the product, but it’s the mortgage companies now providing the pressure.’”
“The shift hasn’t been pleasant for Kapolei homeowner Regina Akpinar, who would prefer that the market’s robust growth had continued. Akpinar and her husband bought their home during the frenzy in October 2005 after moving to Hawai’i from Florida.”
“‘We were extremely shocked about the market,’ she said, explaining that they often competed against multiple bids above prices asked by sellers. ‘We were basically chasing after homes. We were never fast enough.’”
“The couple put their home on the market in February after Akpinar’s husband, who’s in the military, received unexpected orders to relocate to the Mainland. The Akpinars received an offer fairly quickly, but will take a slight loss on the sale after factoring in money they invested to fix up their home.”
“‘I think we bought at the worst time, and are selling at a bad time,’ Akpinar said.”
“Sharon Naukana of ‘Ewa Beach bought her house at a great time, 2001 before prices started taking off. But now the single-parent is selling because she’d like to be closer to family members moving to the Mainland.”
“Since Naukana’s three-bedroom home went on the market in November, there have been no offers. ‘It’s frustrating because everyone is lowering their prices,’ she said, adding that she reduced her asking price by $7,000 to $448,000 but isn’t willing to go lower. ‘I will be patient. I don’t have to sell.’”
“Ben Severson, who’s become a real-estate investor, said he’s seen sellers price property relatively low to entice competing bids, a strategy that was rare at the top of the market. But many sellers, in his view, are still pricing property as though the boom isn’t over.”
“‘I think people are still living eight or 10 months ago and trying to gouge,’ he said.”
“Severson is in escrow to buy another Makaha house that was on the market 186 days and had its list price reduced to $239,000 from its tax-assessed value of $279,000.”
“Still, other buyers, like Dara Young, who bought a condominium this year, felt compelled to act fast despite the slowing market. Young started searching a year ago as prices were peaking but sales were falling. At the time, she vowed not to rush as a first-time buyer.”
“Even though the market had significantly cooled by January, Young saw a Kapi’olani condo she liked a lot, and rushed to put in an offer the same day. ‘I didn’t let anybody squeeze in there,’ she said.”
“Sales of existing homes on Kaua’i and the Big Island were lower last month, but the median price of condominium resales on the Garden Isle set a record.”
“Broker R. Scott Lindman said the median spike was likely the result of resales of recently developed luxury resort condos influencing a small number of transactions.”
“On the Big Island, the single-family home median sale price was $412,000 last month, down 6 percent from $439,900 a year earlier. There were 139 sales, down 26 percent from 187.”
“Big Island condos sold for a median $385,000 last month, down 29 percent from $540,000 a year earlier.”
er, don’t book the profits, Dano…
“…she vowed not to rush as a first-time buyer… Even though the market had significantly cooled by January, Young saw a Kapi’olani condo she liked a lot, and rushed to put in an offer the same day. ‘I didn’t let anybody squeeze in there,’ she said.”
Despite her self talk, the resolve just wasn’t there. Another one bites the dust.
People are so afraid things are just going to “take off” again. As Dr. Phil would say, “You gotta get real!”
I’ve had more than my fill of his type…
You mean sell-out?
I didn’t let anybody squeeze in there,’ she said.”
As if there was anyone who wanted to “squeeze in there.” It’s hard to resist purchasing after you’ve been shut out of the market due to competing bids. Unfortunately, you’re still going to be paying more than the property’s worth; but at least you get what you want. Me, I always temper my wants with my desire to not spend more than something is worth.
Mikey(2),
You have it all wrong. Your goal should be to satisfy all of your wants as quickly as possible and with no regard for others. I see you as a real threat to the American way of life!!
Sarcasm off.
It’s not that hard for me to resist. Punking down a half mil or more for a 50’s house in a okay neighborhood that “needs TLC” (and lots of it) just isn’t that appealing.
I’m with you on that. I am sick of seeing $499k charmers with potential given enough TLC. For that price, I want top notch. Better yet, I’m NEVER paying that much for a house.
Then: ‘We were basically chasing after homes. We were never fast enough.’
Now: ‘It’s frustrating because everyone is lowering their prices,’
Maybe sellers are finally discovering how to sell in a falling market? A couple of years back, buyers had to outrace each other to find a home to buy. And now sellers have to underprice each other to attract a willing buyer. What goes around, comes around.
I see the white collar crook abby joseph cohen is out raising her estimates for market year end. I think s&p estimates are now at 1600 and dow around 14k.Isn’t funny how all the shiesters come out of the woodwork when the market is riseing? Bunch of crooks in suits.
I think Abby and DL should get a room. Then again, I don’t even think DL would touch that!!
1. She uses a model that is driven by earnings. If she (and her cohorts at GS) believe earnings are going to rise, then the intellectually honest thing to do is project a rising S&P.
2. I saw her speak in January, and she’s been essentially right to date.
You might not agree with her market view, but I’ve found her to be a pretty straight shooter and more right than wrong.
I’ve found her to be more right when the markets were steadily rising and more wrong when they were crashing.
Look at some of her predictions back in 2000 or so. She was the quintessential perma-bull, as I recall, pumping right up to the crash.
Abbey Joseph Cohen a straight shooter?!!! Her & Henry Blodgett are the poster children of the Bubble.com “analysts” that led New Economy fantasists and bagholders-to-be down the primrose path to a well-deserved slaughter. I can’t believe anyone would give her any credibility at all in 2007.
During the crash it seemed like, every time she opened her mouth on CNBC, the market would crash some more the next day.
The weed dealers can’t qualify anymore and now that the decider has clamped down on the ability to throw down big wads of cash or even take it for a ride on a commersial airline flight I bet the whole Big Island economy is effected.
Big Island is a train wreck. Half the island is for sale.
love to here that…those smug @ss-hats deserve another earthquake and more volcano action to get the real estate moving in the right direction.
lolol
Comedians like you keep me coming back to Ben’s blog.
MAHALO
WTF? That earthquake was one of the scariest I have experienced (even as native Californian.) I wouldn’t wish the experience on my worst enemy.
FTR, big islanders are not generally a smug bunch. We were mostly there to escape the hustle and bustle, knowing that the trade off was a higher cost of living. True, home prices went off the chart, but you do know where the money came from, don’t you? We didn’t ask for our homes to appreciate. In fact, most of us would have been happier to keep things as they were. I gladly sold my house to a smug Californian, though.
I love this blog, but sometimes, I think the venom is beyond what’s deserved.
Aloha
Listem to me now cuz, spent years tryin crak one HUI on Big Island…..no can.
Unfortunately, that effort failed….So I have a special place in my heart for the failure of that island in particular. It is one of the most beautiful places on earth full of the most vile and corrupt individuals on same.
shoots bra.
i love the last word
In that case, the voz, they really will be making more land.
TrainWreck? 320 an oz.
Some of these dopers are actually pretty good business people.They seem to always find a way to float under the radar.They hate real jobs and despise the government for sure.
Actually I think wacky tobaccy has a bad rap. Look at all the drunks floating around raising hell and killing people.Legalize it and maybe we won’t have so many people on prozac.
Legalize it…
Then tax the crap out of it!
Let the burn outs pay for my retirement
no can do pops, too many “Boys in Blue” supported by war on drugs…
As Carl Sagan would say …”billions and billions”….of dollars just wasted o
in our great war on drugs. All the drug ‘war’ did was create a huge mafioso of cocaine and heroin and dope smugglers, put hudreds of thousands, if not millions of people in prison, make crack dealers rich, destroy neighborhoods and on and on. Just like prohibition, the drug war made crime pay. Too bad there isn’t a rational look at what happened. It couldn’t be any worse, and would probably be a lot better, if we had just legalized the stuff and taxed it. People get drugs whether they are legal or not; all the drug war has done is employ lots of cops and destroy lots of lives. I know drugs destroy lives too, but that’s gong to happen anyway. Do our wonderful leaders (and I can think of one who, if he didn’t have a rich Daddy, would probably have ended up in jail but got the extra chances most people don’t get) ever think through the consequences of our actions? Sorry, rhetorical question.
Carl Sagan was a self avowed pot head ya know.
Living with or around druggies blows chunks. Isolate them.
“and tax the hell out of it”
Amen! Seriously, all the stoners I know couldn’t be bothered to get up off the couch, let alone commit any violent crimes. It’s the tweekers that scare the hell out of me.
Palmetto
I agree, they just opened a Starbucks near me and the caffeine addicts are taking all the parking, and Yes ..they will serve a double espresso to a 15 year old….. Pushers need to get the next generation of addicts started. They learned well from Big Tobacco.
I doubt you could ever tax the hell out of pot and make it expensive. It is just too easy to grow yourself.
Those of you that like to call pot smokers “druggies, potheads, or burnouts” would probably be really shocked, shocked I tell you, to know how many of your family, friends, colleagues, and other respected acquaintances smoke a little. There are a lot of hypocrites that like to insult pot smokers while they think nothing of going out for a few drinks( and usually driving home ). Pot doesn’t ruin lives with anywhere near the frequency that alcohol does.
“Those of you that like to call pot smokers “druggies, potheads, or burnouts” would probably be really shocked, shocked I tell you, to know how many of your family, friends, colleagues, and other respected acquaintances smoke a little.”
An old friend of mine lived in a beautiful old neighborhood next to a lawyer and across the street from a judge. The lawyer threw a party for the movers and shakers, the judge included. We watched in amazement later that evening as they passed a joint around, oblivious to the fact that we could see exactly what they were doing. The judge was partaking in the very thing he was imprisoning people for.
Also, back in college, I took an evening cooking course with a friend for fun. The teacher told us it was perfectly acceptable to bring beer and wine to drink with our dinners we would cook. One of the more prominent justices in town, along with his wife, were more than happy to indulge. In fact, he was SMASHED a few nights (obviously primed well before the 7:00 start time). We watched him stagger, then slide right behind the wheel of his Mercedes. Not cool.
Wow, I hate real jobs and despise the government (at least the IRS part of it). Maybe that’s my new career path!
Join the ever growing shadow economy. Cash only bizsnatch. No taxes. We $alaryMen and Women are the ones who will pay for this housing mess.
Sad, and true
It’s one thing to smoke pot in high school or college. It’s just downright pathetic to still be toking as an adult. How many druggies give any thought at all to the corruption and violence they’re feeding in places like Mexico and Colombia, because they have to have get high?
sammy,
locally grown medicine is one of lifes salvations.
If someone wants to cultivate it in their backyard, especially if they have a medical condition (i.e. are going through chemo), all power to them. I have a hard time having any respect for anybody older than 25 who is still doing pot or other drugs, personally, not to mention their moral responsibility for perpetuating the drug trade.
Sammy, live your own life. There is only a “drug trade” because of illegality of drugs. I’d be happy to live in a society where the govt gave heroin freely to anyone that asked. Put them aside someplace where they can’t hurt anyone and let their genes rot. It would be less expensive than the prison society we have created and less harmful to everyone. I personally am tired of paying taxes to a “drug war” that accomplishes nothing. And I pay a LOT of taxes. Drugs should be only a medical/psychological problem, not a legal one.
How many car drivers give any thought at all to the corruption and violence they’re feeding in places like the Middle East and Angola, because they have to have get donuts from the store three blocks away and don’t want to haul their lazy a$$ that far?
Oh jeezus.
Note- that last post was just an ironic commentary on Sammy’s earlier one. I, for one, ALWAYS drive to get my donuts.
“Agent Angie Pasion said one of the bigger recent challenges has been dealing with tighter lending standards instilled in the fallout of several Mainland lenders struggling with defaults on exotic mortgages.”
“‘It has a tremendous effect,’ she said. ‘I find that more challenging than selling. I have the product, but it’s the mortgage companies now providing the pressure.’”
- Sorry Agent Angie, the real pressure comes from having unqualified buyers. They never were and are still not qualified to make full P&I payments.
“Our houses are such unwieldy property that we are often imprisoned rather than housed in them.”
Henry David Thoreau
‘It’s frustrating because everyone is lowering their prices,’ she said, adding that she reduced her asking price by $7,000 to $448,000 but isn’t willing to go lower. ‘I will be patient. I don’t have to sell.’”
I’m dropping the price by a whopping 1.5% and that’s as low as I’ll go!
Classic ‘chasing the market down’ behavior.
“I will be patient. I don’t have to sell.”
What a coincidence! I don’t have to buy!
LOL
7000 price drop, BFD!!!!!After 100% rise they b@tch about a measley 7 grand, greedy fools.People act like they are entitled to their house values riseing all the time.It is actually kind of funny how ignorant some people are.
There are countless sellers doing the exact same thing she is. Part of the problem is that large price declines have not made it into the public consciousness. Once they do, the number of these types of people will be thinned quite quickly as they race to get out.
“I will be patient. I don’t have to sell.”
Realtors will simply stop listing your house with that attitude, welcome to
FSBO honey.
…but she’s frustrated anyway?
Wonder how much equity she has?
Wonder how much the HELOC is that she needs to pay off?
BayQT~
The article states she bought before the boom in 2001, so she’s most likely sitting on a ton of equity
I would thoroughly enjoy watching a couple hundred thousand of this greedhead’s equity vanish, while she stubbornly refuses to lower the price beyond her chintzy 1.5% cut.
“…she reduced her asking price by $7,000 to $448,000 but isn’t willing to go lower.”
She is vacillating between anger and denial.
Big Island condos sold for a median $385,000 last month, down 29 percent from $540,000 a year earlier.”
Does she really think her measley 1.5% drop matters when compared to this statistic?
“Big Island condos sold for a median $385,000 last month, down 29 percent from $540,000 a year earlier.”
Does she really think her measley 1.5% drop matters when compared to this statistic?
sorry
Good thinking. We wouldn’t want you to give it away.
You just keep paying that mortgage while your asset value keeps dropping. And don’t forget those property taxes, HOA and maintenance. Just keep burning that cash.
Sorry toots, I don’t pay retail.
2BR 1926 house in 92627 now has FOR RENT sign gone (wanted $2050 @ month), and relisted on ZIP as New on Market. down from $999k a few weeks ago, now asking $839… I get bored and go on ziprealty at work. Same houses on there for months and new ones sprouting like spring flowers every day… lovely.
Like 3 people bought in my office in last 2 years. I tried to `splain them, but they pity me for being fool who “throws money away on rent,” so… Sadly, 2 of them are hot single women who I will definitely refrain from becoming involved with so as to avoid RE alligator entanglement. Pity.
this is fun, and i don’t even need popcorn.
$839K for a place that rents for $2K a month?
Hmmm… $2K a month to rent or $8K a month to buy…. Decisions, decisions, decisions……
Oh tough choice…. Wish I could make up my mind!!!
Sh@t, if your only going to live in it for 2 or 3 years like most people do these days, save yourself 6k a month and rent it.
What is surprising about these articles is how resilient the Hawaiian market is. People selling homes purchased in 2005 for only a “slight” loss. Median prices down by only 6%.
This is what astounds me about the deflating bubble around the country so far: just how long it takes for there to be a real impact.
Oahu is special. The banks are not.
Different market, same lenders.
just take a drive down hotel street on friday night, ever been to the tenderloin district in SF? Oh yeah, its special too.
6% +3% inflation = 9% real decline in one year. Multiply by ?? years…
How many billions of dollars less in RE transactions, has there been from the peak?
Those prices for the Big Islnad are absolutely ludicrous. Its why I left over a year ago…..400k for a 50 year old termite ridden sh@tbox on a 120000 sqr ft lot……notta chance.
As far as the Oahu information…..neva, eve go EWA…..Makaha, Kapolei thats deep into kutcha ghundi country… Hoale like beef?
What, nobody speak pidgeon?
isn’t one attribute of the correction increasing volume at decreasing prices ?
not close to the bottom yet
‘It’s frustrating because everyone is lowering their prices,’ she said, adding that she reduced her asking price by $7,000 to $448,000 but isn’t willing to go lower. ‘I will be patient. I don’t have to sell.’
You know…if I were standing on the tracks and saw a train coming (everyone is lowering thier price), I think I’d jump aside (cut my price more than everyone and just get out) instead of staying on the track but walking away from the coming train….. How long before it catches you?
She’ll find out the hard way. And then she will wish she’d joined her family when they were moving to the Mainland.
BayQT~
Oh, she’ll get her price in nominal dollars, assuming she lives long enough.
Ben called it….she’s chasing the market down, just not down enough.
I graduated from Leilehua H.S. in Wahiawa, HI in 1965 (former military brat), and left Hawaii in ‘66. Haven’t been back since. Are they still selling land by the square foot?
My cybername should be Doug in Boone, NC, and not Doug in Boone, NV
No.. You rent it by the foot.
I was in the Navy, in Hawaii back in ‘93. 100th aniversary of the overthrow. A lot of the land there was on 99 years lease and such. Well, when the leases were coming up for renewal, people were finding that there $300K house that was on lease-hold land that was renting for $200 a month, was having the lease-hold rent bumped up to $2000 a month.
So, the state passed a law forcing manditory lease-hold conversion. Meaning, if you wanted to buy the land under your house, the lease-hold entity had to sell… at market rate. So… People were being given prices of $200K+.
Yeah, peope living 3 families in a house to pay on my $3K a month on the mortgage on 1993 salaries, then they’re going to come up with an extra $2K a month to pay on the land….
To top it off, this was right after Huricane Iniki came through and wiped out Kauai. Insurance prices were skyrocketing… if you could get it. The fed changed Hawaii’s risk level, and companies are limited to what % of properties they could have at each level. So, by federal law, companies had to drop insuring properties in some of these areas.
So, to coerce the companies into dropping policies in other states and keep writing in Hawaii, the state passed a law that if you weren’t writing home onwers’ policies, you couldn’t cut new auto insurance policies. As a result, not only was it impossible to get homeowners insurance, it became very tough to get auto insurance.
Unintended consequences.
In 2005 my family & I stayed with a friend in Hawaii. She was Anglo, but most of the block were native Hawaiian Islanders. The typical household had three very noisy generations under one roof, complete with several incessantly barking dogs. The schools were horrible and anti-Mainlander (white) sentiment and harrassment were pervasive. It was a nice place to visit, but I would have no desire to live there even if housing drops by 50% or more.
I know! We are in the military (well, were, retiring in 59 days-woo hoo!) and most orders are 2-3 years. Why would any military person buy, in this market especially (South Florida), when you know you’re not going to be in the area long enough to make any money? I guess they figure they’ll “rent it out.” Yeah, good luck with that. Right now, I know of four different officers with houses for sale right now and they’re all sweating bullets.
Just what our national security needs. Officers sweating bullets due to the housing market.
Financial irresponsibility is grounds for revoking someone’s security clearance.
This is veering OT, but there is an issue here that will develop over the next couple of years: I will bet that a noticeable of officers and enlisted in the military have bought houses with toxic loans and will be in deep kimchee because of it. Unlike in the civilian world, I believe that military personnel who declare BK face pretty grave consequences — at least the officers would — including but not limited to potential loss of their security clearances.
This must be happening in the development I live in near DC. Many, many military people in the development. Funny thing, to me it seems like they keep flipping (and screwing) their own.
as big brother subsidizes housing in adn around base components, more fear should be felt in the locals as they are continually priced out of certain markets.
This may be another big issue for the Ewa area (military transfers). I’ve seen them buy up 600k new houses in Ocean Pointe and Haleakea like nothing. I don’t know how they will be able to sell them quickly should they need to transfer.
At this pace we’ll need 2 more years before the prices even start to look reasonable. And even then, they will not be cheap.
Hope I’m wrong.
Not to worry, joe. There will be plenty of inventory getting dumped by lenders who foreclosed and by desperate builders. Many of the individual sellers are delusional, but in the end, the market drop will be determined by the mass movements of the lenders and builders.
What kind of employment base exists in Hawaii to support a base “median” price of $412k? That is a 3500/month (loan, prop tax, utilites, maintainance etc…). At 30% of income (just a rough guess) you need to have an average income of over $120k per year.
Do people in Hawaii make an average of over $10k a month?
If you’re Laird Hamilton . . .
the surf lifestyle, never leave home without it.
**this phrase is trademarked not to be used………..gimme a break
“Do people in Hawaii make an average of over $10k a month? ”
Do people in Phoenix make $80K a year? Or Orange County CA, $200K a year?
Of course not. We got the bubble because lenders detatched people’s ability to pay from the price. This is also why we’re seeing mass foreclosures, and why the banks are taking huge losses on those foreclosures.
“This is also why we’re seeing mass foreclosures, and why the banks are taking huge losses on those foreclosures.”
They’re really going to take a bath on the $300k trailers in rural western WA.
I visited in 2005, there was an article in the local paper about the people who do the hard work for the HI tourism industry having to spend a huge fraction of wages on housing costs. Everything over there seemed expensive. Their electric rates are like 30cents+/kwhr
Wages absolutely do not support the prices. We have TONS of working homeless on Oahu (condo conversions.)
Hawaii is like Florida, but lagging by about a year. People see the situation on the mainland, but think, “we are special. It can’t happen here. Land of the wealthy, boomers retiring, blah blah blah.”
2BR 900 sq. ft. cinderblock shack on my corner was listed for $800K and just closed. I was amazed it sold. I would like to hear why the new folks paid so much. They moved in last week, but I’m afraid I’d lose control of myself and call them morons if I ever spoke with them.
Tax assesments in my ‘hood were higher than last year, so we got a fresh crop of refinancings to delay the inevitable. People here are oblivious and stupid. But the banks will not keep loaning them money. The same mortgage mills operate here, and will soon cease to operate here.
AAargh - I cannot believe condos in Arlington VA are going for the same price or more than condos in Hawaii. Where is the sanity? Arlington vs Hawaii….????? I know which one I’d choose.
but but but…you can’t lose on real-estate.
first time for everything:
http://biz.yahoo.com/cnnm/070508/050807_home_prices_to_dip.html?.v=5
http://tinyurl.com/23eqkr
I like the comments section. You can rent a 700K+ condo for under 2500 a month. What a deal? Not really, because lots of them for rent.
You know, quite frankly this whole housing market is comical when you’re not mad at it. You have yuppies buying 500K McMansions and Hummers yet they eat Ramen noodles and sleep on a stack of sheets, you have a bunch of Mexicans buying a house and living 12 to a 3br2bath, you have braindead Gen Y buying houses because they are so ’smart and sophisticated’, and then you have the gal feeding herself squirrels or something because she bought a house, etc. And of course, you have the talking heads on the TV goading everyone on even though it’s obvious that S will HTF, but wait, the housing bubble is the Fed’s fault! Well, actually, it’s fat stupid America’s fault. People wanted something for nothing, they got taken in by the biggest financial scam in US history, and now, we get a comedy show!
HAHAHAHHAAAAA!!!!! :)~
Gear up for grub with a tripleheader of pigskin, including a meeting of brothers in Dallas. Everybody knows it’s been a rough year for her, but find out who else had issues