Oahu Real Estate Market Forecast
I gave a market update presentation to the Hawaii Association of Mortgage Brokers at their convention held at the Sheraton Waikiki, and in that presentation, I spoke of the “new normal” being a state of chaos. With the stock market going haywire after the S&P downgrade of the U.S. credit rating, and the unknown outcome of Congress’ next 100 days of cutting expenses, who can forecast what’s going to happen next? Consumers were gun shy about spending before this fiasco, now they are pissed off, maybe the only certainty is that your emotional limits are going to be tested? The one great thing that happened as a result of all this, is that interest rates hit rock bottom and is generating a renewed interest in re-financing. Now THAT may be a stimulus by itself as more money will be put back in your pocket if you are one of the fortunate ones who have a huge mortgage (like me) and who will benefit from the low 4% rates with very little points (there is even BELOW 4% rates) Check out my friend, Leonard Loventhal’s web site at www.HonHL.com for current rates.
So what happend in the real estate market in July? Well July showed us another mixed bag of signals with sales volume decreasing by -7.0% for single family (SF) and -8.3% for condos (CND), a trend that has been establishing for the past few months. Seems the sales rate is slowing across the country as reports from our national economist, Lawrence Yun, state that an unusual event is happening where pending sales are increasing but closed sales are dropping. A signal that possibly a lot of deals are falling out of escrow either due to buyer remorse or difficulty in getting a loan.
Oahu Real Estate Closed Sales July 2011
Median prices were down slightly with a – 2.2 % decrease in SF price to $591,000, and a moderate decrease of -7.7% for CND to $277,000. Oahu Real Estate Median Sales Price July 2011 . Inventory seems to be consistantly depleating each month since January with a decline of -12.5% for SF and a -10.8% drop for CND units respectively.
Oahu Real Estate Inventory of Homes July 2011 . Days on market is 34 days for SF (-10.5%), and 37 days for CND (+1.4%). Oahu Real Estate Days on Market July 2011
As I’ve been noting in previous months, an interesting statistic to watch is the surge in pending sales. Up 11.9% for SF this month and up 17.8% for CND. It will be interesting to see if those pending sales actually close which would boost our August and September numbers.
Our forecast is that the market will continue to deplete the supply of inventory and although we don’t see a feeding frenzy as in a “seller’s market”, all the ingredients are there for one to take place. We are still experiencing multiple offers for well priced properties, but buyers are tentative in chasing the market upward. With Oahu unemployment still low and getting even lower, and demand remains strong.
As I said at the outset, “the new normal is a state of chaos” so expect that things will continue to fluctuate as Congress gets back to work on cutting expenses and the results of those cuts will play out in the marketplace! One thing is certain, REALTORS will be vigilant in voicing our concern over any cuts in the home mortgage interest deduction, the lower of loan limits which would especially affect Hawaii, and the extension of the Flood Insurance program which is set to expire on September 30, 2011. All of these areas, if cut or adjusted, will greatly affect the Hawaii real estate market. In volatile times like this, it is imperative to really know what you are doing. More so than ever, using professionals to advise you becomes extremely important. If you are going to buy or sell, please feel free to give us a call. If you need to drill down to individual markets to see what’s going on. Click here to get individual reports by neighborhood to see specific areas and the changes within that market. As always….the tag line of, “all real estate is local” is important to remember. Statistics provided by the Honolulu Board of REALTORS. PProfiles.com offers valuable information on Property management Oahu and Oahu Real Estate They provide excellent property management services. Visit here http://www.pprofiles.com/
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